M

ATERIALS
ANAGEMENT
ANNUAL
August 2024

NMDC Limited
(A Govt. of India Enterprise)
Khanij Bhavan, 10-3-311/A, Castle Hills,
Masab Tank, Hyderabad - 500 028
 Materials Management Manual, 2024

INDEX

Chapter Description Page No

1 Organization, Objectives and Functions 9

2 GoI Purchase Preference Policies 15

3 Materials Control 30

4 Purchase Requisition and Specifications 37

5 Modes of Procurement 49

6 Tender Enquiry Terms and Conditions 77

Tender Process, Bid Evaluation and Placement of

7 Order 133

8 Medicine Procurement 156

9 Vendor Development and Management 162

10 Stores Management 172

11 Obsolete Declaration and Disposal 189

12 Annexures & Appendices 196

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INDEX TO SECTIONS

1. ORGANIZATION, OBJECTIVES AND FUNCTIONS

S.NO CLAUSE DESCRIPTION PAGE NO

1 1.1 Organizational Structure of MM Dept. at Corporate 9
Office
2 1.2 Organizational Structure of MM Dept. at Projects / 9
Units
3 1.3 Objectives of MM Department 9
4 1.4 Functions of MM Department 10
5 1.5 Code of Conduct 11
6 1.6 Integrity Pact 11
7 1.7 e-Procurement 12
8 1.8 Central Public Procurement (CPP) Portal 12
9 1.9 GeM – Government e - Marketplace 12
10 1.10 TReDS Portal 13
11 1.11 Review of MM Manual & Issue of Amendments 13
12 1.12 About the Manual 14

2. GOI PURCHASE PREFERENCE POLICIES

S.NO CLAUSE DESCRIPTION PAGE NO

1 2.1 Reservation of specific items for procurement 15
from Micro and Small Enterprises (MSEs)
2 2.2 Public Procurement Policy for Micro and Small 16
Enterprises (MSEs), Order 2012
3 2.3 Public Procurement (Preference to Make In India- 19
MII), Order 2017
4 2.4 Reservation of Procurement of certain class of 28
Products from certain agencies - Khadi Goods/
Handloom textiles
5 2.5 Reservation of Procurement of certain class of 28
Products from certain agencies – Pharmaceuticals
from Pharmaceutical CPSU’s)

3. MATERIALS CONTROL

S.NO CLAUSE DESCRIPTION PAGE NO

1 3.1 Materials Classification 30
2 3.2 Inventory Analysis & Material Planning 31
3 3.3 Budgeting 36
4 3.4 Materials Codification 36

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4. PURCHASE REQUISITION AND SPECIFICATIONS
S.NO CLAUSE DESCRIPTION PAGE NO
1 4.1 Purchase Requisition (PR) 37
2 4.2 Purchase Requisition (PR) Estimate 39
3 4.3 Classification of PRs 42
4 4.4 Forwarding PRs from Projects to HO 44
5 4.5 Technical Specifications 45
6 4.6 Tender Sample 48

5. MODES OF PROCUREMENT
S.NO CLAUSE DESCRIPTION PAGE NO
1 5.1 Responsibilities of Purchase section 49
2 5.2 Modes of Procurement 50
3 5.3 Open Tender Enquiry (OTE) 51
4 5.4 Global Tender Enquiry (GTE) 52
5 5.5 Limited Tender Enquiry (LTE) 54
6 5.6 Single Tender Enquiry (STE) with PAC 55
7 5.7 Single Tender Enquiry (STE) without PAC 56
8 5.8 Purchase of Goods without Quotation 57
9 5.9 Purchase of Goods by Local Purchase Committee 58
10 5.10 Express Purchase Committee (EPC) 60
11 5.11 Emergency Purchase Policy 61
12 5.12 Repeat Order 62
13 5.13 Rate Contracts and Running Contracts (RC) 63
14 5.14 Explosives Rate/ Running Contracts 66
15 5.15 Transportation Rate/ Running Contract 69
16 5.16 Depot and COLD Agreement 70
17 5.17 Insurance Coverage 70
18 5.18 Expression Of Interest (EOI) 72
19 5.19 Procurement through Open Auctions 75
20 5.20 Government e-Marketplace (GeM) 76

6. TENDER ENQUIRY TERMS AND CONDITIONS

S.NO CLAUSE DESCRIPTION PAGE NO
1 6.1 Classification of Bidding System 77
2 6.2 Tender Cost 78
3 6.3 GoI Purchase Preference Policies 78
4 6.4 Earnest Money Deposit (EMD)/ Bid Security 78
5 6.5 Security Deposit (SD)/ Performance Security 80
6 6.6 Performance Bank Guarantee (PBG)/ Warranty BG 81
7 6.7 Authorized Banks & Other Guidelines for BGs 83
8 6.8 Performance Guarantee with Cost CAP for HEM 85
9 6.9 Performance Guarantee with MARC for HEM 89
10 6.10 Internal performance in PQC 96
11 6.11 Payment Terms 97
12 6.12 Delivery Terms 98

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13 6.13 Liquidated Damages (LD) 98
14 6.14 Denial Clause (DC) 99
15 6.15 Warranty Terms 100
16 6.16 Inspection 101
17 6.17 Bought Out Items 102
18 6.18 After Sales Services 102
19 6.19 Purchase Under Option Clause 102
20 6.20 Buy Back Offer 103
21 6.21 Limitation of Liability 104
22 6.22 Force Majeure Conditions 104
23 6.23 Settlement of Disputes 109
24 6.24 Integrity Pact (IP) 116
25 6.25 Land Border Sharing 120
26 6.26 Consortium 125
27 6.27 Cancellation of Purchase Order 127
28 6.28 Risk Purchase 127
29 6.29 Imports Management 129

7. TENDER PROCESS, BID EVALUATION AND PLACEMENT OF ORDER

S.NO CLAUSE DESCRIPTION PAGE NO
1 7.1 e-Procurement 133
2 7.2 Issue of Purchase Enquiries 133
3 7.3 Issue of Amendment / Modification to Tender 134
Enquiry
4 7.4 Tender Extension 134
5 7.5 Tender Opening Committee (TOC) 135
6 7.6 Scrutiny of Bids 136
7 7.7 Bid Evaluation 138
8 7.8 Comparative Statement (CST) 139
9 7.9 Exchange Rate Reference 140
10 7.10 Demonstration of products / services for technical 140
qualification
11 7.11 Appraisal of Techno-Commercial Bids 141
12 7.12 Tender Scrutiny Committee (TSC) 141
13 7.13 Consideration of Lack of Competition OTE/GTE/LTE 143
14 7.14 Cancellation of Procurement Process/Rejection 144
of All Bids/ Re-Tender
15 7.15 Consideration of Abnormally Low Bids (ALBs) 146
16 7.16 Cartel Formation/ Pool Rates 147
17 7.17 Negotiations for reduction of Prices 148
18 7.18 Reverse Auction (RA) 149
19 7.19 Resolving a tie of bids 151
20 7.20 Distribution of Order quantity among technical 151
acceptable bidders
21 7.21 Award of Purchase Order 152

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22 7.22 Signing of Letter of Acceptance / PO/ Amendment 153
23 7.23 Procurement Lead Time 153
24 7.24 Extension of Delivery 153
25 7.25 Pre-Dispatch Inspection (PDI) 154
26 7.26 Follow up of Orders & Monitoring of progress 155

8. MEDICINE PROCUREMENT

S.NO CLAUE DESCRIPTION PAGE NO

1 8.1 Planning and Purchase Requisition 156
2 8.2 Purchase Orders 158
3 8.3 Procedure for Receipt and Accounting of Medicines 159
4 8.4 Procedure to be followed at Hospital after 159
Receipt of Medicines
5 8.5 Release of Payment against Purchase Orders of 160
Annual PRs
6 8.6 Purchase of Medicines outside Annual PR 160
7 8.7 General Points 161

9. VENDOR DEVELOPMENT AND MANAGEMENT

S.NO CLAUSE DESCRIPTION PAGE NO

1 9.1 Selection and Registration of Vendors 162
2 9.2 Registration of Vendors for Safety Items 164
3 9.3 Categories of Registration 165
4 9.4 Period of Registration 166
5 9.5 Deregistration / Delisting of Vendors 166
6 9.6 Development Order / Trial Order for Registration 167
7 9.7 Vendor Performance Evaluation 168
8 9.8 Vendor Banning 170
9 9.9 Vendor Empanelment 170

10. STORES MANAGEMENT

S.NO CLAUSE DESCRIPTION PAGE NO

1 10.1 Central Stores 172
2 10.2 Receipt Section 172
3 10.3 Non Stock Items 176
4 10.4 Custody / Issue Cell 177
5 10.5 Storage and Preservation of Materials 178
6 10.6 Physical Verification of Stocks 182
7 10.7 Gate Passes 183
8 10.8 Claims 183
9 10.9 Security Arrangement of Stores 185
10 10.10 Fire Prevention of Stores 186
11 10.11 Collection of Scrap and Used Materials 187

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12 10.12 Return of Old Equipment to Stores 188
13 10.13 Calibration by Weights and Measures Department 188
14 10.14 HSD and Petrol receipt and storage 188
15 10.15 Miscellaneous Consignments 188

11. OBSOLETE DECLARATION AND DISPOSAL

S.NO CLAUSE DESCRIPTION PAGE NO

1 11.1 Obsolete Items 189

2 11.2 Guidelines for declaring of Equipment, Spares & 190
Stores as Obsolete
3 11.3 Obsolete Disposal 192

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ANNEXURES
ANNEXURE DESCRIPTION CLAUSE PAGE NO
1–I Distribution of Items for Procurement at
1.4 196
H.O, Projects / Units and Regional office
2–I Local Content Format w.r.t PPP–MII, 2017 2.3.11 198
Distribution Of Quantity w.r.t PPP-MSE &
2 – II 2.3.15 200
PPP-MII Combination
3–I Material Group Codes as per SAP (ERP)
3.4 208
System
4-I Proprietary Article Certificate (PAC) 4.1.2 215
4 – II Emergency Certificate 4.3.3 216
4 – III Forwarding of Indents from Projects to HO 4.4 217
5–I PC dept circular on Procurement of Spares,
Assemblies & Sub-Assemblies of HEMM/ 5.1.1 218
OCSL Plant
5 – II GeM Standard Operating Procedure (SOP) 5.20 222
6 – I (a), (b) Proforma for EMD, Security Deposit,
6.7.2 231
& (c) Performance Bank Guarantee
6 – II Format for After Sales Service 6.18 235
6 – III Integrity Pact Format 6.24.1 236
6 – IV Certificate of Conformance to Border Sharing 6.25.4 242
6-V INCO Terms 6.29.1 243
7–I Purchase Enquiry Proposal Format for
7.2 244
Approval of Competent Authority
7-II Tender Issue Register 7.2 245
7-III Demonstration of Offered Products / Services
7.10 246
for Technical Qualification
7-IV Constitution of TSC 7.12.1 248
7-V Purchase Proposal for Approval of Competent
7.12 252
Authority
7-VI Purchase Order/ AT Register 7.21 254
7-VII (a) Purchase Process Lead Time Charts Single
7.23 255
& (b) BID and Two-Bid System
9-I Standard PQC terms and conditions 9.1 (k) 257
10-I Stores Receipt Serial (SRS) Control Register 10.2 (b) 259
10-II Railway/ Lorry Receipt Register 10.2 (c) 260
10-III Convey Note Form for Outward Despatch
10.2 (e) 261
(Departmental)
10-IV Stock Surprise Checking Register 10.4.1 (i) 262

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10-V H.S.D / Petrol (MS) Tank Dip Register 10.4.1 (ii) 263
10-VI HSD / Petrol (MS) Annual Closing SOP 10.6.10 264
10-VII(a) Unserviceable / Scrap Material Return Voucher 10.11.4 267
10-VII(b) Numerical Ledger Register of Unserviceable /
10.11.4 268
Scrap Material
10- VIII Cannibalization of Equipment 10.12 269
11 - I Proforma for Obsolete Declaration 11.2 (h) 270

APPENDICES

APPENDIX DESCRIPTION PAGE NO

I Definition of the terms used 271

II Procurement Glossary 274

III FAQ’s on Public Procurement Policy for MSEs, Order 2012 280
FAQ’s on Public Procurement (Preference to Make In India),
IV 287
Order 2017
V Basic Aims of Procurement – The 5 R’s of Procurement 290

VI Fundamental Principles of Public Procurement 291

VII Standards (Canons) of Financial Property 294

VIII Refined Concept of Cost and Value – Value for Money 294

IX SAP T- Codes 295

X Abbrevations

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 Materials Management Manual, 2024

CHAPTER – 1

1 ORGANIZATION, OBJECTIVES AND FUNCTIONS

1.1 ORGANIZATIONAL STRUCTURE OF MM DEPARTMENT AT CORPORATE OFFICE

Organizational structure of Materials Management (MM) Department at

Corporate Office shall be headed by senior most officer of Materials
Department, who shall report to Functional Director and shall be assisted by
senior level officers covering Purchases (of HEM, Plant etc.) Materials
Control, Vendor Development, and allied functions.

1.2 ORGANIZATIONAL STRUCTURE OF MM DEPARTMENT AT PROJECTS / UNITS

a) Head of the Materials Management (MM) Department at Projects / Units

shall be Sr. level officer and directly reporting to the Head of Project/
Unit.

b) Department head shall be assisted by senior officers - covering

Purchase, Material control and Stores functions.

c) Store Keeping function will be performed at the Projects while the

Purchase function would be centralized at Head Office for equipment
and other high value selected items required by various projects and
imported items, while all other items will be purchased directly by
Purchase Sections located at the Projects. Projects will also purchase
items covered under RCs concluded by corporate office.

d) R&D and Investigation units shall have separate store set up. However,
Purchase Requisitions (PRs) beyond the Delegation of Powers (DoP) of
R&D, Investigation unit and imported items will be dealt at corporate
office. PRs other than above will be dealt by the Materials Department
Officers at R&D and Investigation units.

1.3 OBJECTIVES OF MATERIALS MANAGEMENT DEPARTMENT

a) To maintain continuity of operation by ensuring steady supply of

materials.

b) To reduce materials cost and there by contribute towards reduction of

cost of production as well as overall costs.

c) To ensure optimal inventory holding, reduce overstock of slow moving

and non-moving items, reduce the inventory carrying cost and ordering
cost.
d) To ensure purchases for the right quality, right quantity, right price, at
right time and place and from right source.

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e) To enhance the vendor base and maintain cordial relations with the
suppliers.

f) To evolve scientific management of procurement and inventory by

leveraging technologies and procedures for achieving the objectives.

g) To achieve maximum integration with other related departments and

resolve the areas of conflict by proper coordination.

h) To train and develop competent personnel in Materials Management

Department and motivate them to make their department as well as
the company succeed.

i) To ensure timely procurement for the production and the needs of the
User Departments.

j) To evolve a methodology of organizing the purchases to reach the User

timely.

k) To do the processing of procurements in a transparent manner, give

equal opportunity to the participant bidders and finalize procurements
against competitive bids.

1.4 FUNCTIONS OF MATERIALS MANAGEMENT DEPARTMENT

a) Compilation of Procurement Budget.

b) Processing of PRs, in consultation with user Departments concerned,

for optimum estimate of the quantities of materials to be purchased.

c) Monitoring of items to prevent loss due to obsolescence and

deterioration while in storage.

d) Procurement of materials of the required quality and quantity at the

commensurate price, at the appropriate time and from reliable sources
to meet the requirements.

e) Ensuring that the stocks of items are not exceeding optimum stock
level, consistent with the market conditions and the requirements of
the User departments.

f) Exploring the market potential for spares in respect of critical spares,

new materials, or materials with limited sources.

g) Maintain the list of established vendors for important and critical items.

h) Ensure proper custody and expeditious issue of stores against valid

requisitions from Users.

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i) Carry out inventory analysis and circulate results for follow up action by
all concerned.

j) Lead time study and fixation of stock levels for fast moving / general
stores under Material Requirement Planning (MRP) automatic
replenishment system (ARS).

k) Arrange survey of all stores returned by User Departments and

Organize disposal of obsolete, scrap, or unserviceable stores through
e-Auctions.

l) Develop indigenous sources for imported materials.

m) Organize training courses in Materials Management department.

n) The distribution of Purchase work between Head Office, Projects/Units

and Regional Office is shown at Annexure 1-I (P-196).

1.5 CODE OF CONDUCT

a) To consider first the total interest of NMDC in all transactions without

impairing the dignity, Integrity, and responsibility to one's office.
b) To buy without prejudice, seeking to obtain the maximum value from
every rupee of expenditure.
c) To subscribe and work for honesty, transparency, and truth in buying and
selling, to denounce all forms and manifestations of commercial bribery
and to eschew anti-social practices.
d) To accord a prompt and courteous reception to all who call up on
legitimate business mission.
e) To respect one's obligations and those of NMDC with good business
practices.

1.6 INTEGRITY PACT (IP)

In order to ensure full compliance with organizational Laws & regulations,

principles of economical use of resources, fairness & transparency with the
bidders, the Organization in co-ordination with the renowned international
Non-governmental Organization i.e. Transparency International (TI) shall
appoint Independent External Monitor (IEM) who will monitor the tender
process from the beginning till execution & completion of the Purchase
Orders for compliance with the principles/ terms mentioned herein.

The threshold value of the tenders covered under Integrity Pact for
procurements is Rs.1.00 Crore.

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1.7 e-PROCUREMENT
With reference to the DOE Manual of Procurement of Goods Aug-2024 Clause
No: 4.17.1 at Page No:113 i.e. Electronic Procurement (e-Procurement), It is
mandatory for Ministries/ Departments to receive all bids through e-
procurement portals that are GCQE compliant for all procurements.
This will enhance the transparency & fairness in the tendering & procurement
process. The e-procurement portal should be structured in such way that it
gives broader scope & wide publicity for inviting the bids.

1.8 CENTRAL PUBLIC PROCUREMENT (GeM-CPP) PORTAL

Central Public Procurement Portal (GeM-CPPP) (https://eprocure.gov.in/)

has been designed, developed, and hosted by the National Informatics
Centre (NIC, Ministry of Electronics & Information Technology) in association
with Dept. of Expenditure to ensure transparency in the public procurement
process. The primary objective of the Central Public Procurement portal is to
provide single point access to the information on procurements made across
various Ministries and Departments.
The CPPP has e-publishing and e-procurement modules. It is mandatory for
all Ministries / Departments of the Central Government, Central Public Sector
Enterprises (CPSEs) and Autonomous and Statutory Bodies to publish on the
CPPP all their tender enquiries and information about the resulting contracts.
CPPP provides access to information on documents relating to pre-
qualification, Bidders’ registration, Tender Documents, details of bidders,
their pre-qualification, registration, exclusions/ debarments, decisions taken
regarding pre-qualification and selection of successful bids. Implementing
end-to-end e-procurement for all procurements is also now mandatory either
through the CPPP portal or any other suitable GCQE compliant portal.

The details about Integrity Pact, e-procurement & CPP Portal are
explained at Chapters 4-6 of this manual.

1.9 GeM – GOVERNMENT e-MARKETPLACE

GeM (Government e-Marketplace) is the ‘National Public Procurement

Portal,’ serving as an end-to-end online marketplace for various entities. The
Procurement of Goods and Services available on GeM (as per Rule 149 of
GFR, 2017) is mandatory for Ministries/ Departments (including attached/
subordinate offices), CPSEs, autonomous bodies and local bodies. GeM
facilitates the Procurement of common-use goods and services by such
entities. The GeM portal aims to enhance efficiency, transparency, and
speed in public Procurement. Through this paperless, contactless, and
cashless platform, registered government buyers can seamlessly procure
goods and services from registered sellers. It is a significant step toward
modernising and streamlining the procurement process in India.
GeM SOP as per Annexure 5-II (P-222).

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1.10 TReDS PORTAL

As per GoI guidelines, MSEs payment has to be released through Trade

Receivables e- Discounting System (TReDS) portal to facilitate the financing
of trade receivables (invoices) to MSEs. Accordingly, NMDC has tied up with
M/s RXIL portal (A JV of NSE & SIDBI), M/s A TReDS Ltd portal
(Invoicemart–A JV of AXIS Bank & M Junction) and M1xchange TReDS.

All Procurement Enquiries should include the following clause in all

Tenders:

PAYMENT THROUGH TReDS PORTAL FOR MSEs:

“NMDC has registered with M/s RXIL, M/s A TReDS Ltd and M/s M1xchange
portals for releasing MSE vendor’s payment through TReDS portal.
All MSE vendors are requested to register on any one of the portal to release
payment through TReDS Portal.
In case any MSE vendor is not willing to process their payment through
TReDS portal, that vendor should confirm non willingness. In such case,
payment will be released as per NMDC standard payment terms”.

1.11 REVIEW OF MM MANUAL & ISSUE OF AMENDMENTS

a) NMDC HO shall form a Material Management (MM) Manual management

committee comprising of representatives from MM, Finance and
Production departments to conduct a holistic review of manual and
propose necessary amendments to the manual once in every 3 years.
The exercise should be completed within 6 months.

b) MM Department shall incorporate changes in the manual on account of

regulatory orders / notices etc. and submit the updated manual for
necessary approvals.

c) MM Department shall communicate approved changes in the manual and

circulate soft copy of the revised manual to all internal material
management stakeholders whenever the manual is revised.

d) ISSUE OF AMENDMENTS

If any Amendment related to procurement of Goods (or) Services either

by GoI or NMDC Ltd same shall be incorporated in the MM Manual from
time to time with due procedure and same should be posted in the NMDC
website www.nmdc.co.in & NMDC intranet https://nmdchyd.nmdc.co.in

All Office Orders/ Circulars related to MM Dept shall be posted on NMDC

Intranet under Materials Management section.

All MM Executives must check the NMDC Intranet on regular basis.

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1.12 ABOUT THE MANUAL

a) NMDC as a whole spends a sizeable amount on procurement of various

types of goods and associated services to discharge its main function of
producing Iron Ore. It is imperative that these purchases are made
following an efficient and cost-effective procedure in accordance with the
relevant rules and regulations of the Government of India.

b) The Indian Contract Act, 1872 and the Sale of Goods Act, 1930 are major
legislations governing contracts of sale/ purchase of goods in general.
Though, there is no law exclusively governing public procurement of
goods, General Financial Rules (GFR) 2017, various Government orders
and guidelines provide the regulatory framework for public procurement.

c) In this Manual, attempt has been made to contain the relevant rules,
regulations, instructions, directives and guidance on best practices
concerning purchase of goods as well as allied areas such as installation
of equipment, after sales services including training, maintenance, etc.
Different aspects of procurement have been grouped under appropriate
sub-heads in separate chapters, which will help users to readily locate the
desired subjects/sub-subjects.

d) The procedure laid down in this Purchase Manual is to be followed by

NMDC involved in procurement of goods. However, these guidelines
would not be applicable to projects funded by World Bank and other
International Funding Agencies, as, such external aid/ loans etc. received
are covered under the applicable policies/ legal agreements executed as
permitted under Rule 264 of GFR 2017.

e) As and when any new policy and guideline is issued from Government of
India, the same shall be made part of this manual with the approval of
NMDC Management.

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CHAPTER – 2

2 GOI PURCHASE PREFERENCE POLICIES

Ministries under GoI issue notifications / orders related to public procurement

applicable to Central Government Ministries, Departments, and Public Sector
Undertakings. All extant purchase policies / notifications issued by
Government of India for Central Public Sector Undertakings, wherever
applicable, shall be followed by NMDC.

MM Department shall incorporate changes related to any amendments

issued regarding the relevant polices, add new preferential / mandatory
purchase policies issued by any ministry / regulatory authority under GoI,
remove preferential / mandatory purchase policies discontinued by the
corresponding ministry / regulatory authority under GoI and issue the
updated manual post approval of C/A.

All the applicable guidelines/ OMs issued by GoI will be updated at the
NMDC website and Inter-Departmental Office Orders/ Circulars will be
updated at nmdchyd intranet from time to time. All Projects /Units should
see and follow the same from time to time.

In addition to above, CVC guidelines issued by respective authorities from

time to time shall be referred and followed.

2.1 RESERVATION OF SPECIFIC ITEMS FOR PROCUREMENT FROM

MICRO AND SMALL ENTERPRISES (MSEs)

To enable wider dispersal of enterprises in the country, particularly in rural

areas, the Central Government Ministries or Departments or Public Sector
Undertakings shall continue to procure items reserved for procurement
exclusively from MSE [presently 358 (three hundred and fifty-eight] items
including eight items of Handicrafts) from Micro and Small Enterprises, which
have been reserved for exclusive purchase from them. The latest list can be
found on the MSME Ministry’s website. Ministry of MSME has clarified that
the laminated paper Gr. l, ll and Ill are not covered under the paper
conversion product (SI.No.202) of the Public Procurement Policy. NSIC may
be contacted to locate the sources of such reserved items.
https://www.dcmsme.gov.in/schemes/listof358itemsreserved.pdf

For procurement of items reserved for MSEs, tender document should clearly
indicate that the purchase will be made from suppliers falling the category of
MSEs with registrations as per the policy. Items in this list may be procured
from non-MSE firms if no offer is received from MSEs in the first tender
issued to MSEs only.

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2.2 PUBLIC PROCUREMENT POLICY FOR MICRO AND SMALL ENTERPRISES
(PPP-MSEs:2012) (Rule 153 (ii) of GFR 2017)

1) THE POLICY:
From time to time, the Government of India (Procuring Entity) lays down
procurement policies to help inclusive national economic growth by
providing long-term support to micro, small and medium enterprises, and
disadvantaged sections of society. The Procurement Policy for Micro and
Small Enterprises, 2012 [amended 2018 and 2021] has been notified by
the Government in the exercise of the powers conferred in Section 11 of
the Micro, Small and Medium Enterprises Development (MSMED) Act,
2006, which is mandatory to be followed by Central Government
Ministries/ Departments/ Public Sector Undertakings. Details of the policy,
along with the amendments issued in 2018 and 2021, are available on the
MSME website.

2) ELIGIBILITY:
a) Micro and Small Enterprises (MSEs) registered under Udyam
Registration are eligible to avail the benefits under the policy.
b) This Policy provides preferential procurement of goods produced and
services rendered by MSEs. Traders/ distributors/ sole agents/ Works
Contract are excluded from the purview of the policy.
i) In case of an upward change in terms of investment in plant and
machinery or equipment or turnover or both, and consequent re-
classification, an enterprise shall continue to avail of all nontax
benefits of the category (micro, small, or medium) it was in before
the re-classification, for a period of three years from the date of
such upward change.
ii) MSEs would be treated as owned by SC/ST or Women
entrepreneurs:
1) In the case of proprietary MSE, proprietor(s) are SC /ST or
Woman;
2) In the case of partnership MSE, the SC/ ST or Women partners
hold at least 51% (fifty-one per cent) shares in the unit;
3) In the case of Private Limited Companies, SC/ ST or Women
promoters hold at least 51% (fifty-one per cent) share.

3) APPLICABILITY AND EXEMPTIONS

a) The policy is applicable to Central Government Ministries/
Departments/ Public Sector Undertakings
b) The policy is not applicable to State Government Ministries/
Departments/ State PSEs, but they have similar policies applicable in
their state.
c) Exemptions: Given their unique nature, defence armament imports
shall not be included in computing the 25 (twenty-five) per cent goal for
the Ministry of Defence. In addition, defence equipment like weapon
systems, missiles, etc., shall remain out of the purview of such a
reservation policy. Monitoring of goals set under the policy will be done,

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as far as they relate to the Defence sector, by the Ministry of Defence
itself in accordance with suitable procedures to be established by them.

4) FACILITIES FOR MSE

a) Reduced Transaction Costs: To reduce the transaction cost of doing
business, MSEs will be facilitated by providing them tender documents
free of cost, exempting MSEs from payment of earnest money
deposits, and adopting e-procurement to bring transparency in the
tender process. However, exemption from paying Performance
Bank Guarantee/ Security Deposit is not covered under the policy.

b) Relaxation in Prior Turnover and Experience: The Procuring Entity

may relax the condition of prior turnover and prior experience for start-
up enterprises recognized by the Department for Industry & Internal
Trade (DPIIT), subject to meeting quality & technical specifications.
Startups may be MSMEs or otherwise. Such relaxation can be provided
in the case of procurement of works as well. It is further clarified that
such relaxation is not optional but normally has to be ensured, except in
case of procurement of items related to public safety, health, critical
security operations and equipment, etc) where adequate justification
exists for the Procuring Entity not to relax such criteria. The decision of
the Procuring Entity in this regard shall be final.

c) Timely Payments: Chapter V of the MSMED Act, 2006, also has

provisions for ensuring timely payments to the MSE suppliers. The
period agreed upon for payment must not exceed 45 (forty-five) days
from the deemed acceptance of the materials supplied by the MSMEs;
in case of any discrepancies in the supplies, then the Procuring Entity
shall raise an objection to the MSME supplier within 15 days from the
date of receipt of materials if such objection is not raised, then it will be
taken as deemed acceptance. For delays in payment, the buyer shall
be liable to pay compound interest to the supplier on the delayed
amount at three times the bank rate notified by the Reserve Bank. For
arbitration and conciliation regarding the recovery of such payments
and interests, the Micro and Small Enterprises Facilitation Council has
been set up in various states.

5) PURCHASE PREFERENCE:
a) Under the amended Public Procurement Policy for MSEs, Order 2012,
the Central Government Ministries/ Departments/ Public Sector
Undertakings shall procure a minimum of 25 per cent of their
annual value of goods or services from MSEs. (In accordance with
General Financial Rules, 2017, Rule 153-(ii)).

b) The annual goal of procurement from MSEs also includes subcontracts

to Micro and Small Enterprises by large enterprises and consortia of
Micro and Small Enterprises formed by the National Small Industries
Corporation. If a subcontract is given to MSEs, it will be considered as
procurement from MSEs.

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c) In tender, if the L1 price is from someone other than an MSE, participating
Micro and Small Enterprises (MSE) quoting prices within a price band of
L1+15 (fifteen) per cent shall be allowed to supply up to 25 (twenty-five)
per cent of the total tendered value by bringing down their price to L1 price.
If there is more than one eligible MSE within such price band who agree to
match the L1 price, the 25 (twenty-five) per cent quantity is to be
distributed proportionately to them

NOTE:
If the procuring entity negotiates with the non-MSE L1 bidder, the price
band (L1+15%) should be calculated based on the original L1 price, not the
lower negotiated price, and such eligible MSE bidders shall be called to
match the new negotiated L1 price as per procedure mentioned above for
placement of 25% quantity.

i) Out of the target of 25% of annual procurement from MSEs (Not in the
specific tender), the sub-target of 4% of annual procurement from MSEs
is earmarked for procurement from MSEs owned by Scheduled Caste
(SC)/ Scheduled Tribe (ST) entrepreneurs, and 3% of annual
procurement from MSEs is earmarked for procurement from MSEs
owned by women entrepreneur. However, in the event of failure of such
MSEs to participate in the tender process or meet tender requirements
and L1 price, the 4% sub-target for procurement earmarked for MSEs
owned by SC/ST entrepreneurs and 3% earmarked to women
entrepreneurs will also be met from other MSEs.

ii) In case the tender item cannot be split or divided, etc., the MSE
quoting a price within the band L1+15% may be awarded for full/
complete supply of total tendered value to MSE, considering the spirit of
the Policy for enhancing Govt. Procurement from MSEs.

iii) When an L1 bidder is not a Micro and Small Enterprise (MSE), MSE
bidders eligible for purchase preference under the policy are those
whose prices fall within the preference margin of L1+15%. If the
procuring entity negotiates with the L1 bidder, the preference margin
(L1+15%) should be calculated based on the original L1 price, not the
lower negotiated price. Such eligible MSEs should be invited to match
the negotiated L1 price as per the policy.

6) DEVELOPING MSE VENDORS

The Central Ministries or Departments or Public Sector Undertakings shall
take necessary steps to develop appropriate vendors by organising Vendor
Development Programmes (VDP) or Buyer-Seller Meets focused on
developing Micro and Small Enterprises (MSEs) for procurement through
GeM Portal. To enhance the participation of MSEs owned by SCs /STs/
Women in Government procurement, Central Government Ministries/
Departments/ CPSEs should conduct Special Vendor Development
Programmes/ Buyer-Seller Meets for SC/STs and Women MSEs.

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7) POLICY IMPLEMENTATION:
a) A Review Committee has been constituted under the Chairmanship of
the Secretary, Ministry of MSME, to monitor and review the Public
Procurement Policy for MSEs. M/o MSME will review and/or modify the
composition of the Committee as and when required. This Committee
will, inter alia, review the list of 358 items reserved for exclusive purchase
from MSEs on a continuous basis, consider requests from Central
Government Departments CPSEs for exemption from 25 (twenty-five) per
cent target on a case-to-case basis and monitor achievements under the
Policy.

b) To monitor the progress of procurement by Central Government

Ministries/ Departments and CPSEs from MSEs, the Ministry of MSME
launched the MSME ‘Sambandh’ Portal on 8th December 2017 for
uploading procurement details by all CPSEs on a monthly and an annual
basis, which the Ministry regularly monitors.

c) To redress the grievances of MSEs related to non-compliance with the

policy, a Grievance cell named “CHAMPION Portal” has been set up in
the Ministry of MSME.

d) A National SC/ST hub (NSSH - https://scsthub.in/) scheme was launched

in October 2016 to provide handholding support to SC/ST entrepreneurs,
and it is being coordinated / implemented by the NSIC under this
Ministry.

e) Clarifications: The office of the Development Commissioner (Micro,

Small & Medium Enterprises) issued an FAQ on the Public Procurement
Policy for MSE Order, 2012, which is in Annexure 2-I (P-198).

2.3 PUBLIC PROCUREMENT (PREFERENCE TO MAKE IN INDIA) ORDER 2017

To encourage ‘Make in India’ and promote manufacturing and production of

goods and services in India with a view to enhancing income and employment,
Department for Promotion of Industry and Internal Trade, in partial
modification (Paras 2,3,5,10 & 13) of Order No. P-45021/2/2017-B.E-II dated
15.06.2017 as amended by Order No. P-45021/2/2017-B.E-II dated
28.05.2018, Order No.P-45021/2/2017-B.E-II dated 29.05.2019, Order No. P-
45021/2/2017-B.E-II dated 04.06.2020 and Order No. P-45021/2/2017-B.E-II
dated 16.09.2020 hereby issues the revised “Public Procurement
(Preference to Make in India), Order 2017” dated 19.07.2024 effective with
immediate effect.

Whereas it is the policy of the Government of India to encourage ‘Make in

India’ and promote manufacturing and production of goods and services in
India with a view to enhancing income and employment, and

Whereas procurement by the Government is substantial in amount and can

contribute towards this policy objective, and

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Whereas local content can be increased through partnerships, cooperation
with local companies, establishing production units in India or Joint Ventures
(JV) with Indian suppliers, increasing the participation of local employees in
services and training them,

2.3.1 Now therefore the following Order is issued:

1) This order is issued pursuant to Rule 153(iii) of the General Financial

Rules 2017.

2) Definitions: For the purpose of this Order:

‘Local content’ means the amount of value added in India which shall,
unless otherwise prescribed by the Nodal Ministry, be the total value of the
item procured (excluding net domestic indirect taxes) minus the value of
imported content in the item (including all customs duties) as a proportion
of the total value, in percent.

Explanatory notes for calculation of local content given above

a) Imported items sourced locally from resellers / distributors shall be

excluded from calculation of local content.
b) The license fees / royalties paid / technical charges paid out of India shall
be excluded from local content calculation.
c) Procurement / Supply of repackaged/refurbished/ rebranded imported
products as understood commonly shall be treated as reselling of
imported products and shall be excluded from calculation of local
content. The definition of repackaged / refurbished / rebranded imported
products is as follows:

‘Refurbishing’ means repair or recondition of an imported product does

not amount to manufacture because no new goods come into existence.
‘Repackaging’ means repacking of imported goods from bulk pack to
smaller packs would not ordinarily amount to manufacture of a new item.

‘Rebranding’ means relabeling or renaming or change in symbol or logo

/ makes or corporate image of a company / organization / firm for an
imported product would amount to rebranding.

d) To ensure that imported items sourced locally from resellers / distributors

are excluded from calculation of local content, procuring entities to obtain
from bidders, the cost of such locally-sourced imported items (Inclusive
of taxes) along with break-up on license / royalties paid / technical
expertise cost etc. sourced from outside India. For items sold by bidder
as reseller, OEM certificate for country of origin to be submitted.

e) For contracts involving supply of multiple items, weighted average

of all items to be taken while calculating the local content.

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f) Class-I local supplier’ means a supplier or service provider, whose
goods, services or works offered for procurement meets the minimum
local content as prescribed for ‘Class-I local supplier’ under this Order.

g) ‘Class-II local supplier’ means a supplier or service provider, whose

goods services or works offered for procurement, meets the minimum
local content as prescribed for ‘Class-II local supplier’ but less than that
prescribed for ‘Class-I local supplier’ under this Order.

h) ‘Non-Local supplier’ means a supplier or service provider, whose

goods, services or works offered for procurement, has local content less
than that prescribed for ‘Class-II local supplier’ under this Order.

i) ‘L1’ means the lowest tender or lowest bid or the lowest quotation
received in a tender, bidding process or other procurement solicitation as
adjudged in the evaluation process as per the tender or other
procurement solicitation.
j) ‘Margin of purchase preference’ means the maximum extent to which
the price quoted by a ‘Class-I local supplier’ may be above the L1 for the
purpose of purchase preference.
k) ‘Nodal Ministry’ means the Ministry or Department identified pursuant to
this order in respect of a particular item of goods or services or works.
l) ‘Procuring entity’ means a Ministry or Department or attached or
subordinate office of, or autonomous body controlled by, the Government
of India and includes Government companies as defined in the
Companies Act.
m) ‘Works’ means all works as per Rule 130 of GFR-2017 and will also
include ‘turnkey works’.

2.3.2 Eligibility of 'Class-I local supplier' / 'Class-II local supplier'/ 'Non-local

suppliers' for different types of procurement:

a) In Procurement of all goods, services or works in respect of which the

Nodal Ministry / Department has communicated that there is sufficient local
capacity and local competition, on ‘Class-I local supplier’, as defined under
the Order, shall be eligible to bid irrespective of purchase value.

b) Only ‘Class-I local supplier’ and ‘Class-II local supplier’, as defined under
the Order, shall be eligible to bid in procurement undertaken by procuring
entities, except when Global tender enquiry has been issued. In global
tender enquiries, ‘Non-local suppliers’ shall also be eligible to bid along
with ‘Class-I local suppliers’ and ‘Class-II local suppliers’. In procurement of
all goods, services or works not covered by sub-para 3(a) above, and with
estimated value of purchases less than Rs. 200 Crore, in accordance
with Rule 161(iv) of GFR, 2017, Global tender enquiry shall not be issued
except with the approval of competent authority as designated by
Department of Expenditure.

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c) For the purpose of this Order, works includes Engineering, Procurement
and Construction (EPC) contracts and services include System Integrator
(SI) contracts.

2.3.3 CLARIFICATION FOR LOCAL CONTENT CALCULATION

The bidders offering imported products will fall under the category of Non-
Local suppliers. They cannot claim themselves as Class-I local suppliers/
Class-II local suppliers by claiming the services such as transportation,
insurance, installation, commissioning, training and after sales service support
like AMC/CMC etc. as local value addition.
DPIIT OM No: P-45021/102/2019-BE-II/Part(1) (E-50310) dt:04.03.2021

2.3.4 PURCHASE PREFERENCE

a) Subject to the provisions of this Order and to any specific instructions
issued by the Nodal Ministry or in pursuance of this Order, purchase
preference shall be given to ‘Class-I local supplier’ in procurement
undertaken by procuring entities in the manner specified hereunder.

b) In the procurement of goods or works, which are covered by 3(b) above

and which are divisible in nature, the ‘Class-I local supplier’ shall get
purchase preference over ‘Class-II local supplier’ as well as ‘Non-local
supplier’, as per following procedure.

i). Among all qualified bids, the lowest bid will be termed as L1. If L1 is
‘Class-I local supplier’, the contract for full quantity will be awarded to
L1.
ii). If L1 bid is not a ‘Class-I local supplier’, 50% of the order quantity shall
be awarded to L1. Thereafter, the lowest bidder among the ‘Class-I
local supplier’, will be invited to match the L1 price for the remaining
50% quantity subject to the Class-I local supplier’s quoted price falling
within the margin of purchase preference, and contract for that quantity
shall be awarded to such ‘Class-I local supplier’ subject to matching the
L1 price.
In case such lowest eligible ‘Class-I local supplier’ fails to match the L1
price or accepts less than the offered quantity, the next higher ‘Class-I
local supplier’ within the margin of purchase preference shall be invited
to match the L1 price for remaining quantity and so on, and contract
shall be awarded accordingly. In case some quantity is still left
uncovered on Class-I local suppliers, then such balance quantity may
also be ordered on the L1 bidder.
c) In the procurement of goods or works, which are covered by para 3(b)
above and which are not divisible in nature, and in procurement of
services where the bid is evaluated on price alone, the ‘Class-I local

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supplier’ shall get purchase preference over ‘Class-II local supplier’ as well
as ‘Non-local supplier’, as per following procedure.

i). Among all qualified bids, the lowest bid will be termed as L1. If L1 is a
Class-I local supplier, the contract will be awarded to L1.
ii). If L1 is not ‘Class-I local supplier’, the lowest bidder among the local
suppliers, will be invited to match the L1 price subject to Class-I local
supplier's quoted price falling within the margin of purchase preference,
and the contract shall be awarded to such ‘Class-I local supplier’ fails to
match the L1 price.
iii). In case such lowest eligible ‘Class-I local supplier’ fails to match the L1
price, the ‘Class-I local supplier’ with the next higher bid within the
margin of purchase preference shall be invited to match the L1 price
and so on and contract shall be awarded accordingly. In case none of
the ‘Class-I local supplier’ within the margin of purchase preference
matches the L1 price, the contract may be awarded to the L1 bidder.
d) “Class-I local supplier” will not get purchase preference in any
procurement, undertaken by procuring entities.
NOTE:

Negotiations shall not be conducted with bidders as a matter of routine. For

recorded reasons negotiations may be conducted with L1 bidder with the
approval of Competent Authority. In such case the eligible Class-I MSE/Non-
MSE bidder will have to match Negotiated L1 Price. The margin of preference
(20% for Class-I MSE/ Non-MSE) shall be based on pre-negotiated L1 price
but all other criteria defined above shall be based on Negotiated L1 price.

2.3.5 Applicability in tenders where contract is to be awarded to multiple

bidders – In tenders where contract is awarded to multiple bidders
subject to matching of L1 rates or otherwise, the ‘Class-I local supplier’
shall get purchase preference over ‘Class-II local supplier’ as well as
‘Non-local supplier’, as per following procedure:

a) In case there is sufficient local capacity and competition for the item to be
procured, as notified by the nodal Ministry, only Class I local suppliers
shall be eligible to bid. As such, the multiple suppliers, who would be
awarded the contract, should be all and only ‘Class I Local Suppliers’.

b) In other cases, ‘Class II local suppliers’ and ‘Non local suppliers’ may
also participate in the bidding process along with ‘Class I Local suppliers’
as per provisions of this Order.

c) If ‘Class I Local supplier’ qualify for award of contract for at least 50% of
the tendered quantity in any tender, the contract may be awarded to all
the qualified bidders as per award criteria stipulated in the bid
documents. However, in case ‘Class I Local suppliers’ do not qualify for

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award of contract for at least 50% of the tendered quantity, purchase
preference should be given to the ‘Class I local supplier’ over ‘Class II
local suppliers’ / Non local suppliers’ provided that their quoted rate falls
within 20% margin of purchase preference of the highest quoted bidder
considered for award of contract so as to ensure that the ‘Class I Local
suppliers’ taken in totality are considered for award of contract so as to
ensure that the ‘Class I Local suppliers’ taken in totality are considered
for award of contract for at least 50% of the tendered quantity.

d) First purchase preference has to be given to the lowest quoting ‘Class-I

local supplier’, whose quoted rates fall within 20% margin of purchase
preference, subject to its meeting the prescribed criteria for award of
contract as also the constraint of maximum quantity that can be sourced
from any single supplier. If the lowest quoting ‘Class-I local supplier’,
does not qualify for purchase preference because of aforesaid constraints
or does not accept the offered quantity, an opportunity may be given to
next higher ‘Class-I local supplier’, falling within 20% margin of purchase
preference, and so on.
e) To avoid any ambiguity during bid evaluation process, the procuring
entities may stipulate its own tender specific criteria for award of contract
amongst different bidders including the procedure for purchase
preference to ‘Class-I local supplier’ within the broad policy guidelines
stipulated in sub-paras above.
2.3.6 EXEMPTIONS OF SMALL PURCHASES
Notwithstanding anything contained in paragraph 3, procurement where the
estimated value to be procured is less than Rs. 5 lakhs shall be exempt
from this Order. However, it shall be ensured by procuring entities that
procurement is not split for the purpose of avoiding the provisions of this
Order.
2.3.7 Exemption in sourcing of spares and consumables of closed systems:
Procurement of spare parts, consumables for closed systems and
Maintenance / Service contracts with Original Equipment Manufacturer /
Original Equipment Supplier / Original Part Manufacturer shall be exempted
from this Order.

2.3.8 Minimum local content:

The ‘local content’ requirement to categorize a supplier as ‘Class-I local
supplier’ is minimum 50%. For ‘Class-II local supplier’, the ‘local
content’ requirement is minimum 20%. Nodal Ministry / Department may
prescribe only a higher percentage of minimum local content requirement to
categorize a supplier as ‘Class-I local supplier’ / Class-II local supplier’. For
the items, for which Nodal Ministry / Department has not prescribed higher
minimum local content notification under the Order, it shall be 50% and 20%
for ‘Class-I local supplier’ / ‘Class-II local supplier’ respectively.

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2.3.9 Margin of Purchase Preference
The margin of purchase preference shall be 20%.

2.3.10 Requirement for specification in advance

The minimum local content the margin of purchase preference and the
procedure for preference to Make in India shall be specified in the notice
inviting tenders or other form of procurement solicitation and shall not be
varied during a particular procurement transaction.

2.3.11 VERIFICATION OF LOCAL CONTENT

a) The ‘Class-I local supplier’ / ‘Class-II local supplier’ at the time of

tender, bidding or solicitation shall be required to indicate percentage of
local content sand provide self-certification that the item offered meets
the local content requirement for ‘Class-I local supplier’/ ‘Class-II local
supplier’, as the case may be. They shall also give details of the
location(s) at which the local value addition is made. Annexure 2-I (P-
198).

b) In cases of procurement for a value in excess of Rs. 10 crores, the

‘Class-I local supplier’ / ‘class-II local supplier’ shall be required to provide
a certificate from the statutory auditor or cost auditor of the company (in
the case of companies) or from a practicing cost accountant or practicing
chartered accountant (in respect of suppliers other than companies) giving
the percentage of local content. Annexure 2-I (P-199).

c) The bidder shall give self-certification for local content in the quoted item
(goods/works/services) at the time of tendering. However, at the time of
execution of the project, for all contracts above INR 10 Crore, the
contractor / supplier shall be required to give local content certification duly
certified by cost / charted accountant in practice. For cases where it is not
possible to provide certification by Cost / Chartered Accountant at the time
of execution of project, the supplier shall be permitted to provide the
certificate for local content from Cost / Chartered Accountant after
completion of the contract, within time limit acceptable to the procuring
entity. In case the contractor / supplier does not meet the stipulated local
content requirement and the category of the supplier changes from Class-I
to Class-II / Non-local or from Class-II to Non-local, a penalty upto 10% of
the contract value may be imposed. However, contract once awarded
shall not be terminated on this account.

d) Decision on complaints relating to implementation of this Order shall be

taken by the Competent Authority which is empowered to look into
procurement-related complaints relating to the procuring entity.

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e) Nodal Ministries may constitute committees with internal and external
experts for independent verification of self-declarations and auditor’s /
accountant’s certificates on random basis and in the case of complaints.

f) Nodal Ministries and procuring entities may prescribe fees for such
complaints.

g) False declarations will be in breach of the Code of Integrity under Rule

175(1)(i)(h) of the General Financial Rules for which a bidder or its
successors can be debarred for up to two years as per Rule 151(iii) of the
General Financial Rules along with such other actions as may be
permissible under law.

h) A supplier who has been debarred by any procuring entity for violation of
this Order shall not be eligible for preference under this Order for
procurement by any other procuring entity for the duration of the
debarment. The debarment for such other procuring entities shall take
effect prospectively from the date on which it comes to the notice of other
procurement entities, in the manner prescribed under paragraph below.

i) The Department of Expenditure shall issue suitable instructions for the

effective and smooth operation of this process, so that:

i). The fact and duration of debarment for violation of this Order by any
procuring entity are promptly brought to the notice of the Member-
Convenor of the Standing Committee and the Department of
Expenditure through the concerned Ministry / Department or in some
other manner.
ii). On a periodical basis such cases are consolidated and a centralized
list or decentralized lists of such suppliers with the period of
debarment is maintained and displayed on website(s):
iii). In respect of procuring entities other than the one which has carried
out the debarment, the debarment takes effect prospectively from the
date of uploading on the website(s) in the such a manner that ongoing
procurements are not disrupted.
2.3.12 SPECIFICATIONS IN TENDERS AND OTHER PROCUREMENT
SOLICITATIONS

a) Every procuring entity shall ensure that the eligibility conditions in respect
of previous experience fixed in any tender or solicitation do not require
proof of supply in other countries or proof of exports.
b) Procuring entities shall endeavor to see that eligibility conditions,
including on matters like turnover, production capability and financial
strength do not result in unreasonable exclusion of ‘Class-I local supplier’
/ ‘Class-II local supplier’ who would otherwise be eligible, beyond what is
essential for ensuring quality or creditworthiness of the supplier.

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c) Procuring entities shall, within 2 months of the issue of this Order review
all existing eligibility norms and conditions with reference to sub-
paragraphs ‘a’ and ‘b’ above.

2.3.13 RECIPROCITY CLAUSE

i). When a Nodal Ministry / Department identifies that Indian suppliers of an

item are not allowed to participate and / or compete in procurement by
any foreign government, due to restrictive tender conditions which have
direct or indirect effect of barring Indian companies such as registration in
the procuring country, execution of projects of specific value in the
procuring country etc., it shall provide such details to all its procuring
entities including CMDs/CEOs of PSEs/PSUs, State Governments and
other procurement agencies under their administrative control and GeM
for appropriate reciprocal action.

ii). Entities of countries which have been identified by the nodal Ministry /
Department as not allowing Indian companies to participate in their
Government procurement for any item related to that nodal Ministry shall
not be allowed to participate in Government procurement in India for all
items related to that Nodal Ministry / Department, except for the list of
items published by the Ministry / Department permitting their participation.

iii). The stipulation in (ii) above shall be part of all tenders invited by the
Central Government procuring entities stated in (i) above. All purchases
on GeM shall also necessarily have the above provisions for items
identified by nodal Ministry / Department.

iv). State Governments should be encouraged to incorporate similar

provisions in their respective tenders.

v). The term ‘entity’ of a country shall have the same meaning as under the
FDI Policy of DPIIT as amended from time to time.

2.3.14 Guidelines issued by DoE/ DPIIT/ Ministry on “Public Procurement

(Preference to Make in India), Order 2017” shall be followed from time
to time.

2.3.15 DISTRIBUTION OF QUANTITY W.R.T PPP-MSE & PPP-MII POLICIES

COMBINATION

Distribution of Quantity with reference to two Preferential Procurement

Orders (i.e. PPP-MSE Order and PPP-MII Order) shall be as per DoE OM
No: F.1/1/2023-PPD dtd: 18/05/2023 or as per any OMs issued subsequently
by GoI from time to time Annexure 2-II (P-200).

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2.4 RESERVATION OF PROCUREMENT OF CERTAIN CLASS OF PRODUCTS
FROM CERTAIN AGENCIES - KHADI GOODS/ HANDLOOM TEXTILES

Ministry of Textiles, GoI has reserved all Khadi goods for exclusive purchase
from Khadi & Village Industries Commission (KVIC). Of all items of textiles
required by Central government departments / PSU’s at least 20% must be
procured from amongst items of handloom origin and shall be exclusively
purchased from KVIC and/or Handloom clusters such as Co-operative
societies, Self Help Group (SHG) Federations, Joint liability Group (JLG),
Producer companies (PC), Corporations etc. including weavers having
Pehchan cards.

GFR rule 153 and Order No. F.10/2/2019-PPD(Pt) dated 17.02.2020 issued
by Ministry of Finance, Department of Expenditure regarding amendment to
GFR Rule 153 shall be referred for procurement of textiles. In case of any new
amendments or orders / notifications issued by GoI regarding this policy, the
same shall be followed.

2.5 RESERVATION OF PROCUREMENT OF CERTAIN CLASS OF PRODUCTS FROM

CERTAIN AGENCIES – PHARMACEUTICALS FROM PHARMACEUTICAL CPSEs

The pharmaceuticals Purchase Policy, 2013 is intended to ensure

1) Optimum utilization of the installed capacity and to provide necessary

fillip in reviving these ailing pharmaceuticals CPSEs.
2) Availability of quality medicines at low prices to the masses.
3) Drugs security of the nation.

THE SALIENT FEATURES OF THIS POLICY ARE AS FOLLOWS

The Pharmaceuticals Purchase Policy, 2013 issued by Department of

Pharmaceuticals, directs all Ministries / Departments / PSU’s of Central as well
as State Government to grant exclusive purchase preference to Central
Pharma PSUs in case of 103 notified medicines.

Of the 5 Central Pharma PSUs under Department of Pharmaceuticals, GoI

has decided to close 2 of them, Indian Drugs & Pharmaceuticals Ltd (IDPL)
and Rajasthan Drugs & Pharmaceuticals Ltd (RDPL). GoI has also decided to
strategically disinvest the other three Central Pharma PSU’s – Hindustan
Antibiotics Ltd (HAL), Bengal Chemicals & Pharmaceuticals Ltd (BCPL) and
Karnataka Antibiotics & Pharmaceutical Ltd (KAPL).

The Pricing of the products would be done by National Pharmaceutical Pricing

Authority (NPPA) using the cost-based formula, as mentioned in the Drugs
Price Control Order, 1995.A uniform discount of 16% would be extended to all
products. All the taxes, whatsoever, would have to be passed on to buyers.

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Annual revision of the prices would be linked to Wholesale Price Index as per
provisions contained in drugs Prices Control Order,2013.

The Pharmaceuticals Purchase Policy, 2013 policy was initially approved for 5
years. GoI has extended the policy till final closure or sale of Central Pharma
PSUs. The current list of 103 specified medicines to be procured from
Central Pharma PSUs w.r.t

Department of Pharmaceuticals, Ministry of Chemicals and Fertilizers, OM

50(9)/2010-PI-IV Dtd 10/12/2013

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CHAPTER – 3
3 MATERIAL CONTROL
Material Control (MC) Section will cover functions related to material
planning, classification, codification etc. Periodical monitoring of inventory
buildup, trend of consumption, moving/ non-moving inventory, insurance
items etc. will be carried out by Material Control Section. Depending upon the
analysis of the results of inventory, further action for reducing inventory
holding, achieving higher inventory turnover ratio etc. shall be initiated by
Material Control Section at Head Office in consultation with the individual
projects / units.
3.1 MATERIALS CLASSIFICATION
3.1.1 For purpose of planning, it is necessary to classify the materials. Materials
are classified into the following categories as per ERP.

S.NO CODE DESCRIPTION

i. ZROH RAW MATERIALS
ii. ZSPR SPARES
iii. ZCON CONSUMABLES
iv. ZTOL TOOLS
v. ZPOL OIL & LUBRICANTS
vi. ZEXP EXPLOSIVES
vii. ZCIV CIVIL ITEMS
viii. ZCAP CAPITAL ITEMS
ix. ZMED MEDICINES
x. ZNVL NON-VALUATED ITEMS (Only Qty updated and not value)
xi. ZSCR SCRAP MATERIALS
3.1.2 These are also classified and reviewed as fast moving, slow moving, non-
moving and insurance items.
i) Fast moving item is an item which has moved at least once in a year.
ii) Slow moving item is an item that has not moved at least once in a year
but has moved at least once in last five years.
iii) Non-Moving items is that item which has not moved for the last five
years.

3.1.3 MATERIAL REQUIREMENT PLAN – MRP/ AUTOMATIC REPLENISHMENT

SYSTEM (ARS) ITEMS
MRP(ARS) items are normally regular consumable and fast-moving items
that are generally of low unit value. MRP(ARS) items shall be projects
specific and shall be reviewed annually. Any addition/ deletion of MRP(ARS)
items shall be done as per the approval of HoP.
Efforts should be made to cover only regular consumable items under this
category and care should be taken for non-inclusion of items which are slow
moving in MRP(ARS) category.

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Reordering level for MRP(ARS) items will be fixed considering the safety
stock requirement and the expected lead time for procuring the item. Safety
stock will be decided based on the criticality of the item, lead period for
procurement, degree of safety required and unit cost of the item.

CONSUMPTION NORMS:
With regard to MRP Items, realistic, practical norms would be laid against
which consumption would be compared and improvements made.

In case the physical stock figures and those on ERP system do not tally,
urgent action would be taken and special efforts would be made to reconcile
the figures, otherwise this would interfere with forecasting and availability of
items.
3.2 INVENTORY ANALYSIS & MATERIAL PLANNING
Growth of inventory holding, and utilization of the available resources needs
to be checked periodically both in material and financial terms, to enable
better material planning.
Emphasis will be on checking growth of inventory holding and better
utilization of the available resources both in material and financial terms. As
much as possible, required information / reports for these analysis / initiatives
shall be generated from ERP system.

The following analysis / initiatives would be conducted in this regard:

1) Non-moving analysis
2) ABC analysis
3) High value holding analysis (XYZ)
4) Review of slow-moving items
5) Indigenous Development
6) Review of pending orders and indents
7) Inventory Analysis monthly code group wise

3.2.1 NON-MOVING ITEMS ANALYSIS

Items not moved for 5 years will be scrutinized by a technical committee for
its utilization or otherwise. Steps would be taken at project so that Purchase
Requisitions for non-moving items are not raised again, until the existing
stocks are utilized.
All items held in stock will be subjected to non-movement analysis
segregating the items for different non movement periods like over 5 years,
over 8 years and over 10 years so as to critically analyze the possibility of
utilization of these items or otherwise for declaring obsolete especially those
which have not moved for more than 5 years. This analysis will be jointly
done by Materials Management Department with the concerned User
Departments at the project. If still not required, these items would be
processed for obsolete declaration as detailed in Chapter - 11 of this manual.

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List of non-moving items that have not moved for different periods across the
projects / units shall be generated from ERP system by HO and circulated to
all projects / units to help its utilization and reduce further Purchase
Requisitions of those items by other projects / units.

Every effort will be made to keep non-moving inventory as low as practicable

because this is non-productive inventory which is blocking the capital,
storage space, needing preservation and upkeep efforts and resulting in
extra inventory carrying cost. The non-moving inventory is to be reduced as
far as possible by regular review for utilization or by declaring as obsolete.

3.2.2 ABC ANALYSIS (ANNUAL REPORT)

3.2.2.1 All spares and stores other than construction stores meant for specific
construction activities should be subjected to consumption (value wise)
analysis covering specific periods.
a) Items constituting 70% of the total annual consumption by value will be
classified as 'A' class items. Only about 10% items by number would
normally come under this category.
b) Items constituting the next 20% of annual consumption value will be
classified as 'B' class items. About 20% items by numbers would fall
under this classification.
c) The remaining moving items constituting 10% consumption value would
be classified as 'C' Class items. Very large number (70%) of items by
numbers would fall under this classification whose consumption value
would be comparatively very low.

3.2.2.2 CONSUMPTION CONTROL

ABC analysis helps in controlling 70% consumption value by concentrating
only on few items under 'A' Category. Hence highest-level control for these
'A' items while indenting, ordering, follow up, stocking and consumption
would be exercised to control 70% consumption items. These items should
be given minute and regular attention and reviewed at regular intervals.
Requirement of 'A' items should be analyzed minutely, specifications
subjected to value analysis / value engineering, ordering with minimum lead
period, monitoring of stock holding of such items, phasing of supplies in
smaller lots to be received more frequently to avoid holding big stocks, high
level and live wire follow up for supplies to ensure all time availability, and
regular analysis for control of consumption reducing wastages/ leakages and
co-relation to the ultimate product.
Similarly, 'B' class items would require middle level control in indenting,
ordering, stocking, and consumption. These items should be given medium
level attention.
'C' category items should be liberally indented and stocked to ensure
availability of most of the consumption items so that more energy and
resources are devoted in controlling other activities.

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3.2.2.3 Normally, ABC report shall be generated on yearly basis at the end of the
financial year, based on the total annual consumption for the financial year.
3.2.2.4 ABC items would be listed code group wise, for detailed analysis. ABC list
would be supplied equipment wise to the concerned departments for
reference and control.

3.2.3 HIGH VALUE HOLDING ANALYSIS (XYZ) (ANNUAL REPORT)

3.2.3.1 Inventory holding of each project will also be analyzed with reference to
value of the holdings against each item.
a) It is found that about 70% of the total cumulative holding would be
covered by very small percentage of items by number which may be
around 10%. This category would be classified as‚ ‘X’ class items.
b) Similarly, items accounting for 20% of the total holding would be
categorized as‚ ‘Y‘ class items and would be listed and controlled for
indenting and consumption at middle level at each project.

c) The remaining inventory holding items accounting for only 10% by

value will be classified as‚ ‘Z‘ class items and would receive lower-
level attention.

3.2.3.2 The list of‚ ‘X‘ class items would be regularly reviewed with reference to
Purchase Requisitions and consumption at very senior level in the project.

3.2.3.3 ‘X‘ class items without any movement for 5 years and 10 years would be
separately listed and critically analyzed for its use or declaration as
obsolete. Very high-level review should be carried out of such items.

The list of ‘X‘ class items will be reviewed and analyzed with reference to
past consumption and critical control would be exercised at the time of its
indenting and ordering. Efforts should be made to phase deliveries of such
high value holding items.

3.2.3.4 Corrective steps may be suggested for reviewing PRs and orders for list of
items with excessive buildup of inventory, compared to the rate of
consumption. These lists will also be circulated to all the projects after
consolidation at Head Office and would be used for inter-project transfer
of such items to avoid holding of similar stocks by different projects.

3.2.4 REVIEW OF SLOW-MOVING ITEMS

All slow-moving items shall be reviewed on yearly basis by MM Dept.
Utmost care should be taken while indenting slow moving items as these
items are likely to add to the non-moving inventory and building up of the
inventory at the project.

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3.2.5 INDIGENOUS DEVELOPMENT

After listing out all imported spares and stores in stock, these would be
subjected to sustained effort for indigenous development on selective basis
at a time for regular moving items. Few items would be selected each year
for indigenous development by each project and necessary drawings and
other particulars would be worked out and quotations obtained, discussions
made on salient points and trial orders be placed as per provisions in this
manual (chapter-9). The indigenous development orders will be processed
in consultation with user departments.

Material Control (MC) Section at projects shall also co-ordinate the

indigenous development of imported items and will monitor the performance
of such indigenously developed items and maintain a regular record of the
same. Such information will also be consolidated and conveyed to the
projects. Only such sources as found satisfactory will be approached for
getting regular supplies. Concerned projects will provide performance data
of indigenously developed items at regular intervals.

3.2.6 REVIEW OF PENDING ORDERS AND PRs

Material Control (MC) Section will monitor the progress of various pending
Purchase Requisitions (PRs) and pending orders through corresponding
reports generated by ERP system on monthly basis.

POs & PRs pending for release of PO for more than 365 days for various
projects would be regularly monitored for order placement and supplies.
Monthly statement would be submitted to the Heads of projects and
Functional Director at HO.

Post Review, the old POs & PRs must be deleted in the ERP system
subject to approval of C/A.

3.2.7 INVENTORY ANALYSIS MONTHLY CODE GROUP WISE

Inventory held at various projects will be monitored on monthly basis by the

respective projects as well as at the corporate level. This statement will also
show the monthly issues, receipts against different code groups. This
statement will be drawn on monthly basis from the ERP system. This
monitoring will be co-related with reference to the opening balances at the
beginning of the previous three financial years for each code wise and for
the total inventory holding.

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FOLLOWING SELECTIVE APPROACH COULD BE ADOPTED FOR
ACHIEVING DESIRED RESULTS:
a) Material Planning, classification and inventory control would play a very
vital role in achieving proper inventory control.

b) Material control section at projects will progress the indents with

respective purchase offices and obtain progress reports of order
placements, number of items covered and funds utilized there against
on monthly basis.
c) Fixing of various stock holding levels - Generally stock items of selected
regular moving nature (Automatic Replenishment system - ARS items)
will be subjected to fixing various stock levels as under:

d) Maximum stock level - This will be based on safety stock, review period
frequency consumption and lead time consumption.
e) Re-ordering level: This will include safety stock and lead time
consumption.

f) Minimum stock level: Minimum will be equal to the safety stock.

g) Safety stock: Safety stock will be fixed according to the criticality of the
item and lead period for procurement and degree of safety required,
and unit cost of the item.

h) Inventory Planning and control functions at Head Office shall be

controlled by M C section at HO in association with different units.

i) Periodical monitoring of inventory buildup, trend of consumption,

moving/non-moving inventory, insurance items etc. will be carried out at
Head Office by MC section.

j) Depending upon the analysis of the results of inventory, further action

for reducing inventory holding, achieving higher inventory turnover ratio
etc. shall be initiated by MC at Head Office in consultation with the
individual units on quarterly basis.
k) MC at Head Office shall also obtain reports on consumption of selected
high value items on quarterly basis and analyse them with reference to
the corresponding production. Based on this analysis the units will be
advised to exercise control on such items which show higher
consumption per units of production.

l) MC Section at Projects will be responsible for receipt, registration,

scrutiny of indents regarding specifications, drawings, budgets and RC
items, conducting review meeting of slow-moving spares and getting
approval of the same by the competent authority.

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m) The import licences whenever required are to be processed by HO-MC
section in consultation with purchase section at Head office. The
positions of export obligations redemptions / letter of undertaking / BG
submitted for obtaining licence and clearance of import consignments
are to be monitored by MC section.

n) Any item locally manufactured would be shown against respective

equipment and recorded in the history sheet and should be taken into
account for forecasting.

o) Forecasting of the spares would be done for running repairs and over
hauls separately which may be clubbed later to decide the total
requirement.

3.3 BUDGETING

STANDARD OPERATING PROCEDURE FOR BUDGET INDICATED IN

THE DOP SHALL BE FOLLOWED FROM TIME TO TIME.

3.4 MATERIALS CODIFICATION

Material Group codes generated by ERP system for various equipment types
can be referred in Annexure 3-I (P-208).

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CHAPTER – 4

4 PURCHASE REQUISITIONS AND SPECIFICATIONS

4.1 PURCHASE REQUISITION

4.1.1 RAISING OF PURCHASE REQUISITION (PR)

a) PR for operational spares and stores (Annual PRs & Piecemeal PRs)
will be prepared by user. All efforts will be made to reduce the
piecemeal PRs.
b) The explosives PRs will be prepared by Mining Department.

c) The PRs under MRP(ARS) should be generated by ERP system.

Materials Management Department shall be responsible for ensuring
PRs under MRP(ARS) are generated on monthly basis. PR under
MRP(ARS) should be Vetted by Finance.

d) In respect of Feasibility Units, GEC (Global Exploration Centre -Raipur)

Research Development Laboratories and construction projects PRs
may be raised by respective User Departments.

e) PRs for capital equipments and piecemeal requirements shall be

prepared by the respective User Departments separately.

The officer raising the PR shall include detailed specifications, drawings

(scanned copies to be uploaded in ERP system along with PR) as
applicable. In addition, a reference to AMR or approval to the
replacement programme and to budget sanction (wherever applicable)
shall be indicated in WBS element of PR.

f) For equipment & spares of long delivery period, projects can do

advance planning and if necessary, PR can be raised for the next 2
years, provided the procurement budget is provisioned for that year.

Document Type codes as per ERP to be used for raising PR

S.NO DOCUMENT TYPE MATERIAL CLASSIFICATION
i. ZANN ANNUAL REQUISITION
ii. ZCAP CAPITAL REQUISITION
iii. ZCOM COMPOSITE PR
iv. ZNB INTER STOCK REQUISITION
v. ZUB INTRA STOCK REQUISITION
vi. ZPIC PIECEMEAL REQUISITION
vii. ZPRJ PROJECT REQUISITION
viii. ZREG REGULARIZING REQUISITON
ix. ZSER SERVICE REQUISITION
x. ZSUB SUB CONTRACTING REQUISITION

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xi. ZDIR RAW MATERIALS PR
xii. ZEXP EXPLOSIVES
xiii. ZMRP ARS ITEMS

4.1.2 GUIDELINES FOR RAISING PURCHASE REQUISITION (PR)

a) PR estimates are to be made on destination costs i.e., all-inclusive

basis, after considering freight, insurance, taxes etc. The eligibility of
Input Ta\x Credit & Net Price Implication also needs to be indicated in
the PR.
b) Signing of PRs: Only Officers are authorized to sign / e-sign / provide
online clearance for the PRs.

c) The Material Type (Capital, Raw materials, Spares, Consumables etc.)

for the items should be selected while raising the PR. The type of PR
(Document type) – Annual / Piecemeal / Regularizing etc. should also
be selected when raising the PR.

d) PR FOR PROPRIETARY ITEMS

Where procurement from a particular source or sources is
recommended adequate justification for recommending the particular
source is to be given along with the PR, supported by the proprietary
Article certificate wherever required, duly approved by the Competent
Authority Annexure- 4-I (P-215).
User dept shall furnish the details of efforts made for reverse
engineering to develop alternative sources.

e) Clear marketable specifications and / or full particulars must be given

with the PR. Specifications are to be properly checked by the
concerned User Department (Production, Service, Plant etc.) who will
be responsible for the correctness of the specifications.
PRs has to be tagged as GeM/ Proprietary/ Nomination in customer
data tab in SAP System.

f) As far as possible, there should be a separate PR for each

category of material, for example, electrical stores and mechanical
stores should not be combined in one PR form unless they are
proprietary items of one manufacturer. Normally PRs would be raised
according to code groups.

g) The estimated quantities in PRs should be in conformity with the

production targets, consumption pattern of last 3 years, new additions
of the equipment & removal of old equipment from the fleet. However,
for critical items such as conveyor belts, OTR tyres, TCRR bits etc. the
PRs are required to be made based on production targets for the
subsequent year. In case of any deviations, the specific justifications
are to be recorded on case-to-case basis.

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h) For procurement of Capital Equipment, the next 05 years plan
needs to be considered while generating PRs.
i) In case, it is required to place order on more than one source, the User
shall specify so in the PR giving the maximum number of suppliers/
contractors to be engaged, justifying the reasons for the same.

4.1.3 COMPLETENESS OF PURCHASE REQUISITION (PR)

a) The PR should be complete in all respects i.e., Generalized
Specifications and Scope of work, part number, description, quantity,
last purchase rate with orders and supplier reference/ estimated rate
along with warranty, PQC terms and conditions and drawings wherever
applicable and funds confirmation etc.

User department must clearly specify that, the Items covered in PR are
DIVISIBLE (OR) NON-DIVISIBLE in nature.
b) The check list giving/confirming various aspects required to be complied
which is also to be furnished while forwarding the PR/ Indent to HO.
Detailed steps may be referred at Clause No: 4.4.

c) Under the last purchase rate, the office raising the PR should give rate
of last purchase if any or budgetary offer price should be taken if the
item is being purchased for the first time.

4.2 PURCHASE REQUISITION (PR) ESTIMATE

The estimated cost in the indent is a vital element in various procurement
processes, approvals and establishing reasonableness of prices at the time
of evaluation of the bids. Therefore, it should be worked out in a realistic and
objective manner. The prevailing market price ascertained through a market
survey or budgetary quotations from prospective suppliers or published
catalogues/Maximum Retail Price (MRP) printed on the item is the main
source for establishing the estimated cost of items for which no historic data
is available. It may be noted that MRPs usually include significant margins
for distributors, wholesalers and retailers.

Estimates of procurement should be prepared with due diligence,

keeping in view inflation, technology changes, profit margins etc.

The PR estimate should be on FOR Destination Cost basis (Including all

taxes and duties) considering the following:
i) Basic Cost
ii) Packing & Forwarding Charges: 2%
iii) Freight: 2% upto 1000 Kms and 3% for beyond 1000 Kms.
iv) Insurance: 0.15%
v) GST at the prevailing rate

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Following guidelines are to be followed for estimate rate assessment:

4.2.1 Where Last Purchase Rate (LPR) Is available

i). LPR less than 3 years old may be used. Care may be taken to
ensure that LPR of same, similar, and nearly equivalent requirements
is considered. Basic Cost of LPR from Purchase Order of other projects
/ units of NMDC shall also be considered for PR estimate.

ii). Date of Purchase Order (PO)/ latest Price Amendment shall be the
reference date to be used for calculating the age of LPR.

iii). LPR may also be adjusted for foreign exchange fluctuation and for any
changes in taxes & duties to arrive at a revised PR estimate.

iv). In case the price of the item has increased or decreased significantly
from the last purchase, any evidence for the same shall be given and a
revised estimate based on such evidence shall be adopted for
establishing the reasonability of the offered price.

4.2.2 Where no LPR is available – Budgetary Quotes

The best way to get a fair assessment of costs is by obtaining budgetary

quotes from potential parties. Ideally, there should be three quotes.
Lowest Price among three quotes shall be taken as the PR/ Indent
estimate. However, there is need to have a time schedule for receipt of
quotes to ensure some timeframe for this activity. Thus:

i). An attempt should be made to obtain as many budgetary quotes as

possible from reputed/potential firms and a time of 14 (Fourteen) days
be indicated therefore. In the event of receipt of less than three
budgetary quotes, two extensions of up to 07 (Seven) days each
may be considered; and

ii). In the event of non-availability of three quotes within the two

extended periods, the estimates should be prepared on the basis of
the number of budgetary quote(s) received, which may even be one;
and where more than one budgetary quote is received, the estimate
should be framed on the Lowest budgetary quote.

4.2.3 For proprietary / Nomination procurement

In cases of procurement on proprietary/ Nomination for which no LPR is
available, the OEM/OES/OPM/ Authorised Dealer’s/ Distributor’s price
list / rates along with the applicable discounts shall be obtained for
preparing the estimates.

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4.2.4 For items covered under existing Rate / Running Contracts, Depot
/COLD agreements etc:
No cost estimation is necessary. Unit price as per the relevant agreement
ruling on the date that covers supply of the items shall be filled by the User
or auto adopted by ERP as PR Estimate.
4.2.5 Where no LPR is available – Cost Analysis:
Cost analysis based on costs of various components / raw materials of the item
by internal or external expert costing agencies provides a reliable estimate of
cost.

4.2.6 Where no LPR is available, and Cost Analysis is not feasible:

In such situations, a rough assessment of cost can be arrived at but should
be used with caution for evaluation of the reasonableness of bids:
i) Rough assessment from the price of the assembly/ machine of which
the item is a part or vice versa;
ii) Published catalogues/ Maximum Retail Price (MRP) printed on the items
is the main source for establishing the estimated cost of items. It may be
noted that MPRs usually include significant margins for distributors,
wholesalers, and retailers;

4.2.7 Updation of LPR Data:

LPR data can be supplemented with escalations to cater for inflation, price
increases of raw materials, labour, energy, statutory changes, price indices,
and so on, to make them usable in conditions prevailing currently.
In case of foreign currencies, the rate should be reduced to a common
denomination of Indian Rupees. Price indices can be obtained from the
following websites. Some may require prior free registration and some paid
subscription:
i) For price indices of indigenous items:
http://www.eaindustry.nic.in/home.asp.in (Ministry of Industry);
ii) For metals and other minerals: http://www.mmronline.com/ or
http://www.metalprices.com/index.asp or
http://www.asianmetal.com/;
iii) For price trends of nonferrous details; London Metal Exchange -
https://www.lme.com/ gives price trends of nonferrous details,
which often show volatile trends;
iv) Other useful sites: http://www.tradeintelligence.com/ and
http://www.cmie.com/ (Centre for Monitoring Indian Economy);
v) For price trends of different countries:
http://www.imf.org/external/pubs/ft/weo/2015/01/ (International
Monetary Fund) and
vi) For Organization /chambers of commerce such as the (Indian
Electrical and Electronics Manufacturer’s Association):
www.ieema.org

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4.2.8 All PR estimates shall be done on destination costs basis i.e.
All inclusive basis, after considering freight, insurance, taxes etc.
Appropriate loading may be done for packing and forwarding, freight,
incidentals, applicable taxes/ duties etc. to arrive at destination cost estimate
wherever applicable.

4.2.9 In case of capital equipment, User Department may consult HO Technical

Departments for estimates to be made judiciously based on the specifications
and scope of supply finalized. Approval of the revised estimates, if revised,
along with the budget provisions should also be made available along with the
indent / PR.

4.3 CLASSIFICATION OF PURCHASE REQUISITIONS (PRs)

There are 3 major kinds of PRs raised, based on the timing of the ident:
1) ANNUAL PR
2) PIECEMEAL PR
3) EMERGENCY PROCUREMENT PR

MC Section shall be responsible for processing the PRs raised by the User till
the PR is approved by Competent Authority and is sent to Purchase Section for
procurement action.

4.3.1 ANNUAL PR
Annual PR is raised for fulfilling the estimated annual requirement of the item.
Fixed period review cycle will be followed for arranging annual indents for
various groups of materials. For the purpose of raising Annual PRs, the
following calendar of dates will be followed by all Projects.
January to March: (a) POL
(b) Explosives,
(c) General Consumables stores
(d) Tyres & Tubes (other than OTR)
(e) Light Vehicle spares.

April to June: (a) All engines (b) Dozers

(c) Dumpers (d) Compressors
(e) Graders (f) Conveyor belt
(g) TCRR bits (h) OTR Tyres

July to September:: (a) OCSL Spares (Mech. & Elect),

(b) Manganese Steel Liners,
(c) Idlers and Pulleys
October to December: (a) Shovels
(b) Blast Hole Drills
(c) Core Drills
(d) Mobile Cranes
(e) Any other spares & consumables not covered in
the previous quarters.

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1) User raises Annual PR in line with section 4.1.1 to 4.2.8 above.

2) Material Control (MC) Section scrutinizes the PR for specifications,
drawings if any, and completeness of the PR.
3) PR is then reviewed by Project Indent Review Committee (in case
procurement at Projects) or Procurement Management Committee (in
case of Procurement at Head Office), if any. Quantity requested in the
PR, PR estimate, marketability of the specifications etc. shall be reviewed
before the PR is cleared by the committee.
4) PR cleared by the Committee is sent for financial concurrence and approval
for Competent Authority.
5) PR approved by Competent Authority is then sent to Purchase Section
for procurement action.

4.3.2 PIECEMEAL PR
Piecemeal PR is raised if an unforeseen requirement of the item arises, and
the requirement is not covered by the Annual PR. Efforts shall be made to
avoid Piecemeal PRs as far as possible.
1) User raises Piecemeal PR in line with section 4.1.1 to 4.2.8 above.
2) PR should be processed for in principle approval of Competent Authority.
3) Material Control Section scrutinizes the PR for completeness and
processes the PR for financial concurrence and approval of Competent
Authority.
4) PR approved by Competent Authority is then sent to Purchase Section
for procurement action.

A demand for goods shall not be divided into small quantities to make
piecemeal purchases to avoid the necessity of obtaining the sanction of higher
authorities required with reference to the estimated value of the total demand.

4.3.3 EMERGENCY PROCUREMENT PR

1) Emergency Procurement are defined as those Procurement, both capital
and revenue, which are needed to be taken up immediately to
a) Avoid mitigate loss of life / property or
b) Avoid loss due to fire or accident / or any other natural
calamities etc.
c) Avoid Stoppage of production.
2) Since Emergency Procurement cannot be anticipated during the plan
period, no specific budget sanction would be available for the same in
the Capital or Revenue Budget.

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3) In the eventuality of any such emergency event or mishap, the Head of

concerned Project / Unit of operation shall immediately take all
necessary action to mitigate the loss / casualty, based even on informal
communication to competent authority.

4) The Head of the Project / Unit shall thereafter issue an ‘Emergency

Certificate’ as per the format prescribed at Annexure 4-II (P-216)
5) For this purpose, the Head of the Unit may engage the appropriate
contractor or agency on Single Tender Basis and award the
Procurement on the basis of Letter of Acceptance with instruction to take
up the Procurement immediately. Regularizing Letter of Award of
Contract can be issued subsequently.
6) If the financial value of Procurement falls beyond the delegated powers
of HOP/HoU, he shall obtain ratification of the action taken by submitting
a Report covering the nature of emergency, extent of damage / loss
incurred, financial implications thereof, steps taken to mitigate the risk /
loss with financial, legal implications of the same along with the
‘Emergency Certificate’.
7) Even if the financial value of the Procurement falls within the delegated
powers of HOP/ HoU, he shall submit an Information Memorandum to
the concerned FD enclosing the ‘Emergency Certificate’.
8) No financial concurrence is required for executing emergency
Procurement.
9) Emergency PRs should be raised in ERP system clearly mention that it is
an ‘Emergency PR’. A new document type shall be created for
Emergency PRs in ERP system.

4.4 FORWARDING OF PRs FROM PROJECTS TO HO

In case of procurement from HO, Projects should forward all PRs (Capital as
well as Revenue items) directly to PC department for review of PRs after
obtaining finance concurrence and Administrative Approval of Head of the
Project. In such cases, flow of approved PRs from Projects / Units to HO shall
be as follows:
1) MM department at project shall send approved PRs directly to
Production Coordination (PC) Department at HO.
2) PC Department / Steel Department shall review the PRs for the
following.
a) In-principal approval /PR sanction
b) Complete / Generalized Technical Specification along with drawings (if
applicable)
c) For Capital Items, the approved budget reference details (AMR / DPR/
WBS S.No)

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d) Pre-Qualifying Conditions (PQC), wherever required
e) Pre-Bid Meeting, if required
f) Special terms, and conditions or any other details, which user department
wants to incorporate in tender enquiry.
3) After review of the PR, PC shall forward the PR (complete in all respects
including Finance Concurrence & Approval), of the respective projects to
MM department at HO for procurement action Annexure 4-III (P-217).

4.5 TECHNICAL SPECIFICATIONS (TS)

4.5.1 The development of adequate specifications is essential for efficient

purchasing and it is in the buyer's interest to render every assistance in
development of proper specifications. At the same time, the specification
should not be too rigid. Over specification may stifle competition. Flexibility is
preferred so that it is, open for competition and goods are capable of being
produced by many firms. It should be a generalized and marketable
specification, thus encouraging the competition among the suppliers.

4.5.2 It should be as simple as possible, consistent with exactness - simplicity

promotes clarity, unnecessary words, complicated sentences and repetition
should be avoided, and all possibilities of misunderstanding eliminated.
i). It should be linked wherever possible with an established standards thus
permitting standard goods to be supplied. It should provide for the supply
of materials of the correct quality, and to be good enough but not too
superficial, so that all requirements are fulfilled without incurring
unnecessary expenses.
ii). It must be reasonable in its tolerances as unnecessary exactness Is
expensive.
iii). It should be a fair specification thus encouraging the co-operation of the
suppliers.
iv). It should be complete and specific in all essentials and without loopholes,
which will permit evasion of its conditions and thus lead to unfair
competition.
v). A specification must be capable of being checked. It is useless, unless the
goods supplied can be checked against particulars specified. Therefore, it
is essential to mention methods of inspections that will determine the
acceptance or rejection. A properly drawn up and acceptable specification
thus become an instrument for controlling the quality of goods purchased.

a) Provides a level playing field and ensures the widest competition; and

b) Be unambiguous, precise, objective, functional, broad based/generic,

standardized (for items procured repeatedly) and measurable. TS
should be broad enough to avoid restrictions on workmanship,
materials and equipment commonly used in manufacturing similar
kinds of goods;

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c) Set out the required technical, qualitative and performance characteristics
to meet just the bare essential needs of the NMDC without including
superfluous and non-essential features, which may result in unwarranted
expenditure;
d) Comply with sustainability criteria and legal requirements of environment or
pollution control and other mandatory and statutory regulations, or internal
guidelines, if any, applicable to the goods to be purchased;

e) Should have emphasis on factors such as efficiency, optimum fuel/power

consumption, use of environmental-friendly materials, reduced noise and
emission levels, low maintenance cost, and so on.

4.5.3 ESSENTIAL TECHNICAL PARTICULARS

The essential technical particulars to be specified in the tender document shall

include the following to the extent applicable for a particular purchase:
a) Scope of supply and, also, end use of the required goods;
b) All essential technical, qualitative, functional, environmental and
performance characteristics and requirements (such as material
composition, physical, dimensions and tolerances, workmanship and
manufacturing process wherever applicable; test schedule; if any),
including guaranteed or acceptable maximum or minimum values, as
appropriate. Whenever necessary, the user may include an additional
format for guaranteed technical parameters (as an attachment to the bid
submission sheet), where the bidder shall provide detailed information on
such technical performance characteristics in reference to the
corresponding acceptable or guaranteed values;
c) Drawings
d) Requirement of the BIS mark, where applicable, mentioning all parameters
where such a specification provides options;
e) Requirement of an advance sample, if any, at the post contract stage
before bulk production.
f) Special requirements of preservation, packing and marking, if any;
g) Inspection procedure for goods ordered and criteria of conformity;
h) Requirements of special tests or type test certificate or type approval for
compliance of statutory requirements with reference to pollution, emission,
noise, if any;
i) Other additional work and/or related services required to achieve full
delivery/ completion, installation, commissioning, training, technical
support, aftersales service and Annual Maintenance Contract (AMC)
requirements, if any;
j) Warranty requirements;
k) Qualification criteria of the bidders, if any; and

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l) Any other aspects peculiar to the goods in question such as shelf life of the
equipment, and so on.

m) The specifications and technical details should be expressed with proper

clarity without any ambiguity or double meaning. Wherever necessary, the
written specifications should be supplemented with drawings for additional
clarity.
n) The specifications should be clearly mentioned with respect to height,
weight, length, volume, chemical formula, method of manufacture, part
numbers (if applicable), by performances etc.
o) The respective specification with minimum & maximum acceptable range
shall be indicated.

4.5.4 USE OF BRAND NAMES:

Except in case of proprietary purchase from a selected single source,
reference to brand names, catalogue numbers, particular make / model /
brand of product or other details that limit any materials or items to specific
manufacturer(s) should be avoided as far as possible.

4.5.5 STANDARDs & UNITs

a) Indian standards like BIS, BEE rating etc. may be preferred for defining
specifications. In cases where Indian standards are unavailable,
inadequate, or not applicable, international, or foreign standards such as
ISO, British standards, DIN, VDE etc., may be adopted.
b) Special requirements such as packing, marking, inspection etc. as
necessary for a particular end use may be specified in addition to standard
specifications.
c) If no widely known standards exist for a material, the specifications shall be
drawn in a generalized and broad-based manner.
d) All dimensions incorporated in the specifications shall normally be
indicated in SI units except due to some unavoidable reasons.

4.5.6 ORIGIN OF TECHNICAL SPECIFICATION (RESPONSIBILITY)

Technical Specifications are to be prepared by the User Departments
(Production, Service, Plant, Engineering, Investigation, Research &
Development Departments etc.). It is responsibility of User Department raising
the PR to ensure the correctness of the specifications before they are sent to
the Materials Management Department for processing it further.
Specifications should aim to procure the latest technology and avoid
procurement of obsolete goods.
Projects User Department may consult HO Technical Departments for
generalized specifications in case of capital equipment and other critical
equipment.

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i) It is to be ensured that the tender specifications are in line with

Budgetary Offer/ LPR considered for the estimation.

ii) All line items of PR should be covered in Budgetary Offer / Price

estimate.

4.6 TENDER SAMPLE

Specifications cannot be clearly defined for procurement of items where

respect of indeterminable parameters such as shade, feel, finish &
workmanship are involved. In such cases, samples may be required to be
approved for supplies of such items. However, a system of approving/
rejecting tender samples at the time of decision making is too subjective and is
not considered suitable, especially for items which have detailed specifications
in other aspects. The lack of competition in such cases is also likely to result in
award of contracts at high rates.

As per CVC guidelines, Government Departments/Organizations should

consider procurement of such items on the basis of detailed specifications. If
required, provision for submission of an advance sample by successful
bidder(s) may be stipulated for indeterminable parameters such as,
shade/tone, size, make-up, feel, finish, and workmanship, before giving
clearance for bulk production of the supply. Such a system would not only
avoid subjectivity at the tender decision stage but would also ensure healthy
competition among bidders and thus take care of quality aspect as well as
reasonableness of prices.

CVC’s OM: No.2EE-1-CTE-3 dt: 15.10.2003

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CHAPTER – 5

5. MODES OF PROCUREMENT

5.1 RESPONSIBILITIES OF PURCHASE SECTION

a) Scrutiny of PRs, specifications, drawings etc.

b) Clubbing of requirements for common equipments / items of different

projects / units (in case of corporate office and any other regional offices).

c) Processing of offer / quotations, evaluations of offers by Tender Scrutiny

Committee (TSC) and sending the purchase proposal to the approval of
Competent Authority in accordance with the Delegation of Powers (DoP).

d) Informing Imports Section regarding the imports, Coordination regarding

imports, obtaining authorizations etc. (Applicable in case of corporate
office).

e) Placing of the purchase order, issue of subsequent Amendment Letter

(A/L), and follow up with suppliers including obtaining Security Deposit /
Performance Bank Guarantee (PBG), pre-dispatch inspection, delivery of
items etc. as applicable.

f) Assisting in Import substitution & promotion of “Make in India” activities.

g) Arranging opening of letters of credit, foreign exchange payments etc., to

the suppliers wherever applicable.

h) Arranging documents required for clearance of consignments shipped via

sea and air and forwarding them to regional office /clearing agencies.

i) Arranging insurance coverage wherever necessary.

j) Reconciliation of ERP output regarding POs and PRs.

k) Follow up with supplier in case of shortage / damage / rejections of the

delivered items.

l) Comply with all relevant GoI guidelines issued from time to time.

5.1.1. Spares of Critical Assembly and Sub-Assembly pertaining to HEMM and OCSL
Plant may be procured on Proprietary / Rate Contract through OEM/ OPM and
LTE/ OTE basis (w.r.t PC dept circular)

PC dept Note No: PC & S/ Critical Spares/ 587/01 dt: 12.03.2024

(Annexure-5-I @ P- 218)

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5.2 MODES OF PROCUREMENT

The various modes of procurement that can be used in public procurement are:

5.2.1 PROCUREMENT THROUGH TENDERING

1) Open Tenders:
i) Open Tender Enquiry (OTE)
ii) Global Tender Enquiry (GTE)
2) Procurement through Selected Suppliers:
i) Limited Tender Enquiry (LTE)
3) Procurement through Single supplier:
i) Single Tender Enquiry (STE) with Proprietary Article Certificate (PAC)
ii) Single Tender Enquiry (STE) without PAC – On Nomination basis

5.2.2 PROCUREMENT WITHOUT CALLING TENDERS

1) Direct Procurement without Quotation/ Direct Purchase

2) Direct Procurement by Local Purchase Committee (LPC)
3) Direct Procurement by Express Purchase Committee (EPC)

Concerned Purchase Cell would seek approval of Competent Authority for the
mode of tendering i.e., Limited/ Open / Global Tenders.

In the case of single tender enquiry on proprietary (PAC) / nomination basis

(Without PAC), LPC & EPC, User Department has to obtain Prior approval of
Competent Authority before sending file to MM Dept.

MM dept shall take up the procurement action based on the extant DoP for the
respective mode of purchase.

All the procurements of Goods and Services should be processed through GeM
Portal / e-Procurement platform (SRM). However, with specific approval of
Competent Authority (based on detailed justification & reasoning) other modes
of tendering may be taken up.

5.2.3 EMERGENCY PURCHASE

Emergency purchase will be processed on emergency indents raised with
Emergency certificate as discussed in clause 4.3.3 However, in cases of
where the nature of emergency is such that procurement action cannot wait for
formal indent, purchase may be initiated against PR and written consent for the
same (via letter / email) of competent authority.

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5.3 OPEN TENDER ENQUIRY (OTE)

In OTE, an attempt is made to attract the widest possible competition by publishing

the NIT simultaneously on the designated websites. This is the default mode of
procurement and gives the best value for money but the procedure is relatively
complex and prolonged. The systemic cost of this procedure may be high enough
to be unviable for smaller value Procurements.

5.3.1 OTE procedures through e-Procurement or through traditional tendering

should be adopted in the following situations:

i) All common use requirements with clear technical specifications

ii) For requirements that are ordinarily available in the open market but is
necessary to evaluate competitive offers to decide the most suitable and
economical option available
iii) When requirements are not available from know sources or sources are
presently limited and need to be broad based.
iv) Sources of supply are not clearly known
v) Known suppliers are suspected to have formed a cartel / ring
vi) First time procurement

5.3.2 OTE Terms and Conditions:

i) Bidders already registered are also free to participate.
ii) Advertisement in such cases should be given on Central Public Procurement
Portal (GeM-CPPP) at www.eprocure.gov.in.
iii) An Organisation having its own website should also publish all its advertised
tender enquiries on the website. i.e. at www.nmdc.co.in.

iv) The availability for downloading of tender documents against NIT should not
be restricted and should be available freely. Tender documents should
preferable be available for download up to the closing date of tender.

NIT/ Tender should be processed through GeM/ NMDC SRM/ e-Procurement

portal and published/ displayed on GeM-CPP Portal & NMDC website.

Addendum / corrigendum / extension of Bid Submission / Bid Opening Date if any

shall also be published on the above mentioned sites only. Therefore, a clause to
this effect should be inserted in the NIT.

NIT/Tender details should be intimated to vendors (in particular past successful

vendors and vendors from whom budgetary offers are received) by e-Mail.

For OTE the minimum time limit should be kept 21 days from the date of
publication of the tender. In case of Urgency, these time limit may be reduced with
the approval of Competent Authority.

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5.4 GLOBAL TENDER ENQUIRY (GTE)

GTE is similar to OTE but, through appropriate advertising and provision for
payment in Foreign Currencies through Letter of Credit, it is aimed at inviting the
participation of interalia foreign firms.
The point of balance between VfM and cost/ complexity of procedure is further
aggravated as compared to OTE.

5.4.1 Development of local industry also needs to be kept in mind. Hence, it may
be viable only in following situations:

i) Where Goods of required specifications/ quality are not available within the
country and alternatives available in the country are not suitable for the
purpose.
ii) Non-existence of a local branch of the global principal of the manufacturer/
vendors/ contractors.
iii) Requirement for compliance to specific international standards in technical
specifications.
iv) Absence of a sufficient number of competent domestic bidders likely to
comply with the required technical specifications, and in case of suspected
cartel formation among indigenous bidders.
v) PR estimate value > Rs. 200 Crores

5.4.2 GTE Terms and Conditions:

i) Bidders already registered are also free to participate.

ii) Advertisement in such cases should be given on Central Public Procurement
Portal (GeM-CPPP) at www.eprocure.gov.in.
iii) An Organisation having its own website should also publish all its advertised
tender enquiries on the website. i.e. at www.nmdc.co.in.
iv) The availability for downloading of tender documents against NIT should not
be restricted and should be available freely. Tender documents should
preferable be available for download up to the closing date of tender.

v) GTE tender documents must be in English and the price should be asked in
Indian Rupees or US Dollars or Euros or Pound Sterling or Yen or in
currencies under the Reserve Bank of India’s notified basket of currencies.
vi) GTE tender documents must contain technical specifications which are in
accordance with national requirements or else based on an international
trade standard.
vii) Relevant INCOTERMS should be included in the tender.

NIT/ Tender should be processed through GeM/ NMDC SRM/ e-Procurement

portal and published/ displayed on GeM-CPP Portal & NMDC website.

Addendum / corrigendum / extension of Bid Submission / Bid Opening Date if any

shall also be published on the above mentioned sites only. Therefore, a clause to
this effect should be inserted in the NIT.

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NIT/Tender details should be intimated to vendors (in particular past successful

vendors and vendors from whom budgetary offers are received) by e-Mail.

Time Limit:

For GTE, the minimum time limit should be kept 28 days from the date of publication of
the tender.

In case of Urgency, these time limit may be reduced with the approval of
Competent Authority.

5.4.3 No Global Tender Enquiry (GTE) upto Rs. 200 Cores shall be invited or such
limit as may be prescribed by the Department of Expenditure from time to time.

In exceptional cases where NMDC feels that there are special reasons for
inviting GTE, for tenders below such limit, it may record its detailed justification
and seek prior approval for relaxation from the Competent Authority specified
by the Department of Expenditure.

5.4.4 Exemptions/ Clarifications:

1) For Procurement of specialized equipments required for research purposes,

and spares and consumables, for such equipments up to Rs. 200 Crore for
the use of Educational and Research Institutes, Secretary of Ministry/
Department concerned shall be the competent authority to approve issue of
Global Tender Enquiries for such requirements subject to fulfilment of
conditions.

2) On Procurement of spare parts of the equipments/ Plants & Machinery etc.

on nomination basis from Original Equipments Manufacturers (OEMs) or
Original Equipment Supplies (OES) or Original Part Manufacturers (OPMs)
as no competitive tenders are invited in such cases.

3) On Procurement of services like Annual Maintenance Contract (AMC) and

auxiliary/ add-on components for existing equipments/ Pant & Machinery
etc., which are procured from OEM/OES/OPM on nomination basis, as no
competitive tenders are invited in such cases.

i) OM No: 4/1/2021-PPD issued by DOE dt: 11.06.2021

ii) OM No. 12/17/2029-PPD issued by DOE dt: 29.10.2020
iii) OM No. F.4/1/2021-PPDD issued by DOE dt: 01.09.2021

Further, whenever GTE mode of Tendering is resorted to all the applicable

guidelines issued by DoE/ GoI from time to time shall also be complied with.

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5.5 LIMITED TENDER ENQUIRY (LTE)
Limited Tender Enquiry should be resorted to in any of the following cases:
Limited/ Restricted tenders are invited by issuing enquiries to a selected
number of firms. This should be adopted only in exceptional cases when items
are critical in nature/ the demand is very urgent and there are reasons to
believe that chosen mode for enquiry would fully meet with the situation with
due regard to the economy and dependability. The firms to be addressed would
be got approved before issue of enquiry.
i). Considering the criticality of items like Conveyor Belts, Crusher Spares,
Explosives, HSD, MS-Petrol, Trailing Cables, HT Panels etc. materials may
be procured only from NMDC’s established sources.
ii). There are sufficient reasons, to be recorded in writing by the User dept.,
indicating that it will not be in public interest to procure the goods through
Open / Global tender enquiry.
iii). Tender/NIT details must be intimated to all vendors of NIT by e-mail.

iv). NIT/Bid documents should be sent directly by GeM/ e-Procurement portal/e-

Mail to firms which are on the list of registered suppliers for the goods. The
minimum number of bidders to whom LTE should be sent is more than
three. However, this may vary depending upon the established sources on
case to case basis and limited tender enquiry may be floated to less than 03
firms with justifications recorded and approval of Competent Authority.
v). Limited Tender Enquiry should be sent to the firms for the item(s) / category
and relevant to the project for which procurement is done (where
categorization has been done) with the approval of Competent Authority as
per extant DoP. In exceptional cases, enquiries may also be sent to others
who are not on the established firms list, but are suitable after recording
proper justification and approval of Competent Authority.

vi). Sufficient time should be allowed for submission of bids in Limited Tender
Enquiry cases, which should not be less than 14 days (unless specifically
mandated otherwise) from the date of publication. However, in case of
Urgency, the time limit may be reduced with the approval of Competent
Authority.
vii). Restricted tenders are invited by issuing enquiries to a selected number of
firms out of the registered list of suppliers for the class of goods required.
viii). This method should be adopted only in exceptional cases where the
demand is urgent/ for critical nature items and there are reasons to believe
that chosen mode for enquiry would fully meet with the situation with due
regard to the economy and dependability.
NIT/ Tender should be processed through GeM/ NMDC SRM/ e-
Procurement portal and published/ displayed on GeM-CPP Portal & NMDC
website.

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5.6 SINGLE TENDER WITH PROPRIETARY ARTICLE CERTIFICATE (PAC)

Single Tender enquiry may be adopted for procurement of Proprietary items.

This mode may be adopted for any of the following cases:
i). In procurement of goods, certain items are procured only from Original
Equipment Manufacturer (OEM)/ Original Parts Manufacturer (OPM)/
OES (or) manufacturer having proprietary rights (or) their authorized
dealers/ stockists against PAC certificate.
ii). On manufacturer’s recommendation until other proper sources are
located.
iii). During warranty & performance guarantee period as per contractual
terms.
iv). All above cases shall have a proprietary Article certificate duly signed
by User Department and approved by Competent Authority. Annexure-
4-I (P-215).
v). Proprietary Article Certificate (PAC) should be attached along with
Purchase Requisition in ERP system.
vi). Price fall clause should be incorporated in all STEs.
vii). References may be sought from STE supplier regarding past orders for
similar items, to establish the reasonability of the offered rates.
viii). Further, the User Department shall identify & list out the proprietary items
/ spares required for the equipment & obtain the Competent Authority’s
Approval on receipt of new equipments.
ix). In case there is more than one dealer/ partner authorized to sell a
particular proprietary item, discount may be possible through Limited
Tender Enquiry.
x). Therefore, Limited Tender Enquiry may be issued to the authorized
dealers / partners. However, such procurement shall also require
Proprietary Article Certificate duly signed by User Department and
approved by Competent Authority.

Sufficient time should be allowed for submission of bids in STE cases, which
should not be less than 10 days. However, in case of Urgency, the time limit
may be reduced with the approval of Competent Authority.

NIT/ Tender should be processed through GeM/ NMDC SRM/ e-Procurement

portal. STE NIT & Award of Contract should be published/ displayed on GeM-
CPP Portal & NMDC website.

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5.7 SINGLE TENDER WITHOUT PROPRIETARY ARTICLE CERTIFICATE (ON

NOMINATION BASIS)
Procurement from a particular source though other sources are available. This
may be adopted in any of the following situations. Detailed justification for
purchasing the items from a particular source shall be recorded.

i) In a case of existing (or) prospective emergency relating to operational or

technical requirements to be certified by the indenter, the required goods
are necessarily to be purchased from a particular source subject to the
reason for such decision being recorded and approved by competent
authority.
ii) For standardization of machinery or components or spare parts to be
compatible to the existing sets of machinery/equipment (on the advice of
a competent technical expert (user dept) and approved by the competent
authority), the required goods are to be purchased only from a selected
firm.
iii) During natural calamities and emergencies declared by the Government.
iv) During extreme emergencies / exigencies and procurement through
normal tendering process may lead to loss of life / property or lead to
operational breakdown and loss of production.
v) Above situations are indicative and not exhaustive
vi) Price fall clause should be incorporated in all STEs.
vii) References may be sought from STE supplier regarding past orders for
similar items, to establish the reasonability of the offered rates.
Sufficient time should be allowed for submission of bids in Single Tender Enquiry
cases, which should not be less than 10 days. However, in case of Urgency, the
time limit may be reduced with the approval of Competent Authority.

NIT/ Tender should be processed through GeM/ NMDC SRM/ e-Procurement

portal. STE NIT & Award of Contract should be published/ displayed on GeM-
CPP Portal & NMDC website.

5.7.1 Price fall clause should be incorporated in the all Single Tender Enquiry -
STE (Proprietary / Nomination). i.e.

The price charged for the stores supplied under the contract shall in no event
exceed the lowest price at which the stores of identical description are sold to
any other Government department/ Public Sector/ Private Organizations
during the period of the contract. if the sale price is reduced to lower than that
chargeable under the contract, such reduction shall forthwith be notified to the
direct dealing officer (DDO) and stores supplied after the date of coming into
force, such reduction or sale, shall be correspondingly reduced.

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The firm shall also certify on each bill as follows:

“We certify that the stores of description identical to the stores supplied under the
contract herein have not been sold by us to Government department/ Public Sector/
Private Organizations during the period under contract at a price lower than the price
charged to NMDC under this contract.”

PROCUREMENT WITHOUT CALLING TENDERS

1) Direct Procurement without Quotation / Direct Purchase
2) Direct Procurement by Local Purchase Committee (LPC)
3) Direct Procurement by Express Purchase Committee (EPC)

5.8 PURCHASE OF GOODS WITHOUT QUOTATION/ DIRECT PURCHASE

a) Purchase of goods/services up to the value of Rs.50,000/- only on each
occasion may be made without inviting quotations / bids on the basis of the
certificates recorded by the User (HoD) for the goods purchased from the
specific supplier as below: -
“I, am personally satisfied that these goods purchased are
of the requisite quality and specification and have been purchased from a
reliable supplier at a reasonable price”

Administrative approval of Head of Project (HOP) is necessary for purchase

of goods without quotation.
b) Items, parts / components etc., required for running of systems / sub
systems / equipment, day to day office management etc. upto value of
Rs.50,000/- shall be allowed under Purchase of Goods without Quotation.

c) Purchase of goods without quotation shall be allowed only for items that are
not regularly purchased and/or not generally included in the annual
Purchase Requisitions / materials budget. However, in case of urgent
requirements, such items shall also be allowed to be purchased under this
method.

d) Direct Purchase should be done through GeM Portal. However, Purchase

of goods without quotation shall be resorted to only in case the item of
required specifications is not available in GeM (GeMAR & PTS) or in cases
where the requirement is urgent and the delivery period for procurement
through GeM is not acceptable and same should be recorded.

e) Above purchase will be made with an annual limit of Rs. 05 Lakhs per
Project/ Unit for which proper record will be maintained by the concerned
project / unit.
f) After the Purchase of Goods without Quotation, a regularizing Purchase
Order (PO) should be raised by User in the ERP system (against Purchase
group COM) and Goods Receipt Note (GRN) should be generated by
Receipt Section at Stores once the goods are received.

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g) Payment for such purchases is made in any of the following 2 methods:
i) Payment is made to the User department as advance before the
purchase of goods and settlement of advance is processed after the
regularizing PO and the corresponding GRN are raised.
ii) User purchases the goods from the supplier on credit basis. Payment is
made by Finance Department to the supplier directly against the
Regularizing PO and GRN.
h) Periodic report of the total value of Purchase of Goods without Quotation
by each Project / Unit shall be generated from ERP system and reviewed
by HO.

5.9 PURCHASE OF GOODS BY LOCAL PURCHASE COMMITTEE (LPC)

Normally, all local purchases should be routed through MM Wing. But in urgent
cases, however, Head of user Department/ their authorized representative may
also go in for local purchases.
Local purchase can be made for low value spares / stores / medicines / medical
consumables. However, Purchase of Capital items like Furniture, Computers,
Electronic Gadgets etc. are to be avoided under local Purchase.

Local Purchase through Committee shall be taken up when a certain item(s) is

not available on the GeM portal (of required specification or within required
delivery period etc.). However, it is mandatory for a user to generate a “GeM
Availability Report and Past Transaction Summary” (GeMAR &PTS) with a
unique ID on GeM portal using his login credentials on GeM for procurement
outside GeM.
Local purchase can be made for total estimated value upto Rs.05 Lakhs
on each occasion for the case of HO, Projects, and Units with the approval
of HoD(HO), HoP, HoU.
Local purchases would be made only by a team of officers comprising of one
each from user, Finance and MM Departments of appropriate levels as decided
by the concerned HoD.
i). LPC TERMS AND CONDITIONS
a) In case of emergency procurement, facility of withdrawing requisite
advance amount and its subsequent accountal may also be considered.
b) This is intended to be fast track, simple mode of procurement. The
committee will survey the market to ascertain the reasonableness of
rate, quality and specifications and identify the appropriate supplier.
c) Selection of suitable product and supplier by actual market survey (not
by calling of tenders like a mini LTE) is of essence of this mode.

d) In larger cities, the presence of reputed shopping malls may also be

included in the market survey. Reputed internet shopping portals may
also be explored.

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ii). PROCEDURE FOR PURCHASE OF GOODS BY LOCAL PURCHASE
COMMITTEE (LPC) IS AS FOLLOWS:

a) PR is raised by the User for local purchase.

b) Local purchase PRs should be vetted by Finance and then sent for
approval of C/A, who shall approve a Local Purchase Committee (LPC)
with one officer each from User, Finance and MM Department.

c) LPC shall survey the market to ascertain the reasonableness of rate,

quality and specifications and identify the appropriate supplier.

d) No further financial concurrence is envisaged for local purchase and

committee can place order directly to the firm or issue LoA.

e) After seeking approval of Competent Authority on post facto basis, MM

Department raises a regularizing Purchase Order (PO) in the ERP
system (LPC should be selected in ERP system when generating PO
from ERP system).

iii). Payment for such purchases is made in any of the following 2

methods:
a) Payment is made to the User department as advance before the
purchase of goods and settlement of advance is processed after the
regularizing PO and the corresponding GRN are raised.
b) User purchases the goods from the supplier on credit basis. Payment is
made by Finance Department to the supplier directly against the
Regularizing PO and GRN.

iv). As recommended in Rule 155 of GFR rules 2017, before recommending/

placement of local purchase order, the members of the committee will jointly
record a certificate as under:

“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 NMDC”

v). Periodic report of the total value of Purchase of Goods by Local Purchase
Committee by each Project / Unit shall be generated from ERP system and
reviewed by HO.

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5.10 EXPRESS PURCHASE COMMITTEE (EPC)

a) Procurement of:
i). Items having aesthetic value like arts and crafts, paintings, furniture,
furnishings, decorative items, bed linens, curtains, crockery, cutlery,
hospitality items, household items for places like Guest Houses, Canteens,
Reception, Corridors, Conference/ Training Halls, Official Residences /
Bungalows, Kitchens etc.
ii). Gifts and items for corporate use, official functions,
iii). Sundry items such as sports items, Uniforms etc.
May be made through Express Purchase Committee (EPC) as the purchase of
these items cannot be made effectively through normal tendering process. The
Express Purchase Committee (EPC) would consist of representatives from MM,
Finance & User/ Administration Departments. Constitution of the above
committee and mode of procurement through EPC will be approved by CA as per
extant DoP.

b) EPC will visit known showrooms / dealers in the vicinity of procurement

entity (not farther than nearest metro city) to identify the item(s) and
vendor(s) meeting the requirement and issue a written letter/ NIT
containing scope of supply/ specifications and main terms and conditions
like payment, warranty/ guarantee if any, delivery, validity of offer, etc. In
larger cities, the presence of reputed shopping malls may also be included
in the market survey. In such cases EMD and SD will not be applicable.
The vendor(s) will be asked to submit sealed quotation for the identified
products on the spot or later upto a specified date and time. These
quotations will be opened by the EPC at the pre-disclosed time and venue
inviting the participating bidders who choose to attend. Thereafter, the
offers will be scrutinized by the EPC and recommendations will be made
to the competent authority for placement of order. The LoA will be signed
by the committee. The concerned user department which has initiated the
requirement will retain the file for any future reference. After seeking
approval of Competent Authority on post facto basis, MM Department
raises a regularizing Purchase Order (PO) in the ERP system (EPC should
be selected in ERP system when generating PO from ERP system).
c) As recommended in Rule 155 of GFR rules 2017, before recommending/
placement of Express purchase order, the members of the committee will
jointly record a certificate as under:
“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 NMDC”

d) Delegation of Powers for EPC:

1) Rs. 10 Lakhs – HOD(HO)/ HOP
2) Full Power – FD at HO.

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5.11 EMERGENCY PURCHASE POLICY

Emergency purchase will be processed on emergency indents raised with
Emergency certificate as discussed in clause 4.3.3 However, in cases of
where the nature of emergency is such that procurement action cannot wait
for formal indent, purchase may be initiated against PR and written consent
for the same (via letter / email) of competent authority.
5.11.1 Emergency need of low value items may be fulfilled by purchase without
quotation /Local purchase committee / Express Purchase Committee
wherever applicable.

5.11.2 For emergency needs of items covered under Depot agreements, User
Department may intimate its requirement to the Depot holder directly and
send the covering PR to MM Department subsequently along with the
approval of Competent Authority and the regularizing purchase order would
be placed by the concerned Purchase Officer.

5.11.3 In cases of emergency, project sites can request for transfer of spares or
capital equipment in obsolete with other projects of NMDC with approval of
Competent Authority as per extant DoP.
5.11.4 Procurement of items can be made on Single tender basis i.e. from single
source though other sources are available in case of extreme emergency /
exigencies. In such cases detailed justification for purchasing the items from
single source shall be recorded with approval of competent authority.

5.11.5 Limited tenders may also be issued in case of emergencies with due date of
tender opening shortened as per requirement with the approval of competent
authority and tender shall be finalized with received offers.

5.11.6 Password protected e-Mail tenders may be issued only for emergency
purchase. Competent Authority approval as per Delegation of Powers (DoP)
shall be taken for issuing tender through e-mail / receipt of offers through e-
mail with proper justification. However, for STE (Nomination/ Proprietary)
password protection is not applicable.
The e-mail ID (specifically dedicated to receiving email offers (or) Dealing
Officer’s NMDC e-mail ID) to which the offer shall be sent is to be clearly
mentioned in the NIT/tender.
Access for this e-mail ID shall be with Dealing Officer of MM Department /
Officers as decided by HoD (Materials). Both technical bid & price bid shall
be submitted by e-mail as the case may be (single bid / two-bid) to the e-mail
ID as mentioned in the NIT/tender.
In case of two bid system, both price bid and technical bid shall be in
standard formats (Adobe pdf / Word) and shall be placed in different folders.
The two folders, one for technical bid and one for price bid, both individually
password protected with different passwords, shall be zipped using WinZip
utility and the single Zipper file should be sent as attachment on the
designated email in NIT / tender.

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It shall be stipulated clearly in the NIT / tender that NMDC is not responsible
for any delay / technical glitch in submission of offers through email. Only the
time of receipt of e-mail containing the offer shall be considered to decide if
the offer submission is late or not.

SHARING OF PASSWORD: The password should be sent to another email

ID (specifically dedicated to receiving passwords for email offers), which shall
be accessed only by HOD (MM) (or) TOC/TSC member from Finance dept.
The designated e-mail ID for sharing of password shall also be clearly
mentioned in the NIT / Tender.

In case of two bid system, the password for bid shall be shared after closing
time of submission as mentioned in NIT/ Tender.

In case of two bid system, password for opening of technical bids shall be
shared to the designated e-mail ID after closing time of submission as
mentioned in the NIT/ tender. The date of opening of price bid will be
communicated only to the technically acceptable firms and password for
opening of price bid shall be requested from those qualified Bidders. Password
for opening price bids should also be shared to the designated email ID for
receiving passwords.

In all above cases, the opening of technical / price bids shall be done by a
tender opening committee with representatives from MM Department and
Finance Department.

NOTE:
Emergency Purchase may be processed through NMDC SRM Portal (e-
Procurement portal).
Statement of emergency purchases made shall be reviewed periodically.

5.12 REPEAT ORDER

Repeat Orders shall be avoided normally. These are to be placed more as an
exception rather than as a rule, only in cases where it is commercially
beneficial. Repeat orders may be placed if the demand is urgent and in case
tendering may not only delay purchase but may also invite higher prices.
CONDITIONS GOVERNING THE PLACEMENT OF A REPEAT ORDER
a) Subject to provisions in approved budget.
b) Approval by original approving authority subject to total value of
procurement including additional quantity falling within the delegated
powers of such authority.
c) Repeat order can be placed within 6 months from date of original
order for upto 50% of original quantity, based on certification from User
Department that prices are not on a decline.

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d) Original order should have been placed based on competitive bidding
(OTE/LTE) with minimum three valid offers.
e) Repeat order is to be approved by the same authority who has approved
the original order provided consolidated value falls within his powers.
f) Sister projects can also avail of the provision subject to NOC from the
project placing the original order and overall coordination.
g) Repeat Order option may be checked in GeM portal. If not, offline order
option may be chosen and same must be recorded in proposal for
approval of C/A.

5.13 RATE CONTRACTS AND RUNNING CONTRACTS

If there is any existing NMDC Rate Contract for the materials required, it
should be obtained through Rate Contract. However, if the delivery period
offered under the rate contract is not suitable or due to any other reasons, with
the specific approval of the competent authority, independent purchase action
may be taken as per procedure. Normally, the items covered by NMDC Rate
Contracts would be ordered directly by the project concerned.

5.13.1 RATE CONTRACT

A Rate Contract (commonly known as RC) is an agreement between the
purchaser and the vendor for supply of specified spares at specified price and
terms & conditions (as incorporated in the agreement) during the period
covered by the Rate Contract. Neither any quantity is mentioned nor any
minimum drawl is guaranteed.

5.13.2 RUNNING CONTRACT

As against a rate contract, a Running contract is a contract for supply of an
approximate quantity of stores at a specified price for a certain period. During
this period, requisitions are placed on the supplier to supply specified
quantities (out of the total allocated quantity at different points of time as per
the requirement). The purchaser shall have the right to take certain quantity
(upto 30%) over or below the approx. quantity mentioned in the contract.
Running contract is preferrable for those fast-moving consumables and spares
for which the quantity requirement is reasonably certain. Advantage of
Running Contract over Rate Contract is that, with Running Contracts, it is
possible to get lower prices since the purchaser promises a minimum volume
offtake and the prospective suppliers would build volume discounts in their bid.
Orders against these contracts have to be carefully watched and the minimum
quantity promised to the supplier in the contract shall be taken before the
expiry of the contract.
In view of Government e-Marketplace (GeM) coming into operation, Rate
Contract/Running Contract is not required to be executed for common use
items like computers, printers, photocopiers, paper and stationary, other office
items like furniture, bottled water etc., which are being placed on GeM and will
now be applicable only for specialized and engineering items which are not
available on GeM, and are identified as common use items and are needed on
recurring basis by various Departments.

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5.13.3 FINALIZATION OF RATE / RUNNING CONTRACT

For items for which there is likely recurring demand as seen from past
experience and whose purchase value is less than Rs.20 Lakhs per unit,
NMDC may enter into Rate / Running Contract with the proven sources /
OEMs, Authorized Distributors / Dealers of manufacturers by calling tenders.
Corporate office would circulate lists of valid Rate / Running Contracts to all
projects on annual basis as soon as a new Rate / Running Contract is
finalized. Projects shall process & conclude Rate / Running Contract for
supply of spares for Light & Heavy Vehicles, Medicines and Transportation
.
5.13.4
5.12.3
VALIDITY OF RATE / RUNNING CONTRACT
5.13.4.1 For Rate / Running Contracts with OEMs / Authorized dealers for proprietary
items, the contract tenure shall be for 5 years initially. Such contracts may be
renewed for another 5 years with mutual consent of NMDC and the contract
holder. Maximum of 01 price revision per annum shall be allowed during the
currency of the contract. No further extension shall be allowed and fresh RC
has to be processed with due procedure well in advance.
5.13.4.2 For Rate / Running Contracts concluded against a Limited / Open / Global
tender, the contract tenure shall not be for a period more than 2 or 3 years
as decided on case to case basis with approval of Competent Authority. No
price revision is allowed during the currency of the contract. Such Rate /
Running Contracts may be extended for a maximum of 1 year with mutual
consent of NMDC and contract holder. No further extension shall be allowed
and fresh RC has to be processed with due procedure well in advance.
5.13.4.3 Price revision for Rate / Running contracts, wherever applicable, is subject to
financial concurrence and acceptance by Competent Authority. If revised
price quoted by supplier has high escalation, supplier shall be asked to
submit a justification for the same which may include purchase orders / bills
indicating the supply of same material to other organizations at the revised
rate, documentary evidence for escalation of raw material price or any other
cost component, if any. Counter offer of revised price may be submitted to
the supplier and the Rate / Running Contract may be discontinued if the
counter offer is rejected.
5.13.4.4 In case of Rate / Running Contracts for items like explosives and blast
accessories, the contracts typically have a price variation / escalation clause.
In such cases, price changes shall be governed by the corresponding clause
of the contract.
5.13.4.5 It should be ensured that new Rate / Running Contracts are made operative
immediately after the expiry of the existing Rate / Running Contracts without
any gap. Positions of Rate / Running Contracts are to be reviewed on
monthly basis at Head office/ Projects and necessary actions are to be taken
either for extension / renewal or for fresh rate contracts. Projects are required
to forward anticipated off takes and performance so that extension / renewal
of the Rate / Running Contracts or fresh contracts can be processed on
regular basis.

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5.13.5 PRICE FALL CLAUSE
The price charged for the stores supplied under the contract shall in no event
exceed the lowest price at which the stores of identical description are sold to
any other Government Department / Public Sector/ Private Organizations
during the period of the contract. If the sale price is reduced to lower than
that chargeable under the contract, such reduction shall forthwith be notified
to the Direct Dealing Officer (DDO) and the new lower price will then apply to
all future deliveries under the contract.
The firm shall also certify on each bill as follows:
“We certify that the stores of description identical to the stores supplied under the
contract herein have not been sold by us to any other Government Department /
Public Sector/ Private Organizations during the period under contract at a price
lower than the price charged to NMDC under this contract.”

In case of parallel Rate / Running Contracts against a tender, if the price is reduced
by any supplier due to invocation of ‘Price Fall’ clause by one supplier, the same
lower price shall also be applicable to other suppliers under the parallel Rate /
Running Contract.

5.13.6 NEGOTIATION / COUNTER OFFER UNDER RATE/ RUNNING CONTRACT

Post tender negotiations should be avoided, and the rate contracts may be
concluded without negotiations with L1 party as far as possible. In cases
where the price of L1 is not acceptable, NMDC may in the first instance
negotiate with L1 only for arriving at a reasonable/ acceptable price. On
successful conclusion of negotiations with L1, Rate / Running Contract may
be awarded to the L1 at the agreed negotiated price and the same may be
counter offered to all the other higher quoting firms. Parallel Rate / Running
Contracts may be concluded with those who accept the counter offered rates.
Rate / Running Contracts may also be entered with different rates for some
categories of essential cases like accessories for explosives. Relevant
justification on case-to-case basis and approval of Competent Authority shall
be taken.
5.13.7 PLACING ORDER ON RATE / RUNNING CONTRACT

The items covered by NMDC Rate / Running Contracts shall be ordered

directly by the project concerned. But in the emergency cases, even the user
department can intimate its requirement to the firm under RC directly and
send the covering PR to MM department. PR shall be raised on ERP system
by User Department for purchase of items under the contract. PR should be
vetted by Finance.
Parallel RC would also be entered into to ensure competition and multiple
sources of supply to avoid any eventualities for non-supply of one RC
supplier.
Corresponding Rate / Running Contract shall be selected when raising the
PR. Direct Dealing officer from Purchase department of MM team at project
sites shall review the PR and issue the Release Order as per extant
Delegation of Powers (DoP) to the supplier holding the contract.

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5.14 EXPLOSIVES RATE / RUNNING CONTRACTS

5.14.1 Corporate office shall enter into the Rate / Running Contracts for supply of
Explosives and accessories. The price variation clause as per the formula
fixed shall be taken for reference purpose while deciding the price for the
further specified periods during the contract.
As per price variation clause, Project MM Dept will calculate the revised price
of explosives and accessories every quarter and make the payment
accordingly.

5.14.2 METHODOLOGY FOR CONDUCTING TRIALS FOR PRIMARY BLASTING &

ACCESSORIES:

A) PRIMARY BLASTING (SME / CARTRIDGE):

TRIAL QUANTITY:
1. FOR SME: 100T FIXED FOR EACH PROJECT.

2. FOR CARTRIDGE EXPLOSIVES:

i) Bailadila Sector: 05 Tons
ii) Donimalai Project: 50 Tons
iii) Panna Project: 10 Tons

I) Trial of one vendor at a time within the quantity sealing shall be conducted.
II) Total number of trials of one vendor shall be limited to 3 in the following
stages:
a) First stage trial shall be conducted in soft strata in 1 or more number
of blasts.
b) If in first stage the performance of the product is satisfactory then
second stage trial shall be conducted in medium hard/ hard strata in
1 or more number of blasts.
c) If in second stage the performance of the product is satisfactory then
third stage trials shall be conducted in very hard strata in 1 or more
number of blasts and if performance is found to be satisfactory then
such product should be treated as established for regular use.
d) Trials in hard and very hard strata to be made using preferably 50%
of the total trial quantity. However, the quantity to be used at various
stages will be decided by the Project Management and may vary
subject to prevailing conditions in the project.
III) During trial of the explosive in each stage, performance will be evaluated
against the parameters by user department in the established format.

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S.No Characteristics Desired Result Actual Remark
Result
1 VOD (m/s) 4500 +/- 500
2 Density (gm/cc) 1.15 to 1.25
3 PF (T/Kg) Project Specific
4 Fragmentation Satisfactory.
However, the consumption of
explosives during secondary blast
to deal with boulders, generated
during primary blast, should not
be more than 2%.
5 Throw 10-20 Mtrs (Depending up on
strata, up to 10 Mtrs in soft & up
to 20 Mtrs in MH/H/VH strata)
6 Toe formation Nil
7 Muck pile Loose
8 Profile Satisfactory
9 Packaging quality Satisfactory
(Cartridge)
10 Product quality i) No oozing
(Cartridge) ii) Shelf life 6 Months
11 Water resistance Excellent (Not applicable during
summer)

IV) Charging and blasting shall be conducted on the same day preferably. In case
of machine breakdown or some other exigency, charged holes may be kept as
per sleeping holes permission granted to projects.
V) If the performance of the SME in the above format is found to be satisfactory in
one stage, then it will be recommended to next stage. Otherwise, the same
should be recorded in the joint inspection report and the project management is
empowered to decide whether to proceed further with the trial or not.

VI) Even if product fails to perform satisfactorily in any stage, records pertaining to
successful blasts till that stage shall be kept for future reference.
VII) The trial shall be completed in 6 to 9 months from the date of placement of
order (excluding rainy season).

B) ACCESSORIES:
a) CAST BOOSTER (500 KG):
1) Total number of trials shall be minimum of 2 in the following way:
i) First stage trial shall be conducted in soft strata in 1 or more
number of blasts. If performance is found to be satisfactory in
soft strata, then it should be trialed in hard strata in 1 or more
number of blasts.

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ii) If in first stage the performance of the product is satisfactory
then second stage trial shall be conducted in very hard strata
in 1 or more number of blasts and if performance is found to be
satisfactory then the above product should be treated as
established for regular use.

iii) Total trial quantity should be 10% of annual off-take or 500 Kg

whichever is less.

2) The trial shall be completed within 6 to 9 months from the date of

placement of order (excluding rainy season).

3) Physical condition and Packaging should be satisfactory.

4) Product quality should be satisfactory.

5) Shelf life of the product should be one year.

b) NONELS – 1000 Nos. (500 Nos DTH & 500 Nos HTD)

1) Total number of trials shall be minimum of two in the following

way:
i) First stage trial shall be trialed in soft strata in 1 or more
number of blasts. If performance is found to be satisfactory in
soft strata, then it will be trialed in hard strata in 1 or more
number of blasts.

ii) If in first stage the performance of the product is satisfactory

then second stage trial shall be conducted in very hard strata
in 1 or more number of blasts and if performance is found to be
satisfactory then the above product should be treated as
established for regular use.

iii) The length of the NONEL to be procured shall be decided by

the project as per prevailing working conditions. However,
Total trial quantity should be 10% of annual off-take or 1000
Nos. whichever is less.

2) The trial shall be completed within 6 to 9 months from the date of

placement of order (excluding rainy season).

c) DETONATING FUSE (30000 Mtrs)

1) Total number of trials shall be minimum of 2 (blasting in medium

hard/hard and very hard strata) in the following way:
i) First stage trial shall be conducted in medium hard/ hard strata
in 1 or more number of blasts.

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ii) If in first stage the performance of the product is satisfactory then
second stage trial shall be conducted in very hard strata in 1 or
more number of blasts and if performance is found to be satisfactory
then the above product should be treated as established for regular
use.
iii) Total trial quantity should be 10% of annual off-take or 30000 Mtrs,
whichever is less.
2) The trial shall be completed within 6 to 9 months from the date of
placement of order (excluding rainy season).
3) The reel of DF shall be strong.
4) The Detonating Fuse shall not have kinks and discontinuities / voids /
gaps.
5) Physical condition and Packing quality should be satisfactory

5.14.3 PROCEDURE FOR PLACING THE TRIAL ORDERS FOR EXPLOSIVES

a) Trial orders for explosives should be finalized at project level as Geo
mining conditions varies from Project to Project and also suppliers are
region specific due to prevailing security constraints and statutory
obligations, etc.

b) Limited Tender shall be issued to the firms who approach projects for
conducting trials. Lowest Bidder should be given first preference and trials
to be conducted. Other Bidders should be asked to match lowest Bidder
price and trials to be conducted on original ranking basis after completion
of trials from the lowest Bidder.
c) In case of single offer, the price of trials should be lower or equal to the
prevailing RC price.
d) Projects are empowered to conduct and approve trial orders as per
Delegation of Powers.

5.15 TRANSPORTATION RATE / RUNNING CONTRACT

Projects shall conclude the rate / running contract for transportation of

incoming and outgoing materials from anywhere in the India to our projects
and vice versa with multiple banks approved transporters. This will enable
projects for smooth transportation of incoming & outgoing materials from and to
anywhere in the country for a period of 2 or 3 years and may be extended
by upto 1 year with the consent of the transporter. The transportation rate /
running contracts will be processed by project itself jointly wherever feasible.

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5.16 DEPOT AND COLD AGREEMENTS

5.16.1 ENTERING INTO DEPOT & COLD AGREEMENTS

Corporate office shall enter into Depot agreement (DA) with OEMs/Authorized
Distributor/ Dealer/Agent for supply of HEM spares to maintain continuity of
operation by ensuring steady supply of materials.
Corporate office shall also enter into Consumer Operated Lubricants Depot
(COLD) with Public Sector Oil companies for supply of Lubricants through
LTE/ Nomination as the case may be. As per agreement, Projects will make
the payment for actual consumption of Lubricants during the previous month.
This enables end User to draw the material directly from their Depot situated
at NMDC Projects and thus reduces lead time, ordering cost and Inventory
carrying cost.

In all the above cases of Depot Agreement (DA) / Consumer operated

lubricants depot (COLD), MM Department at HO shall call for LTE/
Nomination basis enquiry with detailed terms & conditions of the agreement &
finalize the agreements on mutually agreed terms. The DA /COLD may be
made for a period of 3-5 years depending on the need and thereafter
extendable with the consent of Depot holders.

5.16.2 PLACING ORDER UNDER DEPOT / COLD AGREEMENTS

Normally, the items covered by Depot / COLD agreements would be ordered
directly by the project concerned. PR shall be raised on ERP System by User
Department for the stores consumed during previous month under the DEPOT
/COLD agreement. Corresponding Depot / COLD agreement shall be selected
when raising the PR. Direct Dealing officer of MM team at project sites shall
review the PR and issue the Release Order to the supplier holding the
contract after financial vetting of the PR.

5.17 INSURANCE COVERAGE

5.17.1 TRANSIT INSURANCE FOR DESTINATION CASES

The supplier should insure the goods at his cost for all transit risks. Failure to
do so will make the supplier responsible for making good any loss or
damages. In case where contracts are finalized on Ex-works basis, the
firms should be asked to dispatch the consignments only through any of
NMDC’s approved transporters covering transit risks under open inland transit
policy.

The supplier is required to give the intimation immediately on dispatched

materials giving the details like LR No., Invoice No., the name of the
transporter and truck/trailer No. However, in exceptional cases where the
supplier agrees to supply the material upto destination bearing only the freight
element, in such case insurance is required to be taken by the consignee.

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5.17.2 INSURANCE POLICIES TO BE HANDLED BY NMDC CORPORATE
OFFICE
MM Department (Corporate Office) shall take the following insurance
policies, wherever applicable:
a) Marine Cargo open cover (anywhere in the world to anywhere in India)
for important consignments and for consignments required for R&D and
NPD Lab.
b) Marine transit insurance coverage policy is to be taken by MM Dept., at
corporate office on annual basis and declarations will be made on case to
case basis, however, claims against policy shall be dealt by respective
projects.
c) Special contingency policy for Diamonds (Panna Project)
d) Transit insurance policy for gold & silver coins on case to case basis
e) Fire Insurance policy for R&D and NPD labs.
f) All Risks Policy for Electronic and Portable Equipment instruments used
by resource planning departments

For these policies, in case of any clarifications, to follow up with Insurance

companies and claims, MM dept. (HO) will take assistance from Insurance
intermediary, if any.

Finance Department (Corporate Office) shall take the Industrial All Risks
(IAR) policy covering all project assets as required (except for Sponge Iron
Unit, Paloncha). This policy covers all events like breakdown of plant &
machinery, fire, burglary etc. for all capital items. For Sponge Iron Unit,
Paloncha, Finance Department HO shall take Fire Insurance Policy.
These policies are to be taken from IRDA (Insurance Regulatory and
Development Authority) approved Government Agencies by paying advance
premium.
5.17.3 INSURANCE POLICIES TO BE HANDLED BY PROJECTS
MM dept. (Projects) will take the following insurance policies, wherever
applicable:
a) Open insurance transit risk policy for covering inland transit risks from
suppliers’ godown to NMDC stores for covering all risks of incoming &
outgoing consignments which are not covered by the suppliers and which
are decided to be covered.
The declaration of consignments to be covered by such open policy,
would be made by the concerned Projects consignee on monthly basis
the Insurance Company and premium would be payable based on such
declarations.
The nature of materials which are to be covered by such insurance would
be decided by the concerned Projects and quotations called for deciding
the insurance company for taking open policy by Projects.

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Claims against such open policy should be made and pursued by the
Project directly with the insurance company till settled.

b) Fire & other risks policy for inventories in Central Stores Depots,
Stores installations including POL & Consumer operated Lubricants
Depots. Stock Declaration is to be done by project.
c) To the extent of all inventory items Fire Insurance Policy, Burglary,
Fidelity policy are to be done by respective Projects.
For these policies, in case of any clarifications, to follow up with Insurance
companies and claims, MM dept. (projects) will take assistance from
Insurance intermediary, if any.
These policies are to be taken from IRDA (Insurance Regulatory and
Development Authority) approved Government Agencies by paying advance
premium.

5.18 EXPRESSION OF INTEREST (EOI)

5.18.1 TWO STAGE BIDDING - EXPRESSION OF INTEREST TENDERS –

MARKET EXPLORATION

There are instances where the equipment/ plant to be procured is of complex

nature and the procuring organization may not possess the full knowledge of
either the various technical solutions available or the likely sources for such
products in the market. To meet the desired objectives of a transparent
procurement that ensures value for money simultaneously ensuring
upgradation of technology & capacity building - it would be prudent to invite a
two-stage Expression of Interest (EoI) Bids and proceed to explore the
market and to finalize specifications based on technical discussions/
presentations with the experienced manufacturers/suppliers in a transparent
manner.

Expression of Interest (EoI) bids may be invited in following situations:

i) It is not feasible for the NMDC to formulate detailed specifications or
identify specific characteristics for the subject matter of procurement,
without receiving inputs regarding its technical aspects from bidders;

ii) The character of the subject matter of procurement is subject to rapid

technological advances or market fluctuations or both

iii) The NMDC seeks to enter into a contract for the purpose of research,
experiment, study or development. However, the contract cannot be used
for large scale production to test the commercial viability of the developed
product (or) to recover Research & Development costs; or
iv) The bidder is expected to carry out a detailed survey or investigation and
undertake a comprehensive assessment of risks, costs and obligations
associated with the particular procurement (Rule 164 of GFR 2017)

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5.18.2 THE PROCEDURE FOR TWO STAGE BIDDING SHALL INCLUDE THE
FOLLOWING, NAMELY:

i) In the first stage of the bidding process, the NMDC shall invite EoI bids
containing the broad objectives, technical and financial eligibility criteria,
terms and conditions of the proposed procurement etc. without a bid
price. On receipt of the Expressions of Interest, technical discussions/
presentations may be held with the short-listed manufacturers/ suppliers,
which are prima facie considered technically and financially capable of
supplying the material or executing the proposed work, giving equal
opportunity to all such bidders to participate in the discussions.
During these technical discussions stage the NMDC may also add those
other stakeholders in the discussions who could add value to the decision
making on the various technical aspects and evaluation criteria. Based on
the discussions/ presentations so held, acceptable technical solutions
could be decided upon laying down detailed technical specifications,
quality benchmarks, warranty requirements, delivery milestones etc. in a
manner that is consistent with the objectives of the transparent
procurement. At the same time care should be taken to make the
specifications generic in nature so as to provide equitable opportunities to
the prospective bidders. Proper record of discussions/ presentations and
the process of decision making should be kept;
ii) In revising the relevant terms and conditions of the procurement, if found
necessary as a result of discussions with the shortlisted bidders, the
NMDC shall not modify the fundamental nature of the procurement itself;
iii) In the second stage of the bidding process, the NMDC shall invite bids
from all those bidders whose bids at the first stage were Accepted, to
present final bid with bid prices in response to a revised set of terms and
conditions of the procurement; and
iv) Any bidder, invited to bid but not in a position to supply the subject matter
of procurement due to modification in the specifications or terms and
conditions, may withdraw from the bidding proceedings without forfeiting
any bid security that he may have been required to provide or being
penalized in any way, by declaring his intention to withdraw from the
procurement proceedings with adequate justification.
v) If the NMDC is of the view that after EoI stage, there is likelihood of further
participation by many more bidders and to avoid getting trapped into a
legacy technology, the second stage bidding may not be restricted only to
the shortlisted bidders of EoI stage and it may be so declared in the EoI
document. Thereafter in the second stage, normal OTE/ GTE bidding may
be done. Such variant of EoI is called ‘Non-committal’ EoI.

5.18.3 INVITATION OF EOI TENDERS

In EoI tenders, an advertisement inviting expression of interest should be
published. The invitation to the EoI document should contain the following
information:

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i) A copy of the advertisement;
ii) Objectives and scope of the requirement:
This may include a brief description of objectives and broad scope of the
requirement. It may also include the validity period of empanelment;
iii) Instructions to the bidders
This may include instructions regarding the nature of supply, fees for
empanelment (if any), last date of submission, place of submission and
any other related instructions;
iv) Formats for submission
This section should specify the format in which the bidders are expected to
submit their EoI;
v) The EoI document should be made available to the interested bidder as a
hard copy as well as on its website in a downloadable form; and

vi) ELIGIBILITY CRITERIA

The invitation to EoI should clearly lay down the eligibility criteria, which
should be applied for shortlisting. Supporting documents required need to
be clearly mentioned. An example of EoI eligibility criteria is shown in
Table 1. However, appropriate eligibility criteria has to be designed,
keeping in mind the specific objectives of the EoI.

TABLE 1. AN EXAMPLE OF EOI ELIGIBILITY CRITERIA

Criteria Sub-Criteria Weightage Break-up of
Weightage
Past experience of the A*
firm with similar
requirements
Financial strength of the B*
vendor
Average Turnover B1*
figures of the last
three years
Net Profit figures B2*
of the last three
years
Quality accreditations, C*
licensing requirements
Manufacturing D*
Capabilities/ tie – ups
After-sales support E*
infrastructure
Product support F*

* Weightage (out of 100) should be pre-decided and declared in EoI

documents by the CA based on assessment of the required profiles of
the potential bidders. The marking/ grading scheme for allotting marks
(out of 100) for various parameters should also be laid down.

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5.18.4 EVALUATION OF EOI
The bidders should be evaluated for shortlisting, inter-alia, based on their
past experience of performance in a similar context, financial strength and
technical capabilities, among others. Each bidder should be assigned scores
based on the sum of marks obtained for each parameter multiplied by the
weightage assigned to that parameter. All bidders who secure the minimum
required marks (normally 60 (sixty) per cent) should be shortlisted. The
minimum qualifying marks should be specified in the EoI document.
Alternatively, instead of weighted evaluation, the EoI document may specify a
‘fail-pass criteria’ with the minimum qualifying requirement for each of the
criteria, such as minimum years of experience, minimum number of
assignments executed and minimum turnover. Under such circumstances, all
bidders who meet the minimum requirement, as specified, should be
shortlisted.

5.18.5 PRE-NOTICE INVITING TENDER (NIT) CONFERENCE

In complex and innovative procurement cases or where the NMDC may not
have the required knowledge to formulate tender provisions, a pre-NIT
conference may help the NMDC in obtaining inputs from the industry. Such
conferences should be widely published so that different potential suppliers
can attend.

5.19 PROCUREMENT THROUGH OPEN AUCTIONS

When items / materials are listed for sale through open auctions, concerned
department shall constitute a committee and obtain the approval for
constitution of the committee from C/A. Normally, the committee shall have
representatives from the corresponding User Department, Materials
Department and Finance Department.

The committee shall examine the items for their suitability to the needs of
NMDC and shall recommend participation in the auction, if necessary. The
committee shall also recommend the maximum ceiling limit/ maximum
premium percentage over the floor price of auction for participation in the
auction based on budgetary quotes, LPR, condition of the items listed in the
auction, availability of warranty / performance guarantee etc. wherever
applicable etc.

Committee minutes and the proposal to participate in the auction should be

concurred by finance and approved by Competent Authority as per extant
DoP.

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5.20 GOVERNMENT e-MARKET PLACE (GeM)

The Government has created an internet portal called Government e-

Marketplace (GeM) to provide an end- to-end online Marketplace for Central
and State Government Ministries / Departments, Central & State Public Sector
Undertakings (CPSUs & SPSUs), Autonomous institutions and Local bodies,
for procurement of common use goods & services in a transparent and
efficient manner. Suppliers and buyers can register on this portal. GeM
facilitates seamless process flow and standardized specifications with
complete audit trail.

Extant GeM provisions and the Standard Operating Procedure (SOP) for
procurement through GeM is placed at Annexure 5-II (P-222).

GeM provisions are subject to changes. Latest GeM guidelines should be

adhered to. Standard Operating Procedure may be amended by MM
Department at HO from time to time based on requirements and changes in
GeM provisions. Such amendments in GeM SOP issued by MM Department at
HO shall be followed.

Notwithstanding other clauses of this manual, for GeM procurement, relevant

GeM provisions / guidelines and the SOP (including latest amendments issued
by HO) shall be followed.

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CHAPTER – 6
6 TENDER ENQUIRY TERMS AND CONDITIONS
This section deals with the major clauses to be included in the tender
documents and the associated NMDC policies regarding these clauses.

6.1 CLASSIFICATION OF BIDDING SYSTEM

Tender documents shall clearly identify the type of bidding to be used for the
tender. Concerned Purchase Cell would seek approval of competent authority
for the type of bidding to be used. One of the following type of bids shall be
used.

6.1.1 SINGLE BID SYSTEM

For single tenders (Proprietary or nomination), single bid system shall be
used. For Limited tenders, where technical / commercial terms are firm /
frozen & no negotiation of such terms are required, qualitative requirements
and technical specifications are clear, capability of source of supply is not
critical and value of procurement is low or moderate single bid system may
be followed. Eligibility, technical/ commercial and financial details are
submitted together in the same envelope in this system. However, it shall be
preferable to conduct LTE in 2 Bid system.

6.1.2 TWO / THREE BID SYSTEM

For all Open tenders and Global Tenders, two / three bid system shall be
followed.
a) For Limited tenders where the technical & commercial terms are not firm
& are to be negotiated, items under procurement are critical or of
complex nature and the value of procurement is high, the tenders shall
be floated in two / three bid system.
b) In case of two bid system, first part is the ‘Techno-Commercial Bid’ and
it consist of technical details and commercial terms and conditions of the
offer, along with deviations if any. Second part is the ‘Price Bid’ or
‘Financial Bid’. The second part shall consist of only the price quotation.

c) Both ‘Techno-Commercial Bid’ and ‘Financial Bid’ should be submitted on

or before due date to be considered as a valid offer. Financial bid of only
those Bidders, whose techno-commercial bid is acceptable, should be
opened for further scrutiny and evaluation. Financial bid of technically
non-compliant bidders should be returned unopened to the Bidders in
case of manual tenders.
d) In case of three bid system, first part shall comprise of EMD and
Integrity pact. Second and third part shall be ‘Techno-Commercial Bid’
and ‘Price Bid’ (or) ‘Financial Bid’ respectively.

6.1.3 OFFER VALIDITY:

Offer should be initially kept valid for 180 days from the date of tender opening
and to be extended for further period if necessary.

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6.2 TENDER COST

In order to promote wider participation and ease of bidding, NO cost
towards tender documents shall be charged.

6.3 GOI PURCHASE PREFERENCE POLICIES

Tender documents shall mention all extant GoI policies (detailed in Chapter -
2) that are applicable.

6.4 EARNEST MONEY DEPOSIT (EMD)/ BID SECURITY

6.4.1 Bidders are required to deposit EMD In favour of NMDC Limited, from any
Nationalized Indian Bank /Scheduled Commercial Bank (except cooperative
and Gramin Bank) including a foreign bank having a branch in India in either
of the following modes:

a) Demand Draft (DD) / Bank Guarantee (including e-BG) valid for 6

months + 3 months claim expiry period.
b) Bank transfer through NEFT / RTGS / SWIFT to NMDC bank account
mentioned in tender document. The proof of such transfer / transaction
like UTR number / SWIFT copy etc. needs to be submitted with the
Offer.
c) EMD in any other form as stipulated in tender documents with the
approval of Competent Authority.
For transfer of EMD through NEFT / RGTS / SWIFT, tender document shall
clearly mention that NMDC is not responsible for any delay or failure of
payments. EMD should be credited to NMDC’s bank account before the tender
due date and time.

6.4.2 No interest will be paid on EMD amount.

EMD should be refunded / returned to the unsuccessful Bidders within 30
days after placement of the order / tender is cancelled. For successful
Bidders, EMD will be returned after receipt of Security Deposit / PBG
wherever applicable.
However, in case of two packet or two stage bidding, EMD of unsuccessful
bidders should be returned within 30 days after declaration of result of
first stage i.e. techno-commercial bids evaluation.
6.4.3 Bidder shall be responsible for the correctness and completeness of the
BG / DD / Bank transfer submitted towards EMD. In case the EMD
submitted is not as per the value specified in the tender, the same shall be
summarily rejected.
6.4.4 In case the tender is issued with stipulation of EMD, normally bidder is
required to submit EMD, along with their offer for consideration of their bid,
unless & otherwise exemption has been permitted. The tenders received
without EMD shall be summarily rejected.

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6.4.5 EMD APPLICABILITY AND EXEMPTIONS

a) For procurement of all items, valuing more than Rs.10 Lakhs under open
Tender/ global tender/ limited tender, wherever envisaged, either in two bid
(or) single bid system, the EMD has to be submitted as below:

For Total estimated value above Rs. 10 Lakhs, EMD should be @ 1%

of the estimated value of procurement. The maximum Limit of EMD
should be Rs. 25 Lakhs.

b) For Total estimated value upto Rs. 10 Lakhs – NIL

c) Tenders on proprietary basis, nomination basis need not seek EMD.

d) For spare parts and consumables with estimated purchase value (PR
estimate) upto Rs. 10 Lakhs, EMD shall not to be insisted.

e) For other small value purchases with estimated purchase value (PR
estimate) upto Rs. 10 Lakhs, EMD shall not to be insisted.

f) MSE units are required to submit the valid documentary evidence as per
provisions of the government policy detailed in section 2.2, to the effect
from the concerned authorities for the items quoted by them.
g) Traders / Dealers are not eligible for any MSE benefits. Further,
Medium firms are also not eligible for any MSE benefits.

h) Govt. Depts/ Undertakings need not submit EMD.

i) Manufacturers of Steel, Cement and POL items need not submit EMD.
j) Any new source even though covered under exemption category is required
to submit EMD excluding Govt dept/ Undertaking and MSE unit.

k) In case of exemption from EMD clause, approval from Competent

Authority shall be taken on case to case basis.
l) In appropriate cases, submission of the EMD may be waived with the
Competent Authority’s (C/A’s) approval, especially in the case of
indigenization/ development tenders, limited tenders and procurements
directly from the manufacturer.

m) Bidder’s EMD will be forfeited if the bidder withdraws or amends its/ his
tender or impairs or derogates from the tender in any respect within the
period of validity of the tender.

n) For Procurement through GeM, EMD exemptions as per GeM shall be

followed.

o) All applicable Government guidelines issued from time to time with

respect to MSEs shall be followed without fail.

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6.5 SECURITY DEPOSIT (SD)/ PERFORMANCE SECURITY:

6.5.1 Successful bidder(s) should deposit security deposit to NMDC Ltd @ 5 % of

the Contract value within 30 days of PO towards satisfactory
performance of the contract from any Nationalized Indian Bank/ Scheduled
Commercial Bank (except cooperative and Gramin Bank) including a
foreign bank having a branch in India in either of the following modes:

a) Demand Draft (DD) / Bank Guarantee (including e-BG) for delivery

period + 3 months claim period.

b) Bank transfer through NEFT / RTGS / SWIFT to NMDC bank account

mentioned in tender document. The proof of such transfer / transaction
like UTR number / SWIFT copy etc. needs to be submitted to NMDC
within 30 days of Order placement.

In case the bidder does not agree to submit Security Deposit as stipulated
in the tender conditions, their offer shall be rejected, except for the
Bidders, who have got exemption for submitting the Security Deposit as per
Government guidelines.

6.5.2 In case the materials are supplied as per PO quantity and received within
30 days of PO, the security deposit shall be exempted.
In the event of placement of an order, should the supplier fail to submit the
Security Deposit within 30 days of PO, a penal interest at 12% per annum of
the SD amount shall be charged beyond 30 days i.e. from the 31st day of
effective date of contract.

For example:
If the contract value is Rs 10 crores (excluding taxes) and if the supplier fails to
submit the SD amount within stipulated period of 30 days and has deposited the
same on 40th day of the effective date of contract, then the penal interest on SD
amount shall be Rs.16,439/- (i.e [Rs 50 lakhs * 0.12]*10 days /365 days)

Further, if the supplier fails to submit SD even after suitable extension*, then
NMDC reserves the right to forfeit the EMD of that bidder and shall eliminate the
bidder from participating in case of Retender.

In case of MSE bidder, they shall not be allowed in participating in the retendered
case as the MSE bidders are exempted from submission of EMD.

*Suitable extension period shall start from 31st day from effective date. However,
the maximum permissible days of such extension has to be defined in the tender
enquiry on case to case basis.

6.5.3 GoI guidelines issued from time to time regarding Security Deposit shall be
followed. For GeM procurement, GeM guidelines on SD shall be followed.

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6.5.4 SECURITY DEPOSIT SHALL NOT BE INSISTED FOR ANY OF THE
FOLLOWING CASES
i) Purchases upto Rs 20 lakhs.
ii) Firm of proprietary in nature.
iii) Govt Depts./ Undertakings.
iv) Manufacturers of steel, cement, and POL items.
v) Procurement of Spare parts, Material purchased against Depot
Agreement/ Rate or Running Contracts concluded by NMDC.
6.5.5 The Security Deposit Bank Guarantee / amount will be returned by MM
Department once the supply is made and accepted, or pending job/ work is
completed and PBG is submitted (wherever applicable). However, if there is
any discrepancy in supply or completion of job/ work, the Security Deposit can
be returned after consulting the User Department.
6.5.6 Liquidated Damages / Risk purchase cost claimed by NMDC, if any, against
discrepancy in supply or completion of job/ work (delay in supply / supply of
deficient materials / failure to supply/ failure to complete job/ work etc.) may be
adjusted against Security Deposit wherever the supplier is responsible for
discrepancy in supply and Force Majeure is not involved.
6.6 PERFORMANCE BANK GUARANTEE (PBG)/ WARRANTY BANK
GUARANTEE:
To safeguard the purchaser’s interest in all respects, a suitable
performance guarantee @ 10% of contract value would be insisted upon for
procurement of capital equipment and other important high value items like
Conveyor belts, TCRR bits, OTR Tyres etc.
PBG shall be submitted (wherever applicable) by successful bidder of order
placement with validity for warranty period plus three months claim period in
favour of NMDC Limited, from any Nationalized Indian Bank/ Scheduled
commercial bank (except Co-operative and Gramin Bank) including a foreign
bank having a branch in India in the form of Bank Guarantee (including e-BG)
valid for warranty period + 3 months claim period in case if the performance
linked with warranty.
In the event of placement of an order, should the supplier fail to submit
the PBG within 30 days of Dispatch/ Acceptance/ Commissioning of
materials (as defined in the PO, a penal interest at 12% per annum of the
PBG amount shall be charged beyond 30 days i.e. from the 31st day of
effective date of Dispatch/ Acceptance/ Commissioning of materials.
For example:
If the contract value is Rs 10 crores (excluding taxes) and if the supplier fails to
submit the PBG amount within stipulated period of 30 days and has deposited
the same on 40th day of the effective date of Dispatch/ Acceptance/
Commissioning of materials, then the penal interest on PBG amount shall be
Rs.32,877/- (i.e. [Rs 1 Crore * 0.12]*10 days /365 days)
If the supplier fails to submit PBG even after suitable extension*, then NMDC
shall forfeit the EMD/SD of that bidder and shall eliminate the bidder (including
MSE) from participating in case of Retender.
*Suitable extension period shall start from 31st day from effective date.

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6.6.1 A separate BG @ 10% Contract value of AMC/ CAMC/ MARC/ COST CAP
shall be taken in addition to PBG towards performance guarantee of the
equipment.
This BG shall be returned to the supplier only after the completion of contract
period (AMC/ CAMC/ MARC/ COST CAP) plus 3 months grace period upon
confirmation of satisfactory performance of the contract.
6.6.2 GoI guidelines on Performance Bank Guarantee from time to time shall be
followed. For GeM procurement, GeM guidelines regarding Performance
Bank Guarantee shall be followed.

6.6.3 PERFORMANCE GUARANTEE FOR (HEM) EQUIPMENTS:

The equipment should be guaranteed for minimum average availability of 85%
during the warranty period. The Bidders should be asked to furnish a bank
guarantee in NMDC format for 10% value of the equipment valid for 24 months
plus three months in support thereof.
In the event of machine, not being able to achieve the average availability of
85% during this period, the supplier is required to arrange to repair or replace
to ensure that the equipment is in operation for the originally guaranteed period
at their cost. In the event of any shortfall in minimum average guaranteed
availability (to be minimum 85%), the supplier is liable for LD @ 1 % of the
equipment value for every drop of 1 % of performance from the guaranteed
availability, subject to a maximum of 10%. For shortfall in performance beyond
10% as stipulated in tender/PG conditions, the equipment shall be liable for
rejection (< 75%).
However, in the event of equipment not being able to achieve the average
availability of 85% during guarantee period after carrying out the modifications,
within three months, the average availability is to be calculated for 24 months
after deducting availability of the three months period for repairs/modifications.
Percentage availability = (Pr - Br) ÷ Pr x 100
WHERE
Pr = Production shift hours (-) Schedule maintenance hours.
Br = Break down hours
In case the supplier offers performance guarantee for a period less than the
specified warranty period, their offer will be proportionately loaded, subject to a
maximum of 5% of basic cost of the equipment. The offers with performance
guarantee below 12 months will be rejected.

6.6.4 PERFORMANCE GUARANTEE FOR PLANT EQUIPMENT

The performance guarantee will be in two parts
PART-I
The mechanical performance of the equipment should meet the values of
guaranteed parameters as specified in tender for PG test to be carried out. In
the event of equipment not meeting the guaranteed parameters the
Corporation will levy LD @ 1 % of the value of equipment for every 1 % fall in
the performance or part thereof subject to maximum 5% value of the
equipment. Shortfall in performance beyond 5% as stipulated in tender/PG
conditions the equipment shall be liable for rejection.

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PART-II
The equipment availability should be guaranteed for a minimum of 95% during
the warranty period of 24 months. For every 1 % drop in the availability 1 %
value of the equipment will be levied as LD. The equipment having shortfall in
availability beyond 5% shall be liable for rejection (<90%).
The calculation of availability shall be done as below: -
Performance Availability = (Pr - Br) ÷ Pr x 100

WHERE
Pr = Production Shift Hours (-) Schedule maintenance hours.
Br = Breakdown Hours.
However, in the event of equipment not being able to achieve the average
availability of 95% during warranty period, the supplier shall have the option to
carry out modification for bringing the availability to the desired level within 3
months. The average availability is to be calculated for 24 months after
deducting availability of the 3 months period of repairs/modifications.
In case the supplier offers performance guarantee for a period less than the
specified warranty period, their offer will be proportionately loaded subject to a
maximum of 5% of basic cost of the equipment.
The offer with performance guarantee below 12 months will be rejected.
In case of Proprietary/ Single tender/ only single acceptable tender, the
stipulation of loading on technical/ commercial points does not arise.
.
6.6.5 The performance BG, if liquidated damages are not claimed, will be returned by
MM Department after consulting the user department once the supplier has
fulfilled the contractual terms but not later than 60 days of the completion of
all obligations including the warranty under the contract.
The PBG will be forfeited and credited to the NMDC’s account in the event
of a breach of contract by the contractor.

Return of PBG should be monitored by the senior officers and delays should be
avoided. If feasible, the details of these securities may be listed in the ERP
System, to make the process transparent and visible.

6.7 AUTHORIZED BANKS & OTHER GUIDELINES FOR BANK GUARANTEE

(Including e-BG)

6.7.1 Bank Guarantees from all Nationalized Banks in India, Scheduled Commercial
Banks in India (except Co-operative and Gramin Bank), Foreign Banks
having branches in India, may be accepted for the following purposes:
i) Bank Guarantee towards Advance Payments.
ii) Bank Guarantee towards Earnest Money Deposits (EMD).
iii) Bank Guarantee towards Security Deposit/ Performance Security
iv) Bank Guarantee towards Warranty / PBG

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6.7.2 FOLLOWING GUIDELINES ARE TO BE FOLLOWED FOR EMD,

SECURITY DEPOSIT AND PERFORMANCE GUARANTEE.

i) BG format has been standardized after vetting by the Law Dept at

corporate level. The standardized format is required to be followed. In
case of any bank does not agree some of the clauses standardized by
NMDC Law Department, Head Office is to be contacted for acceptance
of any changes.
ii) Performance guarantee/SD in the form of BG (cross reference with
mode of EMD/SD/PBG) is to be monitored by the consignee/paying
officers for seeking timely extensions with the approval of competent
authority wherever required. BG’s will be in the custody of Finance, who
will forward a monthly statement to the Materials department who in
consultation with user dept will take advance action for extension/
encashment/ return of BG after approval of competent authority.

iii) Finance Department is only the custodian of the BGs, all other actions
need to be taken by the MM Dept.

iv) The specimen form of the EMD, Security Deposit and Performance
Guarantees, (BG Formats) are enclosed as Annexure 6-I (a), (b) &
(c) (P-231-234).

6.7.3 VERIFICATION OF BANK GUARANTEE

Bank Guarantee submitted by the tenders/suppliers as EMD/ SD/ PBG

need to be immediately verified from the issuing bank before acceptance.
There is no need to get the Bank Guarantee vetted from legal/ finance
authority if it is in the specified format. Guidelines for verification of BGs
submitted by the bidders/ contractors against EMD/SD/PBG/ advance
payments and for various other purposes are as follows:
i) BG shall be as per the prescribed format.
ii) The BG contains the name, designation, and code number of the Bank
Officer(s) signing the guarantee(s);
iii) The address and other details (including telephone no.) of the
controlling officer of the bank are obtained from the branch of the bank
issuing the BG (this should be included in all BGs);
iv) The confirmation from the issuing branch of the bank is obtained in
writing through registered post/ speed post/ courier. The bank should
be advised to confirm the issuance of the BGs specifically quoting the
letter of NMDC on the printed official letterhead of the bank indicating
address and other details (including telephone nos.) of the bank and
the name, designation and code number of the officer(s) confirming the
issuance of the BG.

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v) Pending receipt of confirmation as above, confirmation can also be
obtained with the help of responsible officer at the field office, which is
close to the issuing branch of the bank, who should personally obtain
the confirmation from issuing branch of the bank and forward the
confirmation report to the concerned NMDC.
Bank Guarantees, either received in physical form or electronic form, should
be verified for its genuineness/ correctness following prescribed method for
the same and the NMDC Buyers should do due diligence on genuineness of
the BGs before acceptance of the same.
6.8 PERFORMANCE GUARANTEE WITH COST CAP FOR HEM EQUIPMENTS
a) The equipment should be guaranteed for a minimum average availability
of 85% per annum (every year) during the first 6 years or 18000 working
hours, whichever is earlier from the date of commissioning.
S.No Year of COST CAP % age of availability
1 1st Year 85 %
2 2nd Year 85 %
3 rd
3 Year 85 %
4 4th Year 85 %
5 th
5 Year 85 %
6 th
6 Year 85 %
b) In case the actual availability of the equipment falls short of the
minimum guaranteed availability as stated in (a), the supplier/Dealer will
be liable to pay LD to NMDC @ 1% of the basic value of the equipment
for every 1% drop of availability or part thereof from the guaranteed
availability subject to a maximum LD of 10% of the basic value of the
equipment. The LD will be calculated equipment wise.
c) OEM/ their Authorized Dealer should furnish a bank guarantee from a
Nationalized/ Scheduled commercial bank for 10% of basic equipment
value initially valid for warranty period of 24 months while claiming the
balance 10% payment thereafter another Bank guarantee or extension
of the earlier Bank guarantee valid for balance Cost Cap period. The
Bank Guarantee shall be furnished by the Supplier for the A/Ts issued
on them respectively.
d) The availability of the equipment will be calculated by using the formula
given below:
FORMULA:
Percentage of availability = Production shift hours (-) breakdown hours x100
Production shift hours
Production shift hours = Schedule shift hours i.e. 8 hours per shift.
Break down hours means all hours of works lost due to mechanical,
Electrical, daily/scheduled maintenance or any other failures or repairs.
In the above formula, schedule hours for 2/3 shifts of 8 hours per shift
are to be considered. Fuel filling time will be excluded for the
calculation of availability.

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Based on the availability/utilized hours of respective HEMM, NMDC will

calculate the MTBF & MTBR data, which will be used internally for calculation
of reliability of the equipments. Any break down hours of the Equipment due to
accident, abuse of Machine or break down due to negligence in operation and
non-availability of resources like EOT Crane, Electricity etc,.) Shall be
excluded for the calculation of availability.
NOTE:
Logical changes, wherever required shall be made while putting up the
proposal.

A. BREAK DOWN HOURS

Break down hours shall mean all hours of work lost due to mechanical,
electrical or other failure, including:
a) Routine servicing and maintenance in accordance with the manufacturer's
published recommendations, including: changing oils, oil filters and air
filters; lubrication; changing identified consumable or wear parts.
b) Planned preventative maintenance programmes;
It shall not however include:
i) Damage due to abusive use or incorrect operation methods by the
NMDC;
ii) Accidents;
iii) Strikes or stoppage of work by the NMDC's personnel;
iv) Natural disaster;
v) Lack of Spare Parts not attributable excluding parts list as mentioned
in NIT to a failure of the Supplier.
NOTE:
For (i) & (ii), a joint inspection report will be prepared with supplier within 3
days from the date of occurrence of incident and repairing works will be
done in consultation with supplier.

Any breakdown hours of the equipment due to accident, abuse of machine

or break down due to negligence in operation and maintenance and not
adhering to the recommended operational and maintenance practices of
the Bidder and non-availability of resources (like manpower, cranes,
electricity, spare parts order etc.) which are not under the control and
scope of the supplier shall be excluded for the calculation of availability.
NMDC shall provide tools tackles, cranes, stores and skilled and semi-
skilled manpower etc. during commissioning & support for 6 years on free
of cost to Cost CAP holder.

c) Every month the availability of the equipment shall be recorded jointly by

NMDC and the supplier. The average availability will be calculated for
every twelve months from the date of commissioning of the equipment.

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B. MAJOR BREAKDOWNS DURING WARRANTY PERIOD

If any major breakdown occurs within the Warranty period of 2 years from the
date of commissioning due to the poor workmanship and design of the
equipment and repetitive failures, the Supplier has to deploy their own
manpower and required spares to re-commission the equipment to achieve the
guaranteed availability. However, general tools and Crane will be provided by
NMDC. For regular preventive maintenance, scheduled maintenance & minor
breakdown, NMDC will deploy the required manpower as per requirements
during Warranty period of 2 years.

C. SERVICE REPORT FOR MAJOR BREAKDOWNS DURING COST CAP PERIOD

In case of any abnormal/major breakdown occurs in the equipment within the
performance guarantee period of 6 years (cost CAP period), the Site
representative of the Supplier should prepare the initial Service Report
regarding failure before carrying out the repair works of the equipment and
after re-commissioning of the equipment, he has to prepare the detailed
Service Report / Re-commissioning Report before releasing the equipment for
operation.

D. ACCIDENTAL REPAIR CLAUSE

In the case of accidental repair i.e. operational fault/ maintenance fault, the
OEM/ COST CAP holder/ shall initiate the procurement to deliver the required
spares/ consumables as instructed in writing by NMDC Service Manager of
Project (without waiting for formal work order/ purchase order from NMDC,
which shall be issued as per NMDC internal process).

The manufacturer should have to replace the assemblies / Sub- assemblies/

complete equipment, as applicable, at their cost to meet the guaranteed
availability.

6.8.1 EQUIPMENT TAKEBACK & REPLACEMENT

In the event average availability of the equipment is found below 75% during the
warranty period the equipment will be rejected after levy of max 10% LD (by
encashing bank guarantee) and supplier is required to take back the equipment at
their cost and replace it with a new equipment on free of cost FOR destination
basis.

In case of availability falls below 75% in Cost Cap period beyond Warranty period
but up to CAP Period. In the event average availability of the equipment is found
below 75% continuously for 3 months at any time between end of warranty period
to till completion of Cost Cap period, NMDC will have option to reject the
equipment after levying of 10% LD.

The manufacturer should have to replace the assemblies / Sub- assemblies/

complete equipment, as applicable, at their cost to meet the guaranteed
availability.

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6.8.2 OPERATIONS & MAINTENANCE (COST CAP) SPARES
(i) SCOPE:

a) Cost CAP holder is required to supply the spares for Operation &
Maintenance of the equipments covered against above order to
maintain the performance guarantee of 85% availability for a period of
72 months / 18000 hours whichever occurs earlier including engine,
transmission assembly, consumables etc., excluding fuel, oils,
lubricants, dump body repair, maintenance and cleaning, tyres and tyre
accessories, electrical consumables like bulbs, wires, glass items,
rubber beadings, fuses, breakages if any at the time of repair &
maintenance work and parts required for accident/abuse repairs on the
machine, and increase in parts consumption attributable to adulterated
fuel or abnormally high levels of silica content, high levels of dust,
moisture (like deteriorating environmental conditions)t. The estimated
working hours per annum is 3000 hrs. The COST CAP is extendable for
further period with mutual consent (if required).

b) NMDC do not intend to purchase the operation and maintenance

spares along with the equipment. The spares shall be drawn
progressively by NMDC throughout the guarantee period of 6 years /
18000 working hours based on the actual requirement. Spare parts
management and storage will be under the scope of supplier.
c) Besides, the list of spares as given by the supplier shall only be
indicative and any items not included in the list are also to be supplied
by the firm on need basis.
(ii) Terms & conditions of Operation & Maintenance spares:
Price: Price Basis – FOR Destination
Maximum ceiling (CAP) value for the O & M (Cost Cap) spares will be
@ Rs. ….. per Equipment plus applicable GST.
In case CAP value of Rs. ….. per equipment is exhausted before end of
the guaranteed period of 6 years/18000 hours of operation, whichever
is earlier, Cost Cap holder shall supply the required operation &
maintenance spares on free of cost basis up to the end of guaranteed
period/ cost cap Period.

Taxes, Transportation & Insurance:

CAP value indicated is inclusive of Transportation and Transit insurance
but exclusive of GST.Present rate of GST @ 18% will be applicable.
However, ruling GST will be applicable on the date of supply/dispatch.

Payment:
a) Payment will be made on monthly basis.
b) Following documents are to be submitted:
i) Bill in triplicate indicating equipment Serial number
ii) Each bill is to be supported with one set of list of items supplied /
consumed duly signed by services in-charge of NMDC.

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iii) Bill is to be certified stating that prices has been indicated as per
the prevailing price list / Rate contract reference Number.
iv) Payment will be released against submission of the bill along
with the above documents.
NOTE: ABOVE TERMS AND CONDITIONS FOR PERFORMANCE GUARANTEE
WITH COST CAP OF HEM EQUIPMENT WILL BE CHANGED ON
EQUIPMENT BASIS.

6.9 PERFORMANCE GUARANTEE WITH MARC FOR HEM EQUIPMENT

a) The equipment should be guaranteed for a minimum average

availability of 85% per annum during the warranty period of 24 months.
The performance guarantee will be calculated on annual basis.

b) In case the actual availability of the equipment falls short of the

minimum guaranteed availability as stated in (a), the supplier will be
liable to pay LD to NMDC @1% of the basic value of the equipment for
every 1% drop of availability or part thereof from the guaranteed
availability subject to a maximum LD of 10% of the basic value of the
equipment. The LD will be calculated equipment wise.

c) OEM/ their Authorized Dealer should furnish a bank guarantee from a

Nationalized/ Scheduled commercial bank for 10% of basic equipment
value initially valid for warranty period of 24 months while claiming the
balance 10% payment thereafter another Bank guarantee or extension
of the earlier Bank guarantee valid for balance MARC period that is for
147 months (144 Months + 03 Months). The Bank Guarantee shall be
furnished by the Supplier for the A/Ts issued on them respectively.

d) In the event of the equipment not being able to achieve the average
availability of 85% at any time during the above guarantee period of 24
months, the supplier will have the option to carry out repair or
modification to the equipment at their cost for bringing the equipment
availability to the guaranteed level. For this purpose, the supplier will be
allowed a total time of 3 months during the above guarantee period of
24 months for under taking repair/ modification.

e) The time taken for repair/ modification (as mentioned at ‘d’) by the
supplier will, however, be excluded for the purpose of calculating the
average availability. However, the guarantee period of 24 months would
still remain and would get extended by the time availed by the supplier
for carrying out the repair/ modification to the equipment.

f) The availability of the equipment will be calculated by using the formula

given below:
The MARC holder is required to maintain average availability of 85% for
12 years (144 months) for each equipment i.e.

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S.No Year of MARC % age of availability
1 1St Year 85 %
2 2nd Year 85 %
3 3rd Year 85 %
4 4th Year 85 %
5 5th Year 85 %
6 6th Year 85 %
7 7th Year 85 %
8 8th Year 85 %
9 9th Year 85 %
10 10th Year 85 %
11 11th Year 85 %
12 12th Year 85 %
The availability of the equipment will be calculated using the formula
given below:
Formula:
Percentage of availability

[Production shift hours (-) Break down hours] x 100

= --------------------------------------------------------------------
Production Shift Hours
Production shift hours = schedule shift hours – scheduled maintenance
hours.

In the above formula 8 hours per shift are to be considered. The

schedule maintenance hours shall be TWO hours per day including all
preventive maintenance / pro-rata basis. Subject to 60 Hrs., per month
maximum / pro-rata basis.
Breakdown hours means all hours of works lost due to mechanical,
electrical or any other failures.
The availability will be calculated on three monthly basis for each
equipment separately. However, availability details are to be
maintained on monthly basis. Fuel filling time will be excluded for the
calculation of availability.

Any breakdown hours of the equipment due to accident, abuse of

machine or break down due to negligence in operation and
maintenance and not adhering to the recommended operational and
maintenance practices of the supplier and non-availability of resources
(like operator, cranes, electricity etc.) which are not under the control
and scope of the supplier shall be excluded for the calculation of
availability.

Scheduled maintenance hours of two hours per working day will be

adjusted on monthly basis.

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Every month the availability of the equipment shall be recorded jointly by
NMDC and the supplier. The average availability will be calculated for every
twelve months from the date of commissioning of the equipment.

6.9.1 EQUIPMENT TAKEBACK & REPLACEMENT

In the event average availability of the equipment is found below 75% during
the warranty period, the equipment will be rejected after levy of max 10% LD
(by encashing bank guarantee) and supplier is required to take back the
equipment at their cost and replace it with a new equipment on free of cost
FOR destination basis.

In the event average availability of the equipment is found below 75%

continuously for 3 months at any time between end of warranty period to till
completion of contract (MARC), NMDC will have option to reject the
equipment after levying of 10% LD. The manufacturer should have to
replace the assemblies/ sub-assemblies/ complete equipment, as applicable,
at their cost to meet the guaranteed availability.

6.9.2 SCOPE OF WORK

a) The contract period will be for a minimum period of 12 years (144

months) or 32000 working hours of each equipment whichever is earlier.
The MARC is extendable for further suitable period with mutual consent.

b) The MARC holder shall undertake responsibility for maintenance of the

equipment from date of commissioning of the equipment.

c) The maintenance of the equipment will be done by the MARC holder.

Maintenance contract will include supply of manpower with tools &
tackles & Engineers, supervisors, running repairs, schedule
maintenance, major repairs and overhauls inclusive of supply of spare
parts, lubricants, assemblies and sub-assemblies during entire period of
contract. Each production shift shall be headed by MARC holder shift
supervisor and shall report to NMDC shift in-charge in the beginning of
the shift regarding the machine availability for operation and related
matters from time to time.

d) The equipment will be operated by NMDC personnel. NMDC will provide

fuel at its own cost for operation. The maintenance of the equipment will
be done by the MARC holder. NMDC to use latest model fuel bowsers
with all new technology. Project shall ensure the fitment of 10 micron
filter on the fuel bowsers and this point to be a part of the agreement to
be made with the project.

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e) NMDC will provide maintenance sheds with EOT cranes of adequate
capacity, one water connection and electrical points for minor repair of
assemblies and sub-assemblies. The water and electricity charges at
work shed will be on free of cost basis. Suitable lighting facilities in work
shed will be provided on free of cost basis. The fuel filling will be done
by NMDC at its own cost. NMDC to provide all the infrastructure as
mentioned in NIT. The B/D of equipment to be determined at Project
level on case-to-case basis with mutual consent.

f) The other facilities required for carrying out maintenance such as special
tools / tackles, standard tools, service trucks, welding set, battery
charger, compressed air facility, the equipment washing arrangement,
lifting jacks, mobile crane and any other facilities required are to be
arranged by MARC holder. MARC holder will establish and maintain
their own service station fully equipped with service vehicle and
transport truck.
g) MARC holder should arrange Industrial gases on their own. However,
industrial gases, such as Oxygen, Acetylene, Nitrogen etc. can be
provided by NMDC on chargeable basis, provided minimum one week
advance notice is given to arrange the industrial gases.
h) The MARC holder shall arrange their own transportation for their
supervisors & staff.

All other terms and conditions which are applicable for MARC shall
also be a part of the contract.

6.9.3 SPECIAL CONDITIONS PERTAINING TO MARC (MAINTENANCE &

REPAIR CONTRACT)
1 PERSONNEL FOR MARC-HOLDER
i) Within (7) days of the commencement of this agreement, the MARC
holder shall submit to NMDC in writing.
ii) The personnel who shall be project in-charge for the MARC holder
at NMDC mine site. The MARC holder’s Project in-charge and other
maintenance personnel shall have relevant technical qualification
and experience in their respective fields to perform their duties to
discharge the MARC holder’s obligations under this contract.
iii) The MARC holder shall be solely responsible for the safety and
discipline of its personnel as required under safety and other
applicable laws in India in force during the entire term of this
contract.
iv) The personnel deployed by the MARC holder shall adhere to the
rules, regulations and norms stipulated by NMDC’s sit management
at all the times. The MARC holder shall be responsible for any
misconduct of dereliction of duties on part of its personnel.

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v) The MARC holder will indemnify the purchaser against any claim for
compensation made by any personnel of the MARC holder due to
accident, injury, death etc.

2 STATUTORY REQUIREMENT

i) The MARC holder, while performing of its obligation under this

contract, shall comply with the requirements of all the applicable
laws, rules, regulation and byelaws.

ii) The MARC holder shall at their own cost obtain all permits and
licenses necessary for undertaking the activities under this contract
and shall pay all, taxes and fees payable under any law for the time
being in force and during the term of this contract and shall provide
the evidence to NMDC to prove compliance of the legal
requirements as stated above as well as payment of taxes or fees.
iii) The MARC holder shall comply with all the provisions of Labour
Laws including Contract Labour (Regulation and Abolition) Act 1970
& subsequent amendments, and the rules made there under,
Minimum wages Act etc.
iv) Payment of Wages Act, Employees Provident Fund Act etc.
v) During currency of the contract the supplier/ MARC holder shall
abide at all times to all the existing Labour enactments and
regulations made there under, notifications and bye laws of the state
or central Govt. or local authority and any other labour laws
including rules, regulations, bye laws that may be passed or
notification that may be issued under any labour laws, in future
either by the state or by the Central Government or by the local
authority. Notwithstanding the above, the supplier shall keep the
purchaser indemnified in case any action is taken against the
purchaser by the competent authority of the state/ central
Government on account of contravention of any of the provisions of
any act or rules made there under. If the purchaser is caused to pay
or reimburse such amounts as may be necessary to cause or
observe or for non-observance of the provision stipulate in the
above laws, Act, rules etc. The head of the project/ Engineer-
Incharge (Mechanical) shall have the right to recover the amount so
paid from the amount due to the contractor including PBG. The
employees of the contractor in no case shall be treated as the
employees of the purchaser at any point of time.

vi) The MARC holder shall conduct all checks as mandated by

statutory laws and DGMS circulars/ orders and submit the reports to
the concerned NMDC Mine Manager or his representative to their
entire satisfaction.

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3 SAFETY & FIRST AID
The MARC holder shall comply with the statutory requirement in respect
to safety and first aid requirements as per the relevant statutes and shall
in particular.
i) Ensure that their personnel are properly equipped with personal
protective equipment and protective devices and are well versed in
the safety measures required in the mining operation.
ii) Ensure that their personnel follow the safe working practices at all
times in the course of performance of their duties in discharge of
MARC holder’s responsibilities under this contract.
iii) Ensure deployment of persons sufficiently trained in First Aid and
that they are equipped with the first aid facilities at the mine site
throughout the tenure of this contract.
4 INDEMNIFICATION
i) The MARC holder shall indemnify NMDC against all damages and
losses incurred or to be incurred including all expenses by NMDC
due to non-observance of statutory provisions, not obtaining proper
permit/ licenses from appropriate authorities.
ii) The MARC holder shall indemnify NMDC against any claim or
demands made by any employee or labour engaged by the MARC
holder due to any accident or damage caused due to negligence or
carelessness of MARC holder.
5 TOOLS & TACKLES
i) The necessary tools & tackles required for 12 years (MARC Period)
to be arranged by MARC holder. No additional tools or tackles shall
be provided by NMDC.
ii) Laptop 01 No for each project is required for diagnosis/ data down
loading purpose to be arranged by the MARC holder and its timely
replacement/ software upgradation/ repair is also within the scope of
MARC holder.
6 MAINTENANCE OF RECORDS
The following reports are to be generated by the MARC holder and
submit the same to Mechanical Services in-charge of the Project of
NMDC.
i) Equipment Logbook (History sheet) indicating actual working hours
per shift, breakdown hours on account of purchaser and supplier
with reasons for breakdown, maintenance hours, idle hours with
details of spares and consumables usages including lubricants shall
also be recorded. This record shall be maintained jointly by the
representative of NMDC and MARC holders. The logbook shall be
jointly signed on daily basis. This shall be the basis to arrive at
equipment availability and utilization and for making payment
thereof.

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ii) All the equipment will be provided with necessary meters for
recording working hours. It will be the responsibility of the supplier to
keep these meters in working order. For all purpose, i.e. availability
& utilization calculation, preventive/ schedule maintenance etc. hour
meter recording only shall be considered. Equipment shall be
treated as breakdown till the hour meter is replaced.
iii) Monthly records of hours of each of the equipment.
iv) Monthly D/O letter shall be submitted by the end of first week with
details consisting: HMR, hours utilized, break down details, idle
time, down loaded data from the machine with specific parameters,
spares used, cost of spares consumed, lub oil consumed, major
repair cost in detail for our internal records purpose.
v) Maintenance/ repair, service forecast plan of each equipment to be
planned ahead, enabling to achieve the agreed availability of each
equipment.
vi) In case of accidental repair, the instruction from NMDC’s Service
Manager for the procurement of spares, shall be in writing to the
MARC holder. The billing & payment for the spares/ consumables
and service required for the accidental repairs shall be extra at
actuals (beyond the scope of MARC).

NMDC should adhere to the condition of minimum possible travel of

excavator.

In both the cases of accidental repair i.e. operational fault/ maintenance

fault MARC holder shall initiate the procurement to delivery of required
spares/ consumables as instructed by NMDC Service Manager of
Project (without waiting for formal work order/ purchase order from
NMDC, which shall be issued as per NMDC internal process).

7 FORMULA:
Percentage of availability
Production shift hours (-) Break down hours x 100
= ------------------------------------------------------------------
Production shift hours.
Production shift hours = schedule shift hours – scheduled maintenance
hours.
In the above formula, schedule hours for 3 shifts of 8 hours per shift are
to be considered. The schedule maintenance hours shall be two hours
per day including all preventive maintenance on prorate basis.

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8 OUT OF SCHEDULE DURING THE MARC PERIOD

During the 12 years MARC period additional maintenance &
overhauling time shall be granted (during that time the equipment shall
be kept out of schedule). One day out of schedule means 3 shifts. The
breakup for keeping the machine out of schedule for attending major

repair/ scheduled overhauling shall be as below:

S.No MARC Duration Out of schedule

1 In between 4th , 5th and 6th Year 10 days
2 In between 7th , 8th and 9th Year 15 days
3 In between 10th , 11th and 12th Year 20 days

a) The said period shall be allowed only in consultation with MARC In-
charge NMDC and with prior approval. Crane will be provided on
free of charge during the major repair period, subject to availability
of the same at site.

b) If there is any leftover days/ shift is utilized during any slots, that
period shall not be carry forward to subsequent years/ slab.

MARC IS EXTENDABLE FOR FURTHER SUITABLE PERIOD WITH MUTUAL CONSENT.

NOTE:

ABOVE TERMS AND CONDITIONS FOR PERFORMANCE GUARANTEE WITH MARC OF

HEM EQUIPMENT WILL BE CHANGED ON EQUIPMENT BASIS.

6.10 INTERNAL PERFORMANCE IN PQC

NMDC reserves the right to verify the internal performance of the earlier
supplied similar/ higher capacity equipment, in the assessment period as
mentioned in the PQC clause.

The internal performance reports obtained from user departments will be

preferred over the performance reports submitted by the bidder and the
decision of NMDC regarding the techno-commercial evaluation of the offer will
be final.

NOTE:
Above internal performance clause may be incorporated suitably on case to
case basis.

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6.11 PAYMENT TERMS:

6.11.1 Tender enquiries shall clearly stipulate NMDC’s payment terms:

As per latest guidelines available from CVC, NO advance payment terms
are acceptable. Hence, a specific clause in payment terms, stating that “NO
advance payment terms are acceptable”, is required to be indicated in NIT.
No mobilisation advance shall be paid to the contractor.

However, for selected works/ contracts, mobilization advance may be

considered. The specific approval of competent authority is to be obtained
before acceptance of such mobilization advance and equal opportunity is to
be given to all bidders. Such advance shall invariably be interest bearing
supported by bank guarantee, in case of procurement from private
organizations.
6.11.2 Standard payment terms to be incorporated in tender notice and
document shall be as follows:

6.11.3 FOR CAPITAL EQUIPMENTS/ PLANT EQUIPMENT / HEMs

a) 90% amount along with full taxes and duties is payable against delivery
of capital equipment. Balance 10% amount is payable after receipt and
acceptance of the equipment, erection & commissioning supported by
performance bank guarantee, as applicable.
(OR)
b) 90% amount along with full taxes and duties is payable against dispatch
documents through bank, 5% amount is payable after satisfactory
erection & commissioning and trial run of equipment at site supported by
PBG for 10% value, balance 5% amount is payable after successful
completion of Performance Guarantee (PG) test. Erection &
Commissioning and trial run is to be completed within 3 months of receipt
of equipment at site. PG test is to be completed within 3 months of
commissioning.

6.11.4 FOR MOBILE EQUIPMENTS:

i). 5% amount of supply shall be paid against submission of GA Drawings
and Power calculations.
ii). 5% amount of supply shall be paid against submission of unpriced
purchase order copies of bought out items.
iii). 70% amount of supply of payment shall be paid with 100% tax on pro-
rata basis against supply as per approved billing schedule against
dispatch documents.
iv). 15% amount of supply cost will be released after erection &
commissioning and trail run of equipment.
v). Balance 5% amount of supply payment will be made after successful
completion of PG test.

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6.11.5 FOR IMPORT ITEMS
90% amount along with full taxes and duties is payable against FOB/FAS/
CFR/CIF/CIP through bank. Balance 10% amount within 30 days is payable
after receipt and acceptance of the materials & commissioning supported by
performance bank guarantee, as applicable.

6.11.6 FOR ALL OTHER ITEMS

100% amount within 30 days after receipt and acceptance of materials, on
submission of all original documents and PBG (if applicable).

6.11.7 Any payment term other than the above may be stipulated after approval of
Competent Authority on case to case basis, with proper justification.

6.11.8 In case, the Bidders quote different payment terms, other than that stipulated
in the tender conditions, their offer will be liable for rejection.

6.12 DELIVERY TERMS

All indigenous items should be normally procured on FOR destination
basis. In exceptional cases, other delivery terms can be accepted with the
approval of the Competent Authority. However, the same should be
incorporated in the tender documents.
In the tender enquiry against delivery terms, shortest delivery period be
insisted in normal cases. The suppliers should be requested to quote the
shortest delivery. Any delay after the delivery quoted by the supplier will
attract Liquidated Damages.

6.13 LIQUIDATED DAMAGES (LD)

a) Compensation of loss on account of late delivery (actually incurred as
well as notional) where loss is pre-estimated and mutually agreed to is
termed as the Liquidated Damages (LD). Law allows recovery of pre-
estimated loss provided such a term is included in the contract and there
is no need to establish actual loss due to late supply [Maula Bux Vs. UOI
(1970 AIR 1955)].
b) In the event of placement of an order, should the supplier fail to deliver
the stores in full or part thereof within the delivery date including
extended time if any, NMDC shall reserve the right to levy Liquidated
Damages on the supplier at 0.5% of the basic order value (excluding
GST) of the undelivered stores for each week or part thereof of delay
but not exceeding 5% of the basic order value (excluding GST) of such
materials.
c) However, in case of capital items, the liquidated damages amount
should be calculated on the total equipment basic order value (excluding
GST).
d) In case of FOR destination cases, the date of receipt at nearest
transporter’s godown should be taken for calculation of Liquidated
Damages amount. However, in the Purchase Order (FOR destination-
nearest transporter’s godown) should be clearly mentioned.

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e) In case, the Supplier is a consortium, the Employer shall recover the
amount of Liquidated Damages, but not by way of LD, by making
deductions from the account of each member of consortium, up to a
maximum of 5% of the respective basis order value (excluding GST).
However, each member of consortium, will be liable for damages in the
ratio of the respective Purchase Order price.
f) However, the payment of liquidated damages shall not in any way relieve
the Supplier from any of its obligations to complete the PO or from any
other obligations and liabilities of the Supplier under the Purchase Order.

g) The aggregate ceiling on Liquidated damages due to delay in completion of

PO and for non-fulfillment of Performance Guarantee parameters in
accordance with the Purchase Order shall be limited to 10% (ten percent)
of the Purchase Order value, if any, excluding taxes & duties.

h) Any recovery of Liquidated damages shall be affected from the amount

payable to the Supplier against Commissioning, Performance Guarantee
Test, Final Acceptance Certificate and Performance Bank Guarantee.
i) The levy of LD shall be on the final executed value of Purchase Order/
amended value, including escalations (excluding GST) as applicable, of the
PO including additions to scope by way of interim approvals. However, LD
shall not be levied on amount paid under amicable settlement, conciliation
and arbitral awards settled after completion of work.

j) The applicability of LD in each case is to be evaluated & confirmed by

Materials department before processing the case for release of final
payment/ return of PBG. Proper delay analysis should be conducted by
MM dept before submitting the recommendation for levy of LD.

6.14 DENIAL CLAUSE (DC)

“Since delay in delivery is a default by the seller, the buyer should protect
himself against extra expenditure during the extended period by stipulating a
denial clause (over and above levy of LD) in the letter informing the supplier
of extension of the delivery period.

In the denial clause, any increase in statutory duties and/or upward rise in
prices due to the PVC clause and/or any adverse fluctuation in foreign
exchange are to be borne by the seller during the extended delivery period,
while the purchaser reserves his right to get any benefit of a downward
revisions in statutory duties, PVC and foreign exchange rate. Thus, PVC,
other variations and foreign exchange clauses operate only during the
original delivery period”.

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6.15 WARRANTY TERMS
6.15.1 Warranty terms are to be included in all tender enquiries wherever
applicable. The supplier shall warrant that every material to be supplied shall
be free from all defects and faulty materials, bad workmanship. If any defect is
found arising from faulty design, manufacturing defects, faulty materials and
bad workmanship, the supplier shall replace such materials free of cost.
6.15.2 The warranty shall continue notwithstanding the inspections payments made
and acceptance of the tendered stores but shall expire only in accordance
with the Warranty period specified.
6.15.3 Warranty shall be 12/24 months from the date of commissioning or 18/30
from date of dispatch whichever is earlier for capital equipment and for other
items shall be 6/12/18/24/30/36 months as the case may be, but the actual
warranty terms shall be mentioned in NIT on case to case basis after
Competent Authority approval at the time of approval of Rate Enquiry
proposal.
6.15.4 Standard warranty period acceptable for NMDC for select items are as
follows:

Item Category Warranty Period

High value General 12 months from the date of acceptance (or) 18
Items/ Spares months from the date of dispatch, whichever occurs
earlier
HEMM Auxiliary 12 months from the date of commissioning (or) 18
Equipments months from the date of dispatch, whichever occurs
earlier
HEMM Production 24 months from the date of commissioning (or) 30
Equipments / Capital months from the date of dispatch, whichever occurs
Items/ earlier
Plant Mech 24 months from the date of commissioning (or) 30
Equipment (Crushers, months from the date of dispatch, whichever occurs
Apron Feeders etc.) earlier.
Nylon Conveyor belts 30 months from the date of dispatch
Steel Cord Conveyor 36 months from the date of dispatch
belts
OTR radial tyres 5000 hours of operation or a period of 24 months
(27 R 49) from the date of receipt & acceptance whichever is
earlier
TCRR bits Meterage Guarantee for 9 7/8” (251 mm) TCRR Bits
with 6 5/8” (168 mm) API Reg:
1) The batch quantity for evaluation for Meterage
guarantee shall be considered as 10 nos.

2) The Equivalent Very Hard (EQVH) meterage

guarantee of 325 Meters will be considered in
case of Deposit-5 Bacheli complex, 350 meters
will be considered in case of Deposit-10&11A and
550 Meters will be considered in case of Kirandul
Complex.

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6.15.5 Warranty normally should not be linked with number of hours of working
(exceptions include OTR tyres).
6.15.6 In case of HEM / Plant equipment the warranty shall be comprehensive and
also cover all the bought-out items. Normally, warranty period for bought out
component in equipment shall be in line with equipment warranty period.
However, for bought out components, manufacturer’s warranty can be
accepted based on nature of items (like batteries, tyres, electrical parts etc.).
The consumables and wear parts shall be identified in equipment and
warranty for these items shall be stated separately.
6.15.7 Variations in standard warranty terms will attract proportionate loading on
price to a maximum of 5% of the basic cost of the equipment / item. Offer
with Warranty quoted below 12 months from the date of commissioning or 18
months from the date of dispatch shall be rejected.
6.15.8 In case of Proprietary/Single tender/only single acceptable tender, the
stipulation of loading on technical/commercial points does not arise.
6.15.9 It may be ensured that the concerned user after release of Purchase Order,
where erection & commissioning is involved, should plan, and make the site
ready before receipt of the ordered equipment to ensure that the warranty
period does not lapse.

6.16 INSPECTION
a) Tenders are required to indicate the scope of pre-dispatch inspection
facilities available at Supplier works.
b) Initial inspection may be carried out before dispatch at consignee’s
discretion. Inspection schedule shall be drawn well in advance and the
supplier shall give at least 15 days clear advance notice for the
consignee to carry out the pre-dispatch inspection.
c) Bidders are required to submit the Quality Assurance Plan without fail
for carrying out the inspection.
d) In case the inspection is not carried out within 15 days of notice, the
supplier will be informed suitably. Automatic waiver of pre dispatch
inspection is not allowed / permitted.
e) However final inspection of the equipment will be carried out at project site
after receipt and assembly and commissioning of the equipment (even if
pre- dispatch inspection is carried out) which will be final & binding. In
case the equipments / stores supplied are rejected either fully or partly on
account of defects, bad workmanship or other reasons, the supplier will
have to arrange for free replacement of the same up to destination point.
Freight and incidental charges for return of the rejected materials will have
to be borne by the supplier. In case, rejected materials are not collected
after receipt of rejection notice within 60 days, no liability in respect of
loss, damage, deterioration etc. shall lie with the Corporation / Company.

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6.17 BOUGHT OUT ITEMS
A list of important bought out items that go into main equipment along with
their make and original manufacturer should be given in Technical Bid of the
tender. The comprehensive warranty should cover all bought out items also.
“Equivalent “/ “Any reputed” makes of bought out components are not
acceptable.
General arrangement drawings with overall dimensions and description of
various important components of the equipment included in the ‘scope of
work’ shall be furnished.
The successful Bidder is required to provide 2 sets or soft copy of
fabrication/manufacturing drawings and technical specifications of the entire
major fast wearing consumable items, wherever applicable. The list of major
fast wearing consumable items may be spelt out in the offer.

6.18 AFTER SALE SERVICES

The after-sales-service facilities and availability of spares during lifetime of

equipment i.e., within warranty period and beyond warranty period are to be
indicated. Confirmation shall be sought w.r.t after sales service which shall
be provided outside the warranty period also. Bidder should also confirm to
depute Service Engineer at working site during warranty period of the
equipment at regular interval. Full address of the location from where after
sales service facility is to be provided may be indicated. Sufficient proofs of
having competent and adequate technical staff for after sales service should
be furnished with the offer as per the format enclosed Annexure 6-II (P-235).

6.19 PURCHASE UNDER OPTION CLAUSE

In case of long running, yearly procurements, to take care of any change in

the requirement during the currency of the contract, a plus/ minus option
clause upto 30% may be incorporated in the tender enquiries and the
resultant contracts, reserving NMDC’s right to increase/decrease the quantity
of the required goods up to that limit without any change in the terms and
conditions and prices quoted by the Bidders.

The clause may be framed along following lines:

“NMDC reserves the right to increase/ decrease the ordered quantity up to 30 %

(Thirty) for the required goods without any change in the terms and conditions and
prices quoted by the bidder at any time, till final delivery date (or) extended delivery
date of the contract, by giving reasonable notice even if the quantity ordered initially
has been supplied in full before the last date of the delivery period (or) the extended
delivery period”.

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6.19.1 CONDITIONS GOVERNING OPERATIONS OF OPTION CLAUSE
With the provision of the option clause, coverage for plus/ minus upto 30%
quantity can be made in full or by parts at the time of placement of contract
or anytime during the currency of contract.

Coverage under option clause can be made with the approval of the
Competent Authority as per extant DoP within whose power the value of the
fresh purchase falls and not with the reference to the contract value where
option is available for utilization.

Where parallel contracts on multiple suppliers are available, care should be

taken in exercising the option clause, so that the original tender decision of
splitting quantities and differential pricing is not upset or vitiated. Other things
being equal, the supplier with the lower rate should first be considered for the
option quantity.
The quantum of the option clause will be excluded from the value of tenders
for the purpose of determining the level of Competent Authority in the original
tender.

a) There should be no option clause in development orders / trial

orders.

b) There should be no declining trend in the price of the stores as

evidenced from the fact that no order for the items has since been placed
at lower rates and no tender with offers for the items at lower rates has
been opened since the time, even if not finalized.

c) While exercising option clause plus / minus upto 30% quantity, a

reasonable delivery schedule for the enhanced order quantity should be
stipulated in the relevant amendment to the contract. If not already agreed
upon, the delivery period shall be fixed for the additional quantity on the
lines of the delivery period in the original order. This will satisfy the
requirement of giving reasonable notice to the supplier to exercise the
option clause.

6.20 BUY BACK OFFER

When it is decided to replace an existing old item(s) with a new/better
version, the Department may trade the existing old item while purchasing the
new one by issuing suitable bidding documents for this purpose.
The condition of the old item, its location and the mode of its handing over to
the successful bidder are also to be incorporated in the bidding document.
Further, the bidder should be asked to quote the prices for the item (to be
offered by them) with rebate for the old item and also, without any rebate (in
case they do not want to lift the old item).
This will enable the Department either to trade or not to trade the old item
while purchasing the new one (Rule 176 of GFR 2017).

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6.21 LIMITATION OF LIABILITY

Tender document shall include the limitation of liability clause as follows: Except in
cases criminal negligence of willful non-performance or willful default,
a) The Supplier shall not be liable to the NMDC, whether in Purchase Order,
tort, or otherwise, for any indirect or consequential loss or damage, loss of
use, loss of production, or loss of profits or interest costs and
b) The aggregate liability of the Supplier to the NMDC, whether under the
Purchase Order, in tort or otherwise including the cost of repairing or
replacing defective equipment, shall not exceed the 100% (Hundred
Percent) of the Purchase Order price plus escalation if applicable as per
Purchase Order, provided that this limitation shall not apply to any
obligation of the Supplier to indemnify the NMDC with respect to copyright,
patent infringement, workman compensation and statutory liabilities in
general that the NMDC may be required to additionally bear due to default
of the Supplier.
c) The aggregate liability of the NMDC to the Supplier, whether under the
Purchase Order, in tort or otherwise, at any point of time during the
execution, performance of the Purchase Order, shall not exceed the total
Purchase Order Price less payments already released to the Supplier. In
any event, the liability of the NMDC to the Supplier shall not exceed 100%
of the Purchase Order Price plus escalations.
d) However, any amount recoverable from the supplier under Risk & Cost
shall not be restricted by the provision for Limitation of Liability.

6.22 FORCE MAJEURE CONDITIONS

A Force Majeure clause in the contract relieves both the parties from
contractual lability, when prevented by events such as restrictions faced during
covid from fulfilling their obligations under the contract. Force Majeure clause
does not excuse the parties from non-performance entirely, but suspends it for
the duration of Force Majeure. Accordingly, the firm/contractor has to give
notice of Force Majeure as per contract and within the duration specified in the
contract (i.e. it cannot be claimed ex-post facto).

In-order to facilitate handling of Force Majeure situation in the ongoing

contracts of NMDC (i.e. the contracts which are yet to be formally closed)
where-in, the performance of contract has been affected by Force
Majeure event, and the contractor(s) have served notice(s) of Force
Majeure as per contract for the reasons of Covid-19 situation, it has been
decided to consider the following periods under the Force Majure Condition:

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1) For 1st wave of Covid-19 pandemic (i.e. from 25.03.2020 to 30.06.2020 –
98 days).

a) In the instances of invocation of Force Majeure by the Contractor

during the above period, wherever the contract was in-force/execution
as on 20.02.2020(as per OM – dt 13.05.2020), Extension of Time will
be granted to Contractual Completion Date without imposition of
LD (with respect to time of completion), and without alteration in price
schedule.

b) The exact period will be decided based on the specific circumstances

of the case and the period for which performance was affected by the
Force Majeure events due to lockdown situation or restriction imposed
on account of Covid-19, which will also be applicable for period beyond
30.06.2020. However the period for Extension of Time shall not be less
than 3 months and not more than 6 months.

2) For 2nd wave of Covid-19 pandemic (i.e. from 01.04.2021 to 30.06.2021-

91 days)
a) In the instances of invocation of Force Majeure by the Contractor, in
cases where in the contract was in-force/execution as on 01.04.2021,
Extension of Time will be granted to Contractual Completion Date
without imposition of LD (with respect to time of completion), and
without alteration in price schedule, for the period, from the date of
invocation of Force Majeure (i.e. on or after 01.04.2021) not exceeding
beyond 30.06.2021.
Additional guideline which needs to be complied for handling the
matters related to Force Majeure:

1) Determination of an event as Force Majeure: It needs to be identified if

the event or circumstance that is being claimed, falls under a ‘force
majeure’ condition. This could be based, either on the already identified
events of force majeure mentioned in the particular contract or cases
where either party is directly prevented, hindered or delayed from or in
performing any of its obligations under the Contract by an event of Force
Majeure resulting from any unforeseeable / unavoidable circumstances
beyond the reasonable control of the parties to the contract. The same
may be substantiated with Government Orders (i.e. restrictions imposed
under any Act or executive order released by State/Central Government,
as done during the period Covid-19 pandemic) declaring force majeure
condition, wherever possible.

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2) Analysis of Contractual provisions (Awarded/ongoing Contracts): In case of
occurrence of a Force Majeure event, and the contract has provisions for grant of
“Extension of Time for Completion” under Force Majeure clause, then “Extension
of Time for Completion” can be provided to the contractor, for a duration which
has been mutually agreed/accepted by Contractor and Employer, as the duration
of Force Majeure.

However, in order to assess the duration of Force Majeure, the Contractor shall
submit to the Engineer, a notice of claim for ‘Extension of Time for Completion’
with-in the duration specified in the contact (e.g. with-in 14 days as specified in
SBD turnkey), together with particulars of the event or circumstance justifying
such extension. As soon as reasonably practicable, after receipt of such notice
and supporting particulars of the claim, the Employer and the Contractor shall
mutually agree upon the period of such extension.

Further, a Delay event due to Force Majeure is an excusable delay in which

extension of time can be granted without levying LD and any delay or non-
performance by either party of the Contract caused by the occurrence of any
event of Force Majeure shall not constitute a default or breach of the Contract
(Ref: Manual for procurement of works – page no 92 – enclosed as Annexure-I).

There are 4 categories of delays which are Excusable delay, Compensable

delay, Inexcusable delay (contractors’ own fault) and Concurrent delay. The
Force Majeure falls under the category of Excusable delay, hence ‘Extension of
Time for completion’ can be provided without imposition of LD.

Price variation is payable in cases of Compensable delay or in some cases of

Concurrent delays. The Force Majeure situations are beyond the reasonable
control of employer and contractor(s) and the same falls under the category of
Excusable delay, however if the performance of contract is substantially
prevented, hindered or delayed for a period more than 90 days on account of FM
during the currency of the contract, the parties may develop a mutually
satisfactory solution as per the contract.

3) Payment of PV during the period of Force Majeure for Future

Tenders/Contracts: The Manual for procurement of works indicated (Ref 6.5.6 –
(g) – page no. 101– enclosed as Annexure-II) that “price variation may be
allowed beyond the original schedule delivery date, by specific alteration of the
date through an amendment to the contract in cases of force majeure or defaults
by Government”, hence PVC may be made applicable during the period of Force
Majeure for which suitable provision may be made in future tender
documents/contracts.

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Considering the above provision mentioned in the manual, suitable clause may
be inserted in the future contracts of NMDC to facilitate payment of Price
Variation during the period of Force Majeure, under the following circumstances:

S.N Duration Remarks

In case of contracts
Where the progress of work has been
with original
hampered due to Force Majeure conditions,
completion period of
the payment of PV may be permitted if the
12 months or less,
a cumulative impact of FM is more than 15
but total duration
days against such work; however, PV shall
exceeds 12 months
be paid in such instance for the period of
after grant of
FM beyond initial 15 days
extension(s).

Where the progress of work has been

In case of contracts hampered due to Force Majeure conditions,
with original the payment of PV may be permitted if the
b completion period of cumulative impact of FM is more than 30
more than 12 days against such work; however, PV shall
months be paid in such instance for the period of
FM beyond the initial 30 days.

NOTE:

i) Before processing the case for approval, the Employer & Contractor with
involvement of package consultant (if any) will create a suitable document
which shall be signed by either party after obtaining approval of Competent
Authority of the Employer (post concurrence by Law and Finance
departments, as per extant procedures) The document shall explicitly state
that, contractor shall have no other claims whatsoever for the period of Force
Majeure (other than those specifically provided in the contract) in order to be
entitled for payment of PV in the above instances.

ii) The proposed payment of PV on account of FM shall not breach the

maximum limit defined in the Contract (15% as per current standard terms of
NMDC).

iii) FM delay shall always supersede other concurrent delay during the total
contract period (i.e., both employer delay plus contractor delay).

iv) For all future contract/tender FM delay is to be treated as initial delay (before
employer delay while doing delay analysis). – brief illustration on this is
enclosed as Annexure-III.

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v) In cases where the contract has entered the FM period for the reasons
(i.e. delays) only attributable to contractor (i.e. NIL delay on account of
employer for entire contract completion period) PV shall not be paid to
the contractor for FM period.

vi) The above clause may also be incorporated suitably in future tenders/
contracts.

4) Before the release of any payment on account of Force Majeure by NMDC

(including Price Variation payment), the contractor has to submit an
undertaking / agreement, stating that no other claims, whatsoever, will be
made by them in respect to the said contract, for the duration which has
been considered under Force Majeure and for which the mutually agreed
solution has been accepted by both the parties. Further contractor in the
undertaking shall also confirm that they fully understand that NMDC is not
liable for any delays in execution of work/delay in release of payment, on
account of Force Majeure.

5) Procedure for processing the case of Force Majeure (for ongoing &
future contracts): The Contractor has to submit the notice on account of
Force Majure as per contract and with-in the duration specified in the
contract (viz it cannot be claimed ex-post facto). However, as indicated
above, in order to assess the duration of Force Majeure, the Contractor
shall submit to the Engineer, a notice of claim for Extension of Time for
Completion with-in the duration specified in the contract, together with
particulars of the event or circumstance justifying such extension. As soon
as reasonably practicable, after receipt of such notice and supporting
particulars of the claim, the Employer and the Contractor shall mutually
agree upon the period of such extension. The same will be put-up for
approval of Competent Authority for a suitable decision/approval.

In order to mutually decide upon the Extension of Time for Completion, user
dept will obtain approval of Executing Authority/HoP(s), to formulate a
project level committee, consisting of member from User dept.,
Contracts/Materials dept., Finance dept. and Consultant (if any), to discuss
with contractor and arrive at agreeable period for ‘Extension of time for
completion’ on account of Force Majeure. Methodology on these lines
may be adopted also for treatment of instances of partial execution of
contract during FM Period.

Post agreement with contractor(s), regarding the period for “Extension of

time for completion” on account of Force Majure, proposal may be put-up
for approval of Competent Authority, after obtaining undertaking from the
contractor, post legal vetting and concurrence by Finance dept.

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In addition to above, post sanction of proposal by Competent Authority
regarding “Extension of time for completion” revised L2 schedule/work
program shall be submitted by contractor in-line with the approved
extension and same shall be approved by consultant/employer. Regular
payment as per contract, shall be released by NMDC, to the extent
possible, during the force majeure period.

In the event that the Contractor does not accept the Employer's estimate of
a fair and reasonable time extension along with price variation amount, the
Contractor shall be entitled to refer the matter for Conciliation and
Arbitration, as per provision of the contract.

6) As delay event due to Force Majeure is an excusable delay in which

extension of time can be granted without levying LD and payment of
Price Variations, hence the Approving Authority for acceptance of FM
requests is the Original Approving Authority for award of the Contract,
else the next higher authority as per value of contract in case of any upward
revision in the contract value beyond the delegated threshold limit of original
approving authority.

7) Invocation of FM does not absolve all the non-performance of Contractor

towards the contract, but only in respect of such non-performance(s) which
are attributed to Force Majeure situation. Further the invocation of FMC
would be held valid only in situations where the Contractor(s) have not
already defaulted their contractual obligations at any point of time towards
performance of the contract in the manner, which has led to termination of
the contract.

6.23 SETTLEMENT OF DISPUTES

APPLICABLE LAW, AMMICABLE SETTLEMENT, CONCILIATION AND
ARBITRATION:

6.23.1 APPLICABLE LAW:

This Agreement shall be construed and governed in accordance with the Indian
substantive Laws.

6.23.2 AMICABLE SETTLEMENT:

6.23.2.1 If any dispute arises between the NMDC and Supplier as specified in Purchase
Order, the parties shall seek to resolve any such dispute or difference by mutual
consultation/ amicable settlement process. The Supplier shall notify the NMDC
of its intent to initiate an amicable settlement process within a period of 30 days
from the date of notification of NMDC’s/ Engineer’s estimate of Supplier’s claim.

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For Purchase Orders where Integrity Pact is applicable and in case both the
parties are agreeable, dispute may be tried to settle through mediation before
the panel of IEMs in a time bound manner i.e. not more than five sittings.

The prevailing sitting fee of IEM as per Company rules shall be shared
equally by the parties and expenses on travel and stay arrangements of
IEMs, which shall be equal to that of Independent Board Member of NMDC,
shall be shared equally.
6.23.2.2 If the parties fail to resolve such a dispute or difference by mutual
consultation, then the dispute may be settled through Conciliation / Arbitration
/ other remedies available under the applicable laws.
6.23.3 CONCILIATION
6.23.3.1 If the parties fail to settle the disputes through amicable settlement process,
the parties shall take recourse to the conciliation proceedings for resolving
such dispute, question, claim or differences.
6.23.3.2 A party (“claimant”) shall notify the other party (“respondent”) in writing about
such a dispute it wishes to refer for Conciliation within a period of 30 days
from the date of closing of Amicable Settlement process or 90 days from date
of notification of NMDC’s/ Engineer’s estimate of Supplier’s claim. Such
Invitation for Conciliation shall contain sufficient information as to the dispute
to enable the other party to be fully informed as to the nature of the dispute,
amount of the monetary claim, if any, and apparent cause of action.
6.23.3.3 The conciliation process shall be initiated by appointment of a Sole
Conciliator or Conciliatory Committee. The Conciliatory Committee shall
comprise of either Sole Conciliator or Conciliatory Committee comprising of
three members, one member from each category i.e., Technical, Commercial
and Legal. Conciliatory Committee shall be formed from the panel of experts
maintained by NMDC. CMD, NMDC shall suggest three names to the
Supplier to constitute the Conciliatory Committee within 30 days of receipt of
notice for conciliation. The Supplier shall submit the consent for Conciliatory
Committee within 14 days of receipt of recommendation from NMDC.
6.23.3.4 The selection of Sole Conciliator or the Conciliatory Committee shall be
decided based on the claim amount and guidance on the same is provided
below. Number of conciliators depending on the claim amount is detailed in
the table below:
Claim Amount (excluding Interest) Number of Conciliator/s
Upto Rs. 2 crores Sole Conciliator to be appointed
Above Rs. 2 crores up to Conciliatory Committee to be
Rs. 250 Crores appointed

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6.23.3.5 The above committee shall conduct the conciliation proceedings in
accordance with the provisions of Arbitration and Conciliation Act 1996 and its
amendment thereof. The venue of the conciliation shall be at Hyderabad.
6.23.3.6 In the case of any vacancy the CMD, NMDC shall suggest name(s) for
substitution on the Conciliatory Committee. The Supplier shall submit the
consent within 14 days. Failure of Supplier’s consent within 14 days shall be
considered as deemed acceptance of the suggested member(s) by the
Supplier.
6.23.3.7 Upon constitution of the Conciliatory Committee, Law Department of NMDC
will issue the appointment letters to Conciliatory Committee members and
inform same to the parties concerned.
6.23.3.8 The Conciliatory Committee members shall give a declaration of
independence and impartiality (in the format at Annexure- I) to both the parties
before the commencement of the Conciliatory Committee proceedings.
6.23.3.9 Conciliator’s Fee (As per SCOPE Forum for Conciliation `& Arbitration –
SFCA): Each Conciliator’s fee will be fixed with regard to the amount in
dispute including determined interest in each case to be shared equally by the
parties as under;
Up to Rs. 5 Lakhs Rs.30,000/-
From Rs.5 Lakhs one Rs. 30,000/- + Rs.2000/- per lakh or part thereof subject
to Rs. 25 Lakhs to a ceiling of Rs. 70,000/-
From Rs.25 Lakhs Rs. 70,000/- + Rs.2000/- per lakh or part thereof subject
one to Rs. 1 Crore to a ceiling of Rs. 2,22,000/-
From Rs. 1 Crore one Rs. 2,20,000/- + Rs.30,000/- per Crore or part thereof
to Rs. 5 Crore subject to a ceiling of Rs. 3,40,000/-
From Rs. 5 Crore one Rs. 3,40,000/- + Rs.25,000/- per Crore or part thereof
to Rs. 10 Crore subject to a ceiling of Rs. 4,65,000/-
From Rs. 10 Crore Rs. 4,65,000/- + Rs.20,000/- per Crore or part thereof
one to Rs. 50 Crore subject to a ceiling of Rs. 12,65,000/-
Over Rs. 50 Crore Rs. 12,65,000/- + Rs.10,000/- per Crore or part thereof
subject to a ceiling of Rs. 25 lakh

In addition to the above, each Conciliator will be entitled to receive fee for
study of the pleadings, case material, writing of the award etc. With regard to
the amount in dispute in each case to be shared equally by the parties as
under:
Up to Rs. 5 Lakhs Rs.10,000/-
From Rs.5 Lakhs one to Rs. 25 Lakhs Rs. 20,000/-
From Rs.25 Lakhs one to Rs. 1 Crore Rs. 30,000/-
From Rs. 1 Crore one to Rs. 5 Crore Rs. 40,000/-
From Rs. 5 Crore one to Rs. 10 Crore Rs. 50,000/-
From Rs. 10 Crore one to Rs. 50 Crore Rs. 60,000/-
Over Rs. 50 Crore Rs. 70,000/-

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Note 1: In the event where the dispute does not involve monetary claim or
disputed amount has not been quantified / indicated Conciliator’s fee
will be consolidated Rs 1.00 Lakh inclusive of fee for study of the
pleadings, case material and writing of the award etc.

Note 2: In the event where the dispute does not involve monetary claim or
disputed amount has not been quantified / indicated, administrative
fee will be Rs. 65,000/-

Note 3: In the event, the Conciliation Committee is of a sole Conciliator in

place of three or more Conciliators, he shall be entitled to receive an
additional amount of 25% on the fee payable as per the table set out
above.

6.23.3.10 Upon acceptance of the invitation to conciliate, the respondent shall submit its
counter claim, if any, within a period as specified by the Conciliatory
Committee.

6.23.3.11 The parties may consider filing their claims and counterclaims with details as
mentioned below. However more details may be requested during the
Conciliation process by either party or by Conciliatory Committee which needs
to be complied with promptly:
a) Chronology of the dispute
b) Brief of the Purchase Order
c) Brief history of the dispute
d) Issues
e) Details of Claim(s)/Counter Claim(s) supported by documents and other
evidence deemed appropriate
f) Basis/Ground of claim(s)/counter claim(s) (along with relevant clause of
Purchase Order
g) At any stage of the conciliation proceedings the conciliator or Conciliatory
Committee may request a party to submit to him such additional
information as he deems appropriate.
6.23.3.12 Conciliatory Committee will commence its meetings only after completion of
the pleadings.
6.23.3.13 The parties shall be represented by their in-house employees/executives. Ex-
officers of NMDC who have handled the dispute matter in any capacity are not
allowed to attend and present the case before Conciliatory Committee on
behalf of Supplier. However, ex-employees of parties may represent their
respective organizations.

6.23.3.14 Solicitation or any attempt to bring influence of any kind on either Conciliatory
Committee Members or NMDC is completely prohibited in conciliation
proceedings and NMDC reserves the absolute right to close the conciliation

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proceedings at its sole discretion if it apprehends any kind of such attempt
made by the Supplier or its representatives.
6.23.3.15 Conciliator or Conciliatory Committee as the case may be, shall do detailed
analysis of claims based on the pleadings and contentions of the parties, and
make a proposal for settlement to both the parties with possible terms of
settlement. Both the parties shall submit their respective consent or objections
to the Conciliator or the Conciliatory Committee within the time limit prescribed
by the Conciliator or Conciliatory Committee. Considering the response of the
parties, the Conciliator or Conciliatory Committee shall attempt to bring about
Conciliation between the Parties. Thereafter, the Conciliator or Conciliatory
Committee based on the outcome of such an attempt make its final report of
Conciliation or failure as accepted by the parties and submit it to CMD,
NMDC. Both parties may give effect to the Conciliation Report at the earliest.
6.23.3.16 Parties shall not claim any interest on claims/counterclaims from the date of
notice invoking conciliation till execution of settlement agreement, if so arrived
at. In case, parties are unable to reach a settlement, no interest shall be
claimed by either party for the period from the date of notice invoking
conciliation till the date of Conciliatory Committee recommendations and 30
days thereafter in any further proceeding.

6.23.3.17 Either party shall refer any dispute for Arbitration or judicial proceedings if the
conciliation process has failed.
6.23.3.18 Confidentiality: The Conciliator or Conciliatory Committee and the parties
must keep confidential of all matters relating to the conciliation proceedings.
Confidentiality extends also to the settlement agreement, except where its
disclosure is necessary for purposes of its implementation and enforcement.

6.23.4 ARBITRATION:
6.23.4.1 All disputes or differences which may arise between the NMDC and Supplier
in connection with this Purchase Order (other than those in respect of which
the decision of any person is expressed in the Purchase Order to be final and
binding) and Excepted Matters, shall, after written notice by either party
(“claimant”) within sixty (60) days of failure of conciliation to the other
(“respondent”) and to the Chairman cum managing Director of the NMDC Ltd.
(who will be the appointing authority), be referred for adjudication to the sole
or three (3) Arbitrator(s) to be appointed as hereinafter provided. The notice
invoking arbitration shall specify all the points of disputes with details of the
amount claimed to be referred to arbitration at the time of invocation of
arbitration and not thereafter. If the claim is in foreign currency, the claimant
shall indicate its value in Indian Rupee for the purpose of constitution of the
arbitral tribunal.

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6.23.4.2 A person of any nationality may be an arbitrator, unless otherwise agreed by
the parties. Appointment of sole arbitrator or 3 arbitrators shall depend on the
claim value as defined below:
Claim Amount (excluding Interest) Number of Arbitrator/s
Claim Amount – upto 25% of Purchase Order
value (Above claim amount shall be within the Sole Arbitrator to be
limits of Rs. 50 Lakhs and up to Rs. 5 crores) appointed
Claim Amount – upto 25% of Purchase Order
value (Above claim amount shall be within the 3 Arbitrators to be
limits of Rs. 5 crores and upto Rs. 100 crores) appointed

Refer clause No. 6.23.4.7 for claim amount exceeds the above referred
percentage of 25% of Purchase Order value or maximum value of total claim
value of Rs.100 crores.

6.23.4.3 Appointment of Sole Arbitrator:

The Appointing Authority will send within ninety days of receipt of the notice
of arbitration a panel of three names of persons, not directly connected with
the work, to the Supplier who will select any one of the persons named to be
appointed as a sole Arbitrator and intimate its selection within 30 days of
receipt of names. If the appointing authority fails to send to the Supplier the
panel of three names, as aforesaid, within the period specified, the Supplier
shall send to the appointing authority a panel of three names of persons who
shall also be unconnected with the organization by which the work is
executed. The appointing authority shall on receipt of the names as aforesaid
select any one of the persons named and appoint him as the sole Arbitrator. If
the appointing authority fails to select the person and appoint him as the sole
Arbitrator within 30 days of receipt of the panel and inform the Supplier
accordingly, the Supplier shall be entitled to invoke the provisions of the Indian
Arbitration and Conciliation Act 1996 as amended from time to time.

6.23.4.4 Appointment of 3 Arbitrators:

In case of 3 Arbitrators one arbitrator shall be selected by each party and

notified the other party within a period of 30 days from the notice of invoking
arbitration. The two individual selected arbitrators shall then select the 3rd
Arbitrator, who shall be the presiding arbitrator, within additional period of 30
days. All the three Arbitrators selected as aforesaid shall be independent. If a
party fails to appoint an arbitrator within thirty days from the receipt of a
request to do so from the other party; or the appointed arbitrators fail to agree
on the presiding arbitrator within thirty days from the date of their appointment,
the appointment shall be made, upon request of a party.

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6.23.4.5 The fees of Arbitrators will be guided by Schedule IV of Arbitration and
Conciliation Act, 1996 and any amendment thereof or both the parties can
negotiate on the Fees before the commencement of Arbitration proceedings.

6.23.4.6 The further progress of any work under the Purchase Order shall unless
otherwise directed by the NMDC / Engineer continue during the arbitration
proceedings and no payment due or payable by/to the NMDC shall be
withheld on account of such proceedings. It shall not be open to arbitrator to
consider and decide whether or not such work shall continue during the
arbitration proceedings.

The arbitral tribunal shall give reasons for its award. Each party shall bear its
own cost and the cost of arbitration shall be equally borne by each party. The
award rendered in any arbitration hereunder shall be final and binding upon
the parties. The parties agree that neither party shall have any right to
commence or maintain any suit or legal proceeding concerning any dispute
under this agreement until the dispute has been determined in accordance
with the arbitration proceeding provided for herein and then only to enforce or
facilitate the execution of an award rendered in such arbitration.

6.23.4.7 Notwithstanding anything above, the mechanism for settling the dispute
through Arbitration may be considered in cases where the disputed amount
or the amount of all claims put together does not exceed 25% of the
Purchase Order value or maximum of disputed claim amount shall not
exceed Rs.100 crores whichever is lower. In case the disputed amount
exceeds the above referred percentage of 25% of Purchase Order value or
maximum value of total claim value of Rs.100 crores, the parties shall be
within their rights to take any other recourse / remedies that may be available
to them under the applicable laws other than Arbitration also after providing
prior intimation to the other party.

6.23.4.8 Parties agree that neither party shall be entitled for any pre-reference or
pendente-lite interest, i.e. date of cause of action till the date of the Award by
the Arbitral Tribunal. Parties agree that claim for any such interest shall not be
considered and shall be void. The Arbitral Tribunal shall have no right to
award pre-reference or pendente-lite interest in the matter.

6.23.4.9 The laws applicable to the Purchase Order shall be the laws in force in India.
The Courts of Hyderabad, Telangana State shall have exclusive jurisdiction in
all matters arising under this Purchase Order. The seat, place and venue of
the arbitral proceedings shall be Hyderabad, Telangana State, India.

6.23.4.10 "In the event of any dispute or difference relating to the interpretation and
application of the provisions of commercial Purchase Order(s) between

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Central Public Sector Enterprises (CPSEs)/ Port Trusts inter se and also
between CPSEs and Government Departments/Organizations (excluding
disputes concerning Railways, Income Tax, Customs & Excise Departments),
such dispute or difference shall be taken up by either party for resolution
through AMRCD as mentioned in DPE OM No. 4(1)/2013-DPE(GM)/FTS-
1835 dated 22-05-2018 or any additional notifications / guidelines thereof by
Ministry of Heavy industries and Public Enterprises or Ministry of Steel.

6.23.4.11 Arbitration in respect of Purchase Orders, with foreign parties for value of
more than Indian Rs. 50 lakhs and up to Indian Rs. 50 crores shall be
governed by the Rules of Indian Council of Arbitration (ICA). Arbitration with
foreign Supplier or in consortium Purchase Orders (including foreign
Supplier), where the Purchase Order value is more than Indian Rs. 50 crores
shall be governed by the Rules of Arbitration of International Chamber of
Commerce (ICC), Paris. The seat, place and venue of the arbitral
proceedings shall be Hyderabad, Telangana State, India.

6.23.4.12 Parties further agree that following matters shall not be referred to
Conciliation and Arbitration;

a. Any claim, difference or dispute relating to, connected with or arising out of
NMDC’s decision to initiate any proceedings for suspension or banning, or
decision to suspend or to ban business dealings with the Bidder/Supplier
and /or with any other person involved or connected or dealing with bid/
Purchase Order/ bidder/ Supplier.

b. Any claim, difference or dispute relating to, connected with or arising out of
NMDC’s decision under the provisions of Integrity Pact executed between
the NMDC and the Bidder/ Supplier.

6.23.4.13 The applicable interest on arbitral award i.e., from the date of award till the
date of actual payment, shall be @ daily average of SBI MCLR + 1%.

6.24 INTEGRITY PACT (IP)

Based on the guidelines issued by Government to streamline the
procurement process and aid in curbing graft in Public Procurement,
Transparency International India advocated the adoption of Integrity Pact in
2003 as an Anti-Graft Tool to make contracting process more transparent.
With the view to curb graft in Public Procurement, CVC during December
2007 has recommended the adoption of Integrity Pact in all major
procurement of Central PSUs.

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The Integrity Pact establishes mutual contractual rights and obligations
for the reduction & elimination of corruption. It covers all contract related
activities from pre selection of bidders, bidding, contracting,
implementation, completion and operation. Integrity Pact contains
commitment to the effect that neither side will pay, offer demand or
accept bribes, or collude with competitors to obtain the contract, or while
carrying it out. Besides, bidders are required to disclose all commissions
and similar payments made by them to anybody in connection with the
contract. Sanctions will apply in case violations occur.

In order to improve the credibility of contracting procedures and

administration in general, the signing of Integrity Pact, beyond a
threshold value defined by the organization is required to build up
confidence and trust between the bidders and the organization. Integrity
Pact clarifies the rules of the game for bidders and establishes a level
playing field.

The Integrity Pact can be (a) by way of a clause with a tender document (b)
a separate contract or (c) an Integrity Pledge. Integrity Pact ensures
clean operations on the part of contract and public officials during the
execution of the project and provides enhanced access to information,
increasing the level of transparency in public contract, confidence and
trust in public decision making, less litigation over procurement process
and more bidders competing for contract. In case of any dispute, the
Independent External Monitors (IEM) can independently study the
dispute and resolve / recommend the actions for review / acceptance to
the management.

6.24.1 IMPLEMENTATION OF INTEGRITY PACT PROGRAMME IN NMDC LTD

a) With an objective of improving transparency in public procurement

and contracts, NMDC Ltd. has entered into MOU with Transparency
International India for implementation of Integrity Pact Programme on
24th September 2007.
b) For covering the majority of the procurements, initially in 2007, the
threshold values for entering into the Integrity Pact for procurements
was fixed at Rs.15.00 crores which was subsequently revised to
Rs.10.00 crores from 2009 and was subsequently to Rs.1.00 crore.
The threshold value as decided from time to time will be considered for
compliance.
c) Review meetings with IEMs are to be held on quarterly basis.
The format of the Integrity Pact and the certificate to be signed by the
Bidder / contractor and to be enclosed along with the offer is at
Annexure 6-III (P-236) and to be submitted/ uploaded in Technical Bid
by firm duly signed or e-signed with DSC & sealed by the Authorized
person. After receipt of Integrity Pact format, it must be duly signed by
MM dept executive.

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The Pre-bid Integrity Pact is a tool to help Governments, business and

civil society to fight corruption in public contracting. It binds both buyers
and sellers to ethical conduct and transparency in all activities from pre-
selection of bidders, bidding and contracting, implementation, completion
and operation related to the contract. This removes insecurity of Bidders,
that they themselves may abjure Bribery, but their competitors may resort
to it and win contract by unfair means.

“The pact essentially envisages an agreement between the prospective

vendors/ bidders and the buyer, committing the persons/ officials of both
sides, not to resort to any corrupt practices in any aspect/ stage of the
contract. Only those vendors/ bidders, who commit themselves to such a
Pact with the buyer, would be considered competent to participate in the
bidding process in other words, entering into this Pace would be a
preliminary qualification.

6.24.2 THE ESSENTIAL INGREDIENTS OF THE PACT INCLUDE

1) Promise on the part of the NMDC to treat all bidders with equity
and reason and not to seek or accept any benefit, which is not
legally available;

2) Promise on the part of bidders not to offer any benefit to the

employees of the NMDC not available legally and also not to
commit any offence under Prevention of Corruption Act, 1988 or
Indian Penal Code 1860; or The Bharatiya Nyaya Sanhita, 2023 (which
repeals the Indian Penal Code 1860 vide Lok Sabha bill dtd: 11.08.2023.

3) Promise on the part of Bidders not to enter into any undisclosed

agreement or understanding with other bidders with respect to
prices, specifications, certifications, subsidiary contracts, etc.;
4) Undertaking (as part of Fall Cluse) by the Bidders that they have
not and will not sell the same material/ equipment at prices lower
than the bid price;
5) Foreign bidders to disclose the name and address of agents and
representatives in India and Indian Bidders to disclose their foreign
principals or associates;

6) Bidders to disclose the payments to be made by them to agents/

brokers or any other intermediary;
7) Bidders to disclose any past transgression committed over the
specified period with any other company in India or Abroad that
may impinge on the anti-corruption principle;
8) Integrity Pact lays down the punitive actions for any violation;

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9) Integrity Pact (IP) would be implemented through a panel of

independent External Monitors (IEMs): shall be appointed by the
organization in consultation with Central Vigilance Commission. Names and
contract details of the Independent External Monitor(s) should be listed in
Notice Inviting Tender(NIT).The IEM would review independently and
objectively, whether and to what extent parties have complied with their
obligations under the Pact, Government of India organizations and Public
Sector undertakings desirous of implementing integrity Pact are required to
select at most three persons (below the age of 70 years) of high Integrity
and reputation as Independent External Monitors (IEM) after due diligence
and forward to the CVC for its approval. Only those officers of Government
of India Departments or Public Sector Undertakings, who have retired from
top management positions, would be considered for appointment as IEM,
provided they are neither serving or retired from the same organization.
Eminent persons, retired judges of High/ Supreme Courts, executives of
private sector of considerable eminence could also be considered for
functioning as Independent External Monitors. The appointment of
Independent External Monitors would be for an initial period of three years
and could be extended for another term of two years (maximum tenure of
five years). Names and contract details of the Independent External
Monitor(s) should be listed in Notice Inviting Tender (NIT).

10) In Tenders meeting the criterial of threshold value / nature of

procurement
Integrity Pact clause and format should be included in the Bid Documents.
Each page of such Integrity pact proforma would be duly signed by
Purchasers competent signatory. All pages of the Integrity Pact are to be
returned by the bidder (along with the technical bid) duly signed by the same
signatory who signed the bid, i.e., who is duly authorized to sign the bid and
to make biding commitments on behalf of his company. Any bid not
accompanied by Integrity Pact duly signed by the bidder shall be considered
to be a non-responsive bid and shall be rejected straightway.

11) Role / Functions of IEMs

a) Bidders or their authorised representative may address to the IEMs all

the representations/grievances/complaints related to any discrimination
on account of lack of fair play in modes of procurement and tendering
systems, tendering method, eligibility conditions, bid evaluation criteria,
commercial terms & conditions, choice of technology/specifications etc.
b) The entire panel of IEMs should examine the matter jointly, who would
investigate the records, conduct an examination, and submit their joint
recommendations to the Management of the Procuring Entity. If the
entire panel is unavailable for unavoidable reasons, the available
IEM(s) shall examine the complaints. Consent of the IEM(s), who may
not be available, shall be taken on record. The IEMs would be provided
access to all documents/records of the tender for which a complaint or
issue is raised before them, as and when warranted.

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c) The role of IEM is advisory, and the advice of IEM is non-binding on the
Organization; however, their advice would help properly implement the
Integrity Pact.
d) IEM should examine the process integrity; they are not expected to
concern themselves with fixing the responsibility of officers. IEMs should
not associate CVO and /or the officials of the vigilance wing during the
examination of the complaints in any manner. A matter being examined by
the IEMs can be separately investigated by the CVO if a complaint is
received or directed to them by the CVC.

6.25 LAND BORDER SHARING:

6.25.1 Guidelines for Eligibility of Bidders from a Country sharing a land

border with India

Attention is invited to Order (Public Procurement No.1) issued vide F .6/18/2019-

PPD dated 23.07.2020, Order (Public Procurement No.2) issued vide F.6/18/2019-
PPD dated 23.07.2020, Order (Public Procurement No.3) issued vide F.6/18/2019-
PPD dated 24.07.2020, Office Memorandum (OM) No. F.18/37/2020-PPD dated
08.02.2021, OM No. F.12/1/2021-PPD(Pt.) dated 02.03.2021 and OM
No.7/10/2021-PPD dated 08.06.2021. In this regard, the following is hereby
ordered under Rule 144(xi) (as amended vide OM No. F.7/10/2021-PPD dated
23.02.2023) on the grounds stated therein, in supersession to all of the above
mentioned Orders/ clarifications.

6.25.2 LAND BORDER SHARING GUIDELINES AS PER OM No. F.7/10/2021-

PPD dated 23.02.2023, Order (Public Procurement No.4):

REQUIREMENT OF REGISTRATION
1) Any bidder from a country which shares a land border with India will
be eligible to bid in any procurement whether of goods, services
(including consultancy services and non-consultancy services) or
works (including turnkey projects) only if the bidder is registered with
the Competent Authority, specified in Annexure I.
2) Any bidder (including an Indian bidder) who has a Specified Transfer
of Technology (ToT) arrangement with an entity from a country which
shares a land border with India will be eligible to bid in any
procurement whether of goods, services (including consultancy
services and non-consultancy services) or works (including turnkey
projects) only if the bidder is registered with the Competent Authority,
specified in Annexure I.
3) The requirement of registration for cases covered by paragraph 1
above has been applicable since 23.07.2020. The requirement of
registration for bidders covered by paragraph 2 above will be
applicable for all procurements where tenders are issued/ published
after 01.04.2023.

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4) In tenders issued after 23.07.2020 or 01.04.2023, as the case may
be, the provisions of requirement of registration of bidders and of
other relevant provisions of this Order shall be incorporated in the
tender conditions.

5) APPLICABILITY
Apart from Ministries/ Departments, attached and subordinate bodies,
notwithstanding anything contained in Rule 1 of the GFRs 2017, the
Order shall also be applicable
a) to all Autonomous Bodies;
b) to all public sector banks and public sector financial institutions;
c) to all Central Public Sector Enterprises;
d) to all procurement in Public Private Partnership projects receiving
financial
e) support from the Government or public sector enterprises!
undertakings; and
f) Union Territories, National Capital Territory of Delhi and all
agencies! undertakings thereof.

6) This order will not be applicable for cases falling under Annexure II.

DEFINITIONS:
7) "Bidder" for the purpose of the Order (including the term 'Bidder',
'consultant' 'vendor' or 'service provider' in certain contexts) means
any person or firm or company, including any member of a consortium
or joint venture (that is an association of several persons, or firms or
companies), every artificial juridical person not falling in any of the
descriptions of bidders stated hereinbefore, including any agency,
branch or office controlled by such person, participating in a
procurement process.

8) "Tender' for the purpose of the Order will include other forms of
procurement, except where the context requires otherwise.

9) "Transfer of Technology" means dissemination and transfer of all

forms of commercially usable knowledge such as transfer of know-
how, skills, technical expertise, designs, processes and procedures,
trade secrets, which enables the acquirer of such technology to
perform activities using the transferred technology independently.
(Matters of interpretation of this term shall be referred to the
Registration Committee constituted by the Department for Promotion
of Industry and Internal Trade, and the interpretation of the Committee
shall be final.)

10) "Specified Transfer of Technology" means a transfer of technology in

the sectors and or technologies.

11) "Bidder (or entity) from a country which shares a land border with
India" for the purpose of the Order means.

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a) An entity incorporated, established or registered in such a country;
or
b) A subsidiary of an entity incorporated, established or registered in
such a country; or
c) An entity substantially controlled through entities incorporated,
established or registered in such a country; or
d) An entity whose beneficial owner is situated in such a country; or
e) An Indian (or other) agent of such an entity; or
f) A natural person who is a citizen of such a country; or
g) A consortium or joint venture where any member of the consortium
or joint venture falls under any of the above

12) Beneficial owner for the purposes of Para 11 (d) will be as under:

(i) In case of a company or Limited Liability Partnership, the beneficial

owner is the natural person(s), who, whether acting alone or
together, or through one or more juridical person(s), has a
controlling ownership interest or who exercises control through other
means.

EXPLANATION
a) "Controlling ownership interest" means ownership of, or
entitlement to, more than twenty-five per cent of shares or
capital or profits of the company;

b) "Control" shall include the right to appoint the majority of the

directors or to control the management or policy decisions,
including by virtue of their shareholding or management rights
or shareholders agreements or voting agreements;

(ii) In case of a partnership firm, the beneficial owner is the natural

person(s) who, whether acting alone or together, or through one or
more juridical person, has ownership of entitlement to more than
fifteen percent of capital or profits of the partnership;

(iii) In case of an unincorporated association or body of individuals, the

beneficial owner is the natural person(s), who, whether acting alone
or together, or through one or more juridical person, has ownership
of or entitlement to more than fifteen percent of the property or
capital or profits of such association or body of individuals;

(iv) Where no natural person is identified under (i) or (ii) or (iii) above,
the beneficial owner is the relevant natural person who holds the
position of senior managing official;

(v) In case of a trust, the identification of beneficial owner(s) shall

include dentification of the author of the trust, the trustee, the
beneficiaries with fifteen percent or more interest in the trust and any
other natural person exercising ultimate effective control over the
trust through a chain of control or ownership.

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13) "Agent' for the purpose of the Order is a person employed to do any act
for another, or to represent another in dealings with third persons.

[Note:
i). A person who procures and supplies finished goods from an entity
from a country which shares a land border with India will, regardless
of the nature of his legal or commercial relationship with the
producer of the goods, be deemed to be an Agent for the purpose of
this Order.

ii). However, a bidder who only procures raw material, components etc.
from an entity from a country which shares a land border with India
and then manufactures or converts them into other goods will not be
treated as an Agent.]

14) Sensitive Sectors/ Technologies (relevant only for the provisions on

ToT arrangements):

i) Certain sectors and technologies have been identified as sensitive

from the national security point of view. The sectors listed in
Schedule I to this Order are considered Category-I sensitive sectors.
The sectors listed in Schedule II to this Order are considered
Category-II sensitive sectors. The technologies listed in Schedule III
are considered sensitive technologies.

ii) For Category-I sensitive sectors, bidders with ToT arrangement in

any technology with an entity from a country which shares a land
border with India shall require registration.

iii) For Category-II sensitive sectors, bidders with ToT arrangement in

the sensitive technologies listed in Schedule III, with an entity from a
country which shares a land border with India shall require
registration.

iv) In Category-II sensitive sectors, the Secretary (or an officer not

below the rank of Joint Secretary to Government of India, so
authorized by the Secretary) of the Ministry/ Department of the
Government of India is empowered, after due consideration, to
waive the requirement of registration for a particular item! application
or a class of items! applications from the requirement of registration,
even if included in Schedule III. The Ministry/ Department concerned
shall intimate the Department for Promotion of Industry and Internal
Trade (DPIIT) and National Security Council Secretariat (NSCS) of
their decision to waive the requirement of registration. Ministries!
Departments of the Government of India are not required to consult
the DPIIT! NSCS before deciding and are only required to intimate
the decision to DPIIT! NSCS. If any point is raised by DPIITI NSCS,
it should be considered in future procurements; ongoing
procurement for which the waiver was granted need not be
interrupted or altered.

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15) Based on security considerations, a Ministry! Department in a
Category II sensitive sector or other Ministries/ Departments may
recommend to DPIIT inclusion of any other technology in the list of
sensitive technologies, either generally or for their Ministry!
Department.
16) Certificate regarding compliance

An undertaking shall be taken from bidders in the tender documents

(Annexure III) that the extant guidelines for participation in the tenders
(which should include conditions for implementation of this Order)
have been complied with. If such certificate given by a bidder whose
bid is accepted is found to be false, this would be a ground for
debarment and further legal action in accordance with law.
17) Validity of registration

In respect of tenders, registration should be valid at the time of

submission of bids and at the time of acceptance of bids. In respect of
supply otherwise than by tender, registration should be valid at the
time of placement of order. If the bidder was validly registered at the
time of acceptance/placement of order, registration shall not be a
relevant consideration during contract execution.
18) Government e-Marketplace (GeM)

GeM shall remove non-compliant entities from GeM unless/ until they
are registered in accordance with this Order.
19) Model Clauses/ Certificates

Model Clauses and Model Certificates which may be inserted in

tenders/ obtained from Bidders are given at Annexure-III. While
adhering to the substance of the Order, procuring entities are free to
appropriately modify the wording of these clauses based on their past
experience, local needs etc.

6.25.3 Please refer to the OM No. F.7/10/2021-PPD dated 23.02.2023 for

ANNEXURE formats as specified in this Border Sharing OM.

6.25.4 Bidders should submit a Certificate of Conformance to Border Sharing

Annexure 6-IV (P-242) along with their techno-commercial bid.

6.25.5 Guidelines (Orders/ clarifications) issued by the Government of India

towards Land Border Sharing shall be applicable from time to time.

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6.26 CONSORTIUM

i) If the Supplier is a consortium of two or more parties, all such parties shall
be jointly and severally bound to the NMDC for the fulfillment of the
obligations of the Supplier as per provisions of the Purchase Order and shall
designate one of such party to act as a Lead Member (the “Lead Member”)
with authority to bind the consortium.
ii) Notwithstanding the provisions of being jointly and severally liable to NMDC
by all members of consortium, the Lead Member of consortium shall be
primarily responsible for full execution of the entire Scope of work of this
Purchase Order, so that the NMDC gets the facilities completed in time in all
respects.
iii) The Lead Member shall be authorized to incur liabilities and receive
instructions for and on behalf of any & all members of the consortium and
the same shall be binding on all consortium Members.
iv) Unless otherwise expressly specified in the Purchase Order, only the
consortium Lead Member shall be authorized to make all communications
including notices under the Purchase Order for or on behalf of any or all
members of the consortium.
v) Lead Member of the consortium shall undertake full responsibility for timely
completion of the awarded work. Lead Member of the consortium shall take
the overall responsibility of project management of entire project. However,
each party shall remain responsible towards the other party for their
respective scope of work for its actions and deficiencies.
vi) Lead Member of the consortium shall be responsible for resolving any
disputes/ misunderstanding / undefined activities etc., if any, amongst all the
members of the consortium. In case any one or more of the members of the
consortium become insolvent or are unable to fulfill their Purchase Orderual
obligations, the Lead Member of the consortium will be liable for the
execution of the balance scope of work of the Purchase Order without any
demur/ condition and all the liabilities of the consortium partner(s) shall
automatically be deemed to be taken over by the consortium Lead Member.
vii) The composition or the constitution of the consortium may be permitted to
alter only with the prior consent of the NMDC in writing under the following
circumstances:
a) Substitution for default/ material breach of Purchase Order by the
consortium member: If any member of the consortium fails to deliver or
perform any Purchase Orderual obligation(s) within the time period
specified in the Purchase Order, or within any extension thereof granted
by the NMDC;

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b) Substitution for Insolvency: If any member of the consortium become
bankrupt or otherwise insolvent, the Supplier may substitute the member of
the consortium after giving written notice to the NMDC, without any
compensation to the member of the consortium, provided, that such
termination will not prejudice or affect any right of action or remedy which has
accrued and/or will accrue thereafter to the NMDC;

c) Substitution under any other exceptional circumstances: At any time

during the execution of the Purchase Order, if need arises for substitution of
the consortium member under unforeseen exceptional circumstances, then
the NMDC may permit such substitution at its discretion.
Note: The lead member has to submit all the documents and establish the
reasons for substitution of the consortium member. Further, the NMDC may
seek additional documents like letter of undertaking, additional guarantees
etc. or verify that the new consortium member satisfies the eligibility criteria
proportionate to the balance scope of work of the outgoing consortium
member before approving such substitution. Upon approval, the Lead
Member shall submit the amended Consortium Operating Agreement within 7
days from the date of such approval. The Lead Member is responsible to
ensure that there is sufficient handholding to the new consortium member for
seamless substitution of the consortium member.

viii) All employees, representatives or Sub-Suppliers engaged by the consortium in

connection with the performance of the Purchase Order shall be under the
complete control & supervision of the Supplier and shall not be deemed to be
employees of the NMDC, and nothing contained in the Purchase Order or in any
Sub-Purchase Order awarded by the Supplier shall be construed to create any
Purchase Orderual relationship between any such employees, representatives or
Sub-Suppliers and the NMDC.
ix) The notarized Consortium Operating Agreement (COA) between Lead Member of
consortium and all other consortium members submitted during the bid submission
stage shall from part of this Purchase Order Agreement. Any Amendments in the
Consortium Operating Agreement (COA) sought by the NMDC in writing prior to
signing of Purchase Order shall be furnished at the time of signing of the Purchase
Order Agreement. The validity of the Consortium Operating Agreement will be until
all obligations, liabilities and warranties undertaken/given by the consortium in
connection with the Purchase Order with the NMDC have been settled. In case,
any need for changes or amendments in the Consortium Operating Agreement
arises during the execution of Consortium Operating Agreement including but
not limited to share of scope of work, such changes or amendments shall be done
only upon prior approval of the NMDC in writing.

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6.27 CANCELLATION OF PURCHASE ORDER
When it is intended to cancel the Purchase Order, which has been kept
alive after expiry of delivery period by the conduct of parties, it is necessary
to issue a notice to the concerned party before actual cancellation giving a
period of 15 days for supply of material without prejudice to NMDC’s rights
as per terms of the contract.
Where the order is not kept alive beyond delivery period by implication or
conduct of the parties, cancellation should be issued by the MM
Department immediately based on recommendation of User department,
with financial concurrence approval of Competent Authority as per extant
DoP after expiry of the delivery period stating that quantities incomplete
on the due date are cancelled and risk purchase will be made in terms of
the relevant clause of the tender conditions of the contract.
However, before initiating the process for placement of alternate order on
risk purchase or for cancellation of original order on the defaulting party,
approval of the competent authority should be taken. Wherever necessary,
Law Department should be consulted to protect the interests of the NMDC.

6.28 RISK PURCHASE

6.28.1 Tender notice / documents may stipulate the risk purchase clause. In the
event of failure of the supplier to deliver goods, services and goods cum
services or dispatch the item / equipment / stores within the stipulated
date/period of the supply order or failure in completion of job/ work/service
or in the event of breach of any of the terms and conditions mentioned in
the order, NMDC reserves the right to cancel the order and make
alternative purchase of the materials of similar description or get the job/
work/ service completed from elsewhere at their risk and cost duly giving
an advance notice of 15 days to this effect and in such an event the
seller will be liable to pay any losses that may be incurred by the buyer.
It may be mentioned clearly in the tender enquiry that in the event of failure
of the supplier as detailed above, the cost as per risk purchase exercise
may also be recovered from the pending bills of the defaulting supplier
against any other supplies pending in NMDC.

6.28.2 CONDITIONS FOR RISK PURCHASE

Risk purchase action may be initiated as a last resort, under any of the
following conditions:
a) When the supplier fails to deliver the materials or complete the job/
work/ service even after the delivery period is extended on several
occasion, on request from the supplier.
b) When the supplier fails to respond to purchaser’s request for supply of
the materials or complete the job/ work / service and fails to provide any
reason which is considered to be genuine, for the delay in supply or
completion of work.

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c) When in the judgement of the purchaser the supplier is unable to
execute the order due to various reasons.
d) When the materials / work/ service completion is urgently required, and
the supplier fails to deliver the materials or complete the job/ work/
service within the extended/original delivery schedule.
e) When the supplier breaches any of the terms and conditions of the order
and as a result fails to execute the order satisfactorily.
f) The invocation of Risk Purchase & corresponding amount recoverable
under the same shall be independent from any amount recoverable
under LD provisions.
6.28.3 PROCEDURE FOR RISK PURCHASE
The following procedures will be adopted when it is decided to initiate Risk
Purchase action.
a) A risk purchase notice will be served, under registered cover, on the
supplier giving a time period of not less than 30 days to complete
supply. It will be stated that unless execution of the order is completed
by that date the materials will be purchased or job/work/ service will be
completed at their risk and cost.
b) In case the supplier fails to resume and complete supply/ work/ service
even after the above time period for reasons, which is not considered
genuine and acceptable by the purchaser, the following actions may be
taken:
i) Cancel the order and take action of forfeiture of the EMD/security
deposit/Performance Bank Guarantee submitted by the supplier if
any, with the approval of C/A.
ii) Float enquiry as per normal tendering procedures for the
outstanding quantity of the materials of identical specifications. In
case of Limited Tenders, enquiries should be sent to at least all the
firms to whom the original tender against which the original order
was placed, were sent. A copy of the enquiry marked “Risk
Purchase Tender” may be sent to the defaulting supplier under
registered post / email / fax and they should be specifically informed
that the enquiry is sent for information only and not for submission
of any offer.
c) While evaluating the tenders, any offer if submitted by the defaulting
firm, despite the above instruction for not submitting any offer, shall be
ignored.
d) Simultaneously, all pending claims of the supplier or any amount
payable to the supplier will be withheld to enable the Company to
recover the amount of difference, if any, between the original ordered
price and price payable against the risk purchase to be made. Finance
will be advised to take appropriate actions in this regard. In case no
such amount is pending for payment, the matter may be referred to the
Finance Department for advice in filing an appropriate claim on the firm.

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After recovery of the excess amount for risk purchase, if any, the
balance amount may be paid to the defaulting supplier.
e) In case the supplier fails to pay the above amount, necessary action in
the court of law should be initiated accordingly. Simultaneously, actions
towards deregistration of the firm as vendor or suspension of business
as per the relevant clause may also be considered.
6.28.4 Risk purchase shall be included in all tender enquiries for procurement of
capital equipment. In case of revenue items, this clause may be included
on case to case basis, with approval of Competent Authority.

6.29 IMPORTS MANAGEMENT

6.29.1 The import licenses whenever required are to be processed in consultation

with Purchase Section at Head Office. The positions of export obligations
and redemptions / letter of undertaking/BG submitted for obtaining license
and clearance of import consignments are to be monitored. For
INCOTERMS 2020 rules, please refer to Annexure 6-V (P-243).

6.29.2 All imports are governed by the Foreign Trade Policy (FTP) issued by
Ministry of Commerce & Industry, Government of India on 5 yearly basis
(Amended from time to time on yearly basis). The present policy is of 2015-
2020. New FTP for 2021- 2026 shall be referred to when notified by GoI.
As per the policy, all imports shall be free, except where regulated by FTP
or any other law in force. The item wise export and import policy shall be,
as specified in ITC (HS) notified by DGFT, as amended from time to time.

The imports, in our case, can broadly be divided into

1) Free imports against actual user condition on merits
2) Imports under duty exemption schemes:
a) Duty Exemption & Remission Scheme
b) Export Promotion Capital Goods Scheme

6.29.3 DUTY EXEMPTION & REMISSION SCHEME

Duty exemption schemes enables duty free import of inputs required for
export production. Duty Exemption Schemes consist of (a) Advance
Authorization scheme and (b) Duty Free Import Authorization (DFIA)
scheme. A Duty Remission Scheme enables post export replenishment /
remission of duty on inputs used in export product. Duty Remission
Schemes consist of (a) Duty Entitlement Passbook (DEPB) Scheme and
(b) Duty Drawback (DBK) Scheme.

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6.29.4 EXPORT PROMOTION CAPITAL GOODS SCHEME (EPCG)

Zero duty EPCG scheme allows import of capital goods for pre-production,
production, and post-production (including CKD/SKD thereof as well as
computer software systems) at zero Customs duty, subject to an export
obligation equivalent to 6 times of duty saved on capital goods imported
under EPCG scheme, to be fulfilled in 6 years reckoned from Authorization
issue-date.
(For detailed policy and procedures, please refer Foreign Trade Policy
issued by Minister of Commerce and Industry)

6.29.5 The procedure for obtaining the license / authorization against these
schemes is detailed in the handbook of procedures of Foreign Trade Policy
issued by Ministry of Commerce and Industry.

a) For all imports, which are freely importable (and not regulated)
attracting payment of custom duty on merits, there is no need for
obtaining any type of license / authorization subject to the condition the
importer is an actual user.

b) For imports, under duty exemption and remission schemes and EPCG
schemes, there is a need for obtaining the necessary license /
authorization from the concerned regional authority of Director General
of Foreign Trade.

Generally, the duty exemption schemes, demand export of the product

manufactured / produced by the goods imported i.e., nexus between
item imported and product exported.

The export obligation to be fulfilled in terms of quantity and value of

export product and the time limit against the schemes differs from time
to time. Against duty emission and remission scheme, advance
authorization can be obtained subject to fixation of standard input
output norms and there is no payment of customs duty.

6.29.5.1 IN NMDC’S CASE:

The Tricon Rock Roller Bits along with Nozzle Assembly is the item for
which advance authorizations are being obtained and the norm for
fulfillment of export obligation is export of 100 times the CIF value of import
to be fulfilled in the specified period of time. NMDC can also source the
products covered by advance authorization indigenously and still utilize the
advance authorization by obtaining the advance release orders in favour of
the indigenous suppliers, wherein, we get the benefit of exemption of
payment of excise duty and fulfill the export obligation as specified in the
advance authorization.

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6.29.5.2 The OTR Tyres and conveyor belts apart from the capital goods are
eligible for obtaining the license for import under EPCG scheme subject to
fulfillment of export obligation as per the Foreign Trade Policy. We can also
source the capital goods covered by EPCG license indigenously and still
utilize the EPCG license by obtaining the release orders in favour of the
indigenous suppliers, wherein, we get the benefit of exemption of payment
of excise duty and fulfill the export obligation as specified in the EPCG
license. The appropriate EPCG scheme as per Foreign Trade Policy will be
applicable.
The export obligation to be fulfilled in terms of value of export product and
the time limit against the schemes differs from time to time.

6.29.6 Typical documentation required for obtaining Advance authorization /

EPCG license from regional authority of DGFT:
1) Application as specified in the handbook of procedures
2) Payment of application fee
3) Copy of RCMC certificate
4) Copy of import export code number
5) Offer copy/ order copy of supplier along with technical details
6) Details of CIF value for import item
7) Chartered Accountant certificate for exports
8) Copy of certificate of incorporation, mining lease etc.
9) MOU / agreement with MMTC regarding exports.
10) Copy of Power of Attorney for signing the document

Other activities on receipt of license / authorization:

1) Scrutiny / verification of license / authorization for correctness

2) Application for advance release order/ release order if required in
case of indigenous procurement.
3) Registration of license / authorization at the port of import and at the
port of export.
4) Coordination of clearance of goods from ports as per the license/
authorization
5) Informing the consignee for monitoring the imports and obtaining
necessary documentation from authorities like Excise department etc.
for fulfilling the documentation works.
6) Monitoring/ endorsing the license number/ authorization number on
the documentation of exports like the shipping bills in coordination with
the port of export.
7) Obtaining original shipping bills and bank realization certificates from
the regional office of the port of export.
8) Filling the application with RA of DGFT for discharge of export
obligation.

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6.29.7 CLEARING AGENT AND CUSTOM CLEARANCE AT PORT:

All the clearances through customs should be taken up by the regional
office at the Port through the nominated Clearing Agent finalized by HO.
The Clearing Agent will follow all the regulations of the customs and port
and file Bill of Entry on our behalf. The activities of the Clearing Agent are
to be coordinated by the regional office.

Typical activities of clearing agent include:

1) Forwarding the original documents to the concerned port for

clearance of goods and dispatch to the consignee.
2) Coordination with the regional office till the clearance of goods,
dispatch to consignee and receipt at projects.
3) Coordination for receipt of Bill of Entries for the goods cleared.
4) All other activities for fulfillment of all obligations like insurance etc.

6.29.8 IMPORT CELL:

The Import cell at the Corporate Office shall be responsible for the
following:

1) Planning for foreign exchange requirements and requisitioning

suitable Import License.
2) Getting Technical clearance from DGFT (if required)
3) Assisting in arranging Import Licenses, Letters of Authority for
suppliers.
4) Analyzing Bills of Entry from the point of view of correctness of the
duty assessed and taking action for refund of extra customs duty paid,
if any, in time.
5) Keeping liaison with Port, customs, clearing agents, DGFT, Regional
Office and Head Office Finance regarding clearance of imported
consignments.

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CHAPTER – 7

7 TENDER PROCESS, BID EVALUATION AND PLACEMENT OF

ORDER

7.1 e-PROCUREMENT
As per the Govt guidelines, it is mandatory to float tenders in e-tendering
mode for all procurement of goods & services. In case of any deviation,
proper reasons shall be recorded and specific approval from C/A shall be
taken.

NMDC e-procurement portal (SRM) facilitates processing of tenders in e-

mode and obtaining offers (both technical and price bids) online in the
portal. Tender is posted by dealing officer and opened in the presence of
tender opening committee (TOC) from materials and finance members with
their Logins. The firms are also required to upload the offers through their
Login. Copies of documents as proposed in NIT are to be uploaded. For
documents uploaded in the e-Procurement portal, hard copies are not
necessary to be submitted by the bidders. Hard copies of other documents,
if any, are to be submitted by bidders manually / through post / courier
wherever it is applicable, before opening of tender.

The no. of participants in the tender are known on tender closing date &
time. After Login by TOC Members, details of participants are known. After
checking the required documents as per NIT, valid offers of firms will be
opened. After examination of Techno-commercial bids, Commercial
comparative statement (CCS) and Technical comparative statement (TCS)
are generated online. Both CCS and TCS are visible to all the vendors after
opening of tender.

7.2 ISSUE OF PURCHASE ENQUIRIES

Approval for mode of tendering in case of Global / Open/ Limited / Single

tenders shall be taken as discussed in chapter-5. For GeM procurement,
Standard Operation Procedure of GeM shall be followed.

In case of corporate office after consolidating requirements of other projects

wherever applicable, the purchase enquiry proposal is to be processed.
Quantity to be procured should not be reduced and procured through
multiple PRs to avoid approvals from competent authority of higher level.
Purchase enquiries should be issued within 7 days after the approval of
competent authority. The instructions to Bidders for submission of their
tenders should be clear and comprehensive. Purchase enquiry proposal is to
be got approved in specific format from the competent authority as per
Annexure 7-I (P-244).

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Separate tender enquiry may be prepared for different groups of materials.

The concerned purchase entities at HO or project shall float the relevant
tenders for the values as per extant DoP and maintain Tender Issue
Register as per Annexure 7-II (P-245).

7.3 ISSUE OF AMENDMENT / MODIFICATION TO TENDER ENQUIRY

a) Tender enquiries should be issued after due diligence to ensure there is
no need for amendments / modifications later. However, there may be
situations where there is a necessity to modify a tender enquiry already
issued.
b) In such cases, the proposed amendments should be reviewed to
ascertain if the amendments are of a nature to substantially change the
requirements / specifications / tender terms and conditions. In that case,
fresh tender shall be floated by discharging the earlier tender.
c) In cases where changes are minor, but related to specifications, tender
terms and conditions and with NO Financial implication, corrigendum
may be issued with the approval of Competent Authority (No Financial
Concurrence is required). Adequate publicity of the corrigendum may
be given in the same manner as the publication of communication of the
initial bidding document was made for information of bidders and
prospective bidders.
d) All Bidders shall be asked to submit a confirmation that they are aware
of the corrigendum (issued on a particular date, after the publication of
initial tender enquiry).
e) Bid submission date should be suitably extended after the issue of
corrigendum to ensure bidders have sufficient time to submit their offer.
Any bidder who has already submitted the bid before issue of
corrigendum shall be given the opportunity to modify / re-submit /
withdraw the bid as the case may be.

7.4 TENDER EXTENSION

a) The minimum required number of valid offers (except for single tender)
shall be 3. In case of Limited Tenders, minimum required number of
valid offers shall be 3 (or) 50% of number of enquiries issued,
whichever is higher.
The date and time fixed for opening of tenders should be strictly
adhered to, except in exceptional cases where the minimum required
number of offers are not received. In such cases, extension in due date
may be considered. In case minimum required number of offers are not
received within the due date, the tender due date shall be
automatically extended for 7 days. If minimum required number of
offers are still not received, another extension window of 7 days shall
be provided automatically.

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No financial concurrence and further approval is required for these
extensions. However, In case of emergency purchase and other special
cases, available offers may be opened without any extension of tender
due date with the approval of HoD (Materials) by recording the reasons
for the same.

In the absence of minimum required number of offers even after the 2

window of extension, available offers shall be opened with the approval
of HoD (Materials).

In case no offer is received even after the two extension windows,

further extension of tender due date may be provided on case to case
basis with approval of HoD (Materials) by recording suitable reasons
(or) a fresh tender may be issued with the approval of Competent
Authority.

b) In all cases where date and time of the tender has been extended due
to unavoidable circumstances, such extension shall be displayed in
GeM/ NMDC SRM /CPP Portals.

7.5 TENDER OPENING COMMITTEE (TOC):

i). The TOC (minimum two members) has to be constituted with the
approval of Competent Authority as per DoP. A standing list of TOC
members MM department and Finance department duly approved by
the Competent Authority may be prepared for the purpose of tender
opening only. Dealing officer from MM dept shall be default TOC
member. Annexure 7-IV (P-248).

ii). TOC shall have a member from the user department or Materials
Management department (if tendering action is being taken by MM
department on behalf of user department or as may be required on
case-to-case basis), along with a representative from Finance
department.

iii). However, for the tenders floated through GeM portal, wherein digital
signatures of multiple representatives are not required for opening of
the bids, such cases can be directly processed by the dealing officer
(with consent of HoD), without any constitution of TOC, as the bids
under GeM portal have to be opened directly by the dealing officer
using his/her login credentials directly considering the bids under
GeM cannot be altered.

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7.5.1 ROLE OF TOC

a) TOC (One member from Materials and one member from Finance) will
ensure downloading of all documents as uploaded by each bidder in e-
tendering platform while opening Techno-commercial offers and handed
over the same to dealing officer in Materials Dept. for making one set of
each offer. In case of offline bids, TOC shall open the offers (techno-
commercial / price offers, as the case may be) and endorse their
signatures on all the papers.
b) TOC members will ensure downloading of document related to Price Bid
of all techno-commercially qualified bidders as approved by Competent
Authority.
c) Information regarding receipt of Earnest Money / Bid Security/ Integrity
Pact wherever applicable, or otherwise, shall be recorded in the Tender
opening Register available at MM Dept.

7.6 SCRUTINY OF BIDS

All offers will be first scrutinized to see whether they meet the basic
requirements as incorporated in tender document. In case of major
deviations from the basic requirements, the offer may be rejected
straightaway.

Such deviations may include non-submission of required EMD, or the

exemption claim for EMD, offer made by banned or suspended vendor etc.

7.6.1 CLARIFICATION OF BIDS/ SHORTFALL/ CONFIRMATORY DOCUMENTS:

a) During evaluation and comparison of bids, the purchaser may ask the
bidder for clarifications on the bid. The request for clarification shall be
communicated to the bidder via e-mail/ GeM / NMDC SRM portal,
asking the bidder to respond by a specified date, and also mentioning
therein that, if the Bidder does not comply or respond by the date, his
tender will be liable to be rejected.

b) Depending on the outcome, such tenders are to be ignored or

considered further. No change in prices or substance of the bid shall
be sought, offered or permitted. No post-bid clarification at the initiative
of the bidder shall be entertained.

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c) The shortfall information/ documents should be sought only in case of
historical documents which pre-existed at the time of the tender opening
and which have not undergone change since then.

(Example: if the Permanent Account Number, registration with sales tax/

VAT/ GST has been asked to be submitted and the Bidder has not
provided them, these documents may be asked for with a target date as
above).

d) So far as the submission of documents is concerned with regard to

qualification criteria, after submission of the tender, only related shortfall
documents should be asked for and considered. For example, if the
bidder has submitted a supply order without its completion /
performance certificate, the certificate related to that supply order can be
asked for and considered. However, no new supply order should be
asked for so as to qualify the bidder.

e) The Purchaser may ask for clarifications/ shortfall/ confirmatory

documents during the evaluation of the bids. For the purpose of
uploading these clarifications / shortfall documents, bidders shall be
given:

Only 2 chances: First of 7x24 hours duration and second of 7x24

hours duration.

If the bidder does not comply or respond by the date, their tender
will be liable for rejection.

f) The bidder shall submit the requested documents within the specified
period.

g) Information shall be sent by e-mail/ GeM/ NMDC SRM portal, but it will
be the bidder’s responsibility to check the updated status/ information on
their personalized dash board at least once daily after opening of bid.

h) No separate communication will be made in this regard. Non-receipt of

email/ SMS will not be accepted as a reason of non-submission of
documents within prescribed time.

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7.7 BID EVALUATION
After initial scrutiny, the bids shall be processed as follows:

a) SINGLE BID SYSTEM

1) Both Techno-commercial bid and financial bids shall be opened together.

The Dealing officer of MM department shall prepare comparative statement
of bids as indicated in section 7.8.
2) In case of offline bids, the comparative statement prepared by Dealing
officer shall be checked by TSC.
3) TSC shall refer to the comparative statements to arrive at its
recommendations. TSC minutes shall be submitted for approval of
Competent Authority as per extant DoP.
4) Order shall be placed on the accepted Bidders on least cost basis as per
approval of Competent Authority as per extant DoP.

5) In cases where NO TSC is envisaged, the Purchase office shall prepare the
purchase proposal including comparative statement and forward it for
approval of competent authority as per extant DoP.

b) TWO BID SYSTEM

1) Techno-commercial bid shall be opened first only after receipt of EMD,

Integrity Pact, and any other documents as specified in the terms and
conditions of the Tender/NIT.

2) Technical and commercial appraisal of the techno-commercial bids shall be

done as per clause 7.11 below.

3) Tender Scrutiny Committee (TSC) shall refer the technical and commercial
comparative statements to arrive at its recommendations. The Minutes of
Meeting of TSC shall be put up for approval of Competent Authority as per
extant DoP.
4) Once the Competent Authority approves the techno-commercial bids, the
Financial/ price bids of those approved tenders alone shall be opened.
5) A comparative statement of the opened price bids shall be prepared by the
dealing officer. In case of offline bids, the Price CST shall be checked by
TSC.
6) Tender Scrutiny Committee (TSC) shall then meet again to deliberate on
the price bids. TSC recommendations (minutes of meeting) shall be put up
for financial concurrence and approval of Competent Authority as per extant
DoP.
7) Order shall be placed on the bidder(s) after Approval of Competent
Authority.

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7.8 COMPARATIVE STATEMENT (CST)
a) After the tenders have been received and opened, a system generated
comparative statement shall be made available through e-procurement
system along with all relevant general terms & conditions.
b) Comparative statement (CS) should be clear and contain relevant
information only. The CS shall also indicate rates on common basis for
easy comparison and properly ranked based on the FOR-Destination
cost. For Tenders published through GeM/ e-procurement, no CST
checking is required.

c) Comparative Statement (CS) for foreign offers on FOB /CIF basis shall
indicate inter alia rates in equivalent rupee, rate of customs duty, any
other duty, freight, insurance, and exchange rate, as applicable on the
date of opening of Price bids.

d) As per the delegation of powers, all cases which are to be referred to

Finance for concurrence should be sent to the Finance Department
with the authenticated comparative statement of tenders, relevant
quotations along with the file / soft copy / email together with the
recommendations of the Purchase Officer/TSC. The comparative
statement should also be accompanied with a brief note discussing the
merits of each quotation given in the statement. Price CST should
invariably contain name of bidders.

e) COMPARATIVE STATEMENT FOR INDIGENOUS ITEMS

Since all indigenous items are to be procured on FOR destination basis,
comparative statement does not need any loading.
For GST registered vendors where NMDC is eligible for input tax credit,
destination cost shall be taken after deducting the input tax credit that
can be claimed.
For Unregistered / composition vendors or cases when NMDC cannot
claim input tax credit, destination cost shall be inclusive of GST (if any).

f) COMPARATIVE STATEMENT FOR IMPORTED ITEMS

Comparative statement of Imported items is to be made on destination
cost including all applicable taxes, duties, freight charges, etc.
i) Free on Board (FOB) = Ex-works + handling charges + documentation
charges+ license fee etc.
ii) Cost, Insurance and Freight (CIF) = FOB price as per (i) + Freight +
Insurance charges (generally Freight & Insurance @ 10% on FOB price
for sea freight consignments and for air freight consignments @ 20% on
FOB price will be considered).
iii) Customs duty and Custom Cess: As applicable on 100% of C.I.F.
value as per (ii) (to be paid by NMDC at the time of import)

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iv) Incidental charges @ 5% on C.I.F. Value as per (ii) (for clearance at
destination port + transportation up to Project) inclusive of applicable
GST on incidental charges.
v) For calculation purpose the exchange rate as per clause 7.9 shall be
used.

vi) IGST on [100% of CIF value as per (ii)) + Customs duty and customs
Cess as per (iii) (to be paid by NMDC at the time of Import).

vii) Supervision of Erection & Commissioning charges including GST (In

case quoted in INR).

viii) Destination cost (Before availing input tax credit) = CIF value as per (ii)
+ customs duty and customs Cess as per (iii) + Incidental charges as
per (iv) + IGST as per (vi)+ supervision of Erection & Commissioning
charges as per (vii).
In case NMDC can claim input tax credit on such purchases, Destination
cost (after availing input tax credit) shall be calculated as follows.

Destination cost (After availing input tax credit) = CIF value as per (ii) +
customs duty and customs Cess as per (iii) + Incidental charges as per (iv)
+ IGST as per (vi)+supervision of Erection & Commissioning charges as per
(vii) - IGST as per (vi)-GST on incidental expenses as per(iv)-GST on
supervision of Erection & Commissioning as per (vii).

For imported items, the bidder has to quote the price schedule WITH EPCG
and/or WITHOUT EPCG as per the tender conditions.
7.9 EXCHANGE RATE REFERENCE
Latest exchange rate available on the date of opening of price bids in
Financial Benchmarks of India Limited (https://www.fbil.org.in/) shall be
used for the reference exchange rate for preparation of comparative
statements wherever necessary.
7.10 DEMONSTRATION OF PRODUCTS / SERVICES FOR TECHNICAL
QUALIFICATION
In addition to detailed specifications, in some cases (for example, electronic
hardware, software etc.), it might be necessary to ask the bidders for a
demonstration of their offered products / services for technical qualification.
Guidelines for demonstration of products / services for technical
qualification have been provided in Annexure 7-III (P-246).
The guidelines may be amended by MM Department at HO from time to
time based on requirements and guidelines from regulatory authorities.
Such amendments in the guidelines for demonstration of products / services
for technical qualification shall be followed.

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7.11 APPRAISAL OF TECHNO-COMMERCIAL BIDS
a) Before opening of techno-commercial bids dealing officer of MM dept/ Tender
Opening Committee (TOC) shall clearly record receipt of EMD, Integrity Pact
and any other documents as specified in the terms and conditions of the
Tender/NIT. After opening of the techno-commercial bids, MM
Department, shall scrutinize the bids for their completeness and shall
forward the bids to User / Technical Department for technical appraisal.

b) User / Technical Department shall prepare the technical comparative

statement and make the technical appraisal. Based on the technical
appraisal, in case of two bid system, MM Department will call for the
technical clarifications if necessary. After receipt of the technical
clarifications, the original offer along with the technical clarifications, is
required to be referred to user/technical department for giving the final
technical appraisal.

c) The final technical appraisal along with technical CST wherever

applicable, shall clearly mention deviations and their impact if any and if
the deviations are acceptable are not, for the TSC to make its
recommendations. Reason for recommending rejection (if as per NIT
conditions) wherever applicable, shall also be mentioned in the final
technical appraisal.

d) The MM Department will prepare the provisional comparative statement

and obtain the commercial clarifications wherever required. The dealing
officer should identify the terms and conditions of the Bidder that are in
conflict with the general terms and conditions of the NIT/Tender Enquiry,
if any / and should take up the issues with the firm to settle them before
putting up to TSC. However, in case of non-acceptance by any of the
Bidder, the same shall be reflected in the comparison statement & put
up to TSC for its decision.

7.12 TENDER SCRUTINY COMMITTEE (TSC)

7.12.1 CONSTITUTION OF TSC:

Competent Authority for constitution of TSC shall be the same authority who
is competent for issue of tender enquiry, except for cases requiring approval
of CMD and higher authorities wherein FD shall continue exercise full
powers for constitution of TSC.
CORPORATE GUIDELINES ON TSC SHALL BE FOLLOWED FROM TIME TO
TIME. Annexure 7-IV (P-248).

7.12.2 ROLES & RESPONSIBILITY OF THE TSC MEMBERS:

7.12.2.1 For tenders with PR estimated value above Rs. 05 Lakhs, TSC shall
scrutinize the tenders.

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a) Based on the Comparative Statement prepared by the dealing officer of

the executing dept, the TSC shall scrutinize the tenders received
against the Notice Inviting Tender (NIT) and confirm the receipt of the
tender essentials such as EMD, Solvency Certificate, Letter of
Undertaking, Integrity Pact etc., under Part I & II of the Tender.
b) The TSC shall confirm the receipt of all other documentation and other
information envisaged under Part II of the tender required for further
processing of the tenders.
c) Non-receipt of Integrity Pact with bid – In case of receipt of any bid
/offer without accompanying Integrity Pact (wherever mandated as per
the terms of the tender), the respective bid / offer shall be considered to
be non-responsive and summarily rejected.
However, if the bidder has submitted Integrity Pact in its original offer
(Physical Copy/ Online), but the same is not in conformity with the
tender stipulations, the respective bidder may be provided an
opportunity to submit the revised Integrity Pact as per the prescribed
format, failing which the bid / offer shall be rejected. (Clause no. 7.3 of
manual for Procurement of Works – 2022). However Original Integrity
Pact (Physical Copy) shall be obtained in all cases before placement of
order.
d) Discrepancies between Original and Scanned Documents in e-
tender – In case of any discrepancy between original & scanned
documents submitted by any bidder in case of e-tender, the original
copy shall prevail over the scanned copy of the respective document.
Under such circumstances, the issue should be conveyed to the bidder
for addressing the matter within a target date, failing which the offer
shall be liable for rejection. (Clause no. 5.4.3 of Manual for
Procurement of Works – 2022).
e) Clarification of Bids / Shortfall Documents – No post-bid clarification
at the initiative of the bidder shall be entertained by NMDC. In case of
any shortfall of documents, NMDC shall seek the respective
clarifications from the concerned bidders. However, no new credentials
shall be allowed to be submitted after the opening of the bids. (Clause
no. 5.4.5 of Manual for Procurement of Works -2022).

f) The TSC shall as a collective body, sign off on the recommendations

for approval of the Competent Authority. Thus, the responsibility of the
members of the TSC is joint and several.

g) The TSC shall evaluate the eligibility of the bidder with regard to the
Pre-Qualification Criteria envisaged in the NIT.
h) On acceptance of techno commercial recommendations of the TSC by
the Competent Authority, the price bid will be opened and based on the
Price Comparative statement prepared by the dealing Officer of the
executing dept, TSC shall identify the Lowest bidder and evaluate the
reasonability of the price for acceptance or otherwise.

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i) TSC shall record all the significant issues for giving conclusive
recommendation to the Competent Authority. The TSC
recommendations shall be objective, unambiguous and categorical and
shall be supported by facts and figures, wherever required.
j) In case of any major difference of opinion between the TSC members,
the dissenting member may record his dissent along with details thereof
for enabling the Competent Authority to arrive at a holistic view. The
detailed modality in case of dissent by Finance member is given in the
DOP at point 14 of Guidelines /Preamble for exercise of powers.
k) In case of dissent by any other member, the following
methodology may be followed:
Handling Dissent among Tender Committee

All members of the TSC should resolve their difference through

personal discussions instead of making to and fro references in writing.
In cases where it is not possible to come to a consensus and
differences persist amongst TSC members, the reasons for dissent of a
member should be recorded in a balanced manner along with the
majority’s views on the dissent note. The final recommendations should
be that of the majority’s views and such situations should be rare. The
Competent Authority (CA) can overrule such dissent notes after
recording reasons for doing so clearly. His decision would be final.
In cases where the CA does not agree with the majority or unanimous
recommendations of the TC, he should record his views and, if
possible, firstly send it back to TC to reconsider along with the lines of
the tender accepting authority’s views. However, if the TC, after
considering the views of the CA, sticks to its own earlier
recommendations, the CA can finally decide as deemed fit, duly
recording detailed reasons. He will be responsible for such decisions.
However, such situations should be rare.
7.12.3 MM Dept will put up the TSC recommendations and purchase proposal
in the prescribed format as per Annexure 7-V (P-252) for financial
concurrence and approval by the competent authority as per extant
DoP.

7.13 CONSIDERATION OF LACK OF COMPETITION IN OTE, GTE AND

LTE:

[Rule 173 (xix) and (xxi) of GFR 2017]

Sometimes, against advertised/ limited tender cases, the NMDC may
not receive a sufficient number of bids and/or after Analysing the bids,
ends up with only one responsive bid – a situation referred to as ‘Single
Offer’. As per Rule 21 of DFPR such situation of ‘Single Offer’ is to be
treated as “Single Tender”.

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Re-bidding has costs:
i) firstly, the actual costs of retendering;
ii) secondly the delay in execution of the work with consequent delay
in the attainment of the purpose for which the procurement is being
done; and
iii) thirdly the possibility that the re-bid may result in a higher bid.

Even when only one Bid is submitted, the process may be

considered valid provided following conditions are satisfied:
i) The procurement was satisfactorily advertised and sufficient
time was given for submission of bids.
ii) The qualification criteria were not unduly restrictive; and
iii) Prices are reasonable in comparison to market values
However restricted powers of Single tender mode of procurement
would apply. In case of price not being reasonable, negotiations (being
L1) or retender may be considered as justifiable.

Unsolicited offers against LTEs should be ignored. However, a

system may evolve to register interested firms for next round of
tendering. However, under the following exceptional circumstances:
i) Inadequate Competition
ii) Non-availability of suitable quotations from registered vendors
iii) Urgent demand and capacity/ capability of the firm offering the
unsolicited being know, etc.

7.14 CANCELLATION OF PROCUREMENT PROCESS/ REJECTION OF

ALL BIDS/ RE-TENDER [Rule 173 (xix) of GFR 2017]
i) The NMDC may cancel the process of procurement or rejecting all
bids at any time before intimating acceptance of successful bid
under circumstances mentioned below.
In case where responsive bids are available, the aim should be to
finalise the tender by taking mitigating measures even in the
conditions described below.
If it is decided to rebid the tender, the justification should balance
the perceived risks in finalization of tender (marginally higher rates)
against the certainty of resultant delays, cost escalations, loss of
transparency in re-invited tender.
ii) After such decision, all participating bidders would be informed and
bids if not opened would not be opened and in case of manual
tenders be returned unopened:
a) If the quantity and quality of requirements have changed
substantially or there is an un-rectifiable infirmity in the bidding
process;
b) when none of the tenders is substantially responsive to the
requirements of the Procurement Documents;

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c) none of the technical Proposals meets the minimum technical

qualifying score;
d) If effective competition is lacking. However, lack of competition
shall not be determined solely on the basis of the number of
Bidders.
e) he Bids’/Proposals’ prices are substantially higher than the
updated cost estimate or available budget;
f) WITHDRAWAL OF OFFER BY L1:
If the bidder, whose bid has been found to be the lowest
evaluated bid withdraws or whose bid has been accepted, fails
to sign the procurement contract as may be required, or fails to
provide the security as may be required for the performance of
the contract or otherwise withdraws from the procurement
process, the NMDC shall re-tender the case.

iii) Approval for re-tendering should be accorded by the C/A after

recording the reasons/proper justification in writing.

iv) The decision of the NMDC to cancel the procurement and reasons
for such a decision shall be immediately communicated to all
bidders that participated in the procurement process.
v) Before retendering, the NMDC is first to check whether, while
floating/issuing the enquiry, all necessary requirements and
formalities such as standard conditions, industry friendly
qualification criteria, and technical and commercial terms, wide
publicity, sufficient time for bidding, and so on, were fulfilled. If not,
a fresh enquiry is to be issued after rectifying the deficiencies.
vi) TSC shall record the reasons for rejecting any tenders. Tender for
material which differs considerably from the required specifications
or a tender which does not confirm to the conditions of supply or is
illegible or ambiguous etc. will not be considered as an acceptable
tender. However, a tender should not be rejected as unacceptable
without substantial grounds.
vii) No technically acceptable tender shall be rejected. The lowest
Bidder giving prescribed specifications should not be rejected
merely because a higher Bidder has offered to supply the materials
of higher quality / specifications. However, if the higher
quality/specifications offer is technically acceptable, then the same
can be accepted without referring to the other Bidders who have
quoted for standard specifications.

However, if any bidder offered higher quality/ specification over the

NIT specification, NO Preference shall be given.

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viii) TSC shall review the reasonability of rates and may ask the User
who raised the PR to justify the offered price. User shall review the
PR estimate. In case the PR estimate was made based on LPR
from more than 1 year ago, LPR may be escalated as per
applicable indices. Depending on the composition of the goods, any
standard economic index may be used. An indicative, non-
exhaustive list of such indices includes:
a) RBI or any other GoI indices
b) Indices by IMF, World bank or any other global associations
where GoI is a member
c) Wholesale price index (WPI): May be used as it is or indices of
relevant commodities such as minerals, metals captured as a
part of WPI may be used.
d) Consumer price index (CPI): Industrial workers or urban
workers consumer price index may be used.

e) International indices like London Metals Exchange Index, Steel

Index, Zinc Index etc.
LPR may also be adjusted for foreign exchange fluctuation and
for any changes in taxes & duties to arrive at a revised PR
estimate. In case the price of the item has increased or
decreased significantly from the last purchase, any evidence for
the same shall be given and a revised estimate based on such
evidence shall be used for establishing the reasonability of
offered price.

7.15 CONSIDERATION OF ABNORMALLY LOW BIDS (ALBs):

An Abnormally Low Bid is one in which the Bid price, in combination

with other elements of the Bid, appears so low that it raises material
concerns as to the capability of the Bidder to perform the contract at the
offered price.
NMDC may in such cases seek written clarifications from the Bidder,
including detailed price analyses of its Bid price in relation to scope,
schedule, allocation of risks and responsibilities, and any other
requirements of the bid’s document.
If, after evaluating the price analyses, NMDC determines that the
Bidder has substantially failed to demonstrate its capability to deliver
the contract at the offered price, the NMDC may reject the
Bid/Proposal.

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However, it would not be advisable to fix a normative percentage below
the estimated cost, which would automatically be considered as an
abnormally low bid. Due care should be taken while formulating the
specifications at the time of preparation of bid document so as to have
a safeguard against the submission of abnormally low bid by the bidder.

In the case of predatory pricing as well, NMDC may refer to the above
consideration of Abnormally Low Bids to assist themselves in
finalization of tenders.

No provisions should be kept in the Bid Documents regarding the

Additional Security Deposit/ Bank Guarantee (BG) in case of
Abnormally Low Bids. Wherever, there are compelling circumstances to
ask for Additional Security Deposit/ Bank Guarantee (BG) in case of
ALBs, the same should be taken only with the approval of the next
higher authority competent to finalize the particular tender.

7.16 CARTEL FORMATION/ POOL RATES

It is possible that sometimes a group of bidders quote the same rate
against a tender. Such pool/cartel formation is against the basic
principle of competitive bidding and defeats the very purpose of an
open and competitive tendering system. Such and similar tactics to
avoid/control true competition in a tender leading to "Appreciable
Adverse Effect on Competition" (AAEC) have been declared as an
offence under the Competition Act, 2002, as amended by the
Competition (Amendment) Act, 2007.

Such practices should be severely discouraged with strong measures.

In case of evidence of cartel formation, detailed cost analysis may be
done by associating experts if necessary. Besides, suitable
administrative actions can be resorted to, such as rejecting the offers,
reporting the matter to trade associations, the Competition Commission
or NSIC, etc., and requesting them, inter-alia, to take suitable strong
actions against such firms.

New firms may also be encouraged to get themselves registered for the
subject goods to break the monopolistic attitude of the firms forming a
cartel. Changes in the mode of procurement (GTE instead of OTE) and
packaging/ slicing of the tendered quantity and items may also be tried.
A warning clause may also be included in the bid documents to
discourage the bidders from indulging in such practices.

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7.17 NEGOTIATIONS FOR REDUCTION OF PRICES
(Rule 173 (xiv) of GFR 2017)
1) Negotiation with bidders for price reduction after bid opening must be severely
discouraged. However, in exceptional circumstances where price negotiation
is necessary due to some unavoidable circumstances, it should be held only
with the lowest acceptable bidder (L1), who is techno-commercially responsive
for the supply of a bulk quantity and on whom the contract would have been
placed but for the decision to negotiate.
2) In no case, including where cartel rates are suspected, should negotiations be
extended to those who had either not tendered originally or whose bid was
rejected because of unresponsiveness of bid, unsatisfactory credentials,
inadequacy of capacity or unworkable rates.
3) Price negotiations may not be considered except under the following
exceptional circumstances:
a) Where L1 price is not considered to be reasonable, and
i) The procurement is done on a nomination basis
ii) Procurement is from single or limited sources
iii) In situations where the requirements are urgent, and the delay in
re-tendering for the entire requirement due to the unreasonableness of
the quoted rates would jeopardise essential operations, maintenance,
and safety - negotiations with L1 bidder(s) may be done for a bare
minimum quantum of immediate requirements. The balance bulk
requirement should, however, be procured through a re-tender,
following the normal tender process.
b) Where there is suspicion of cartel formation, which should be recorded.

4) The decision whether to invite fresh tenders or to negotiate (and with whom)
should be made by the TSC. Convincing reasons must be recorded by the
TSC. The C/A should exercise due diligence while accepting a tender,
ordering negotiations, or calling for a re-tender, and a definite timeframe
should be indicated.

5) Normally, all counter-offers are considered negotiations by other means, and

the principles of negotiations should apply to such counter-offers. For
example, a counter-offer to L1 to arrive at an acceptable rate shall amount to a
negotiation. However, any counter-offer (at the rates accepted by L1) to L2,
L3, and so on in case of splitting of quantities (and in parallel Rate Contracts)
shall not be deemed to be a negotiation. Similarly, dynamic bids in the
Reverse Auction process, are not to be considered as negotiations.

6) After the C/A has decided to call a specific bidder for negotiation, the
following procedure should be adopted:
a) It must be understood that, if the period of validity of the original offer
expires before the close of negotiations, the original offer will not be
available for acceptance. The period of validity of the original offer
must, therefore, be extended, wherever necessary, before negotiations;

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b) The Bidder to be called in for negotiations should be addressed, so
that the rates originally quoted by him shall remain open for
acceptance in the event of failure of the contemplated negotiation;
c) Revised bids should be obtained in writing from the selected
Bidders at the end of the negotiations. The revised bids so
obtained should be read out to the Bidders or their representatives
present, immediately after completing the negotiations.
If necessary, the negotiating party may be given some time to submit
its revised offer. In case, however, the selected bidder prefers to send
a revised bid instead of being present at the negotiation, the offer
should be taken into account. In case a bidder does not submit the
revised bid, its original bid shall be considered.

7) No individual member of TSC or any individual/ official would indulge

in direct discussions / negotiations with the bidders.
8) In the event of inevitable absence of 1 or more committee members,
like on medical grounds/tour etc. and if virtual meetings are also not
possible, nominee from the department of similar status can be
associated in the meeting. However, this point also be brought in the
minutes of the meeting.
9) It will be ensured by all TSC members that, Tender Scrutiny
Committee proceedings (Minutes of Meeting) are prepared and signed
/ e-signed / confirmed via email at the earliest on completion of the
meeting.
10) TSC in its recommendations shall give due consideration to various
GoI directed purchase preference policies as listed in chapter-2 of this
manual and subsequent amendments if any.
11) Purchase Officer will put up the TSC recommendations and purchase
proposal in the prescribed format as per Annexure 7-V (P-252) for
financial concurrence and approval by the competent authority as per
extant DoP.

7.18 REVERSE AUCTION (RA)

There are two methods of Reverse Auctions i.e.
1) Reverse Auction outside GeM
2) Reverse Auction through GeM

7.18.1 REVERSE AUCTION OUTSIDE GeM:

a) A decision to go for Reverse Auction or otherwise shall be taken by
the TSC during techno-commercial evaluation of the bids.

b) NMDC reserves the right to conduct the Reverse Auction (RA) (or) not and
same shall be communicated to all techno-commercially qualified bidders
which will be conducted without eliminating any qualified bidder.

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c) A suitable clause for the above purpose shall be incorporated in the

tender enquiry.
d) There should be at least 2 techno-commercially qualified firms to
participate in the reverse auction discretion of NMDC. MSE/ Make In
India guidelines with respect to Price preference to MSE/ MII seller shall
be ensured after conclusion of Reverse Auction.

7.18.2 PROCEDURE FOR REVERSE AUCTION OUTSIDE GeM:

a) After opening of price bids, if required, Service provider is to be
informed of the date and time of RA. Intimation to be given to all qualified
firms by email regarding date and time of RA and also regarding all
clauses of RA of NMDC & Service Provider (SP).
b) RA shall be done with minimum 2 firms. If only 1 firm qualifies or single
offer is received for any item of the tender, then the item shall not be put
up for RA.
c) It is the discretion of the firm to participate in the RA or not. However, If
RA fails or no firms participate in the RA, then evaluation shall be done
with the original offer of firms in the tender. This also should be intimated
to all firms. The same also may be incorporated in the tender document,
wherever RA is applicable. If RA fails due to any technical fault of Service
Provider/ SRM Portal, the same may be relaunched again after obtaining
approval of competent authority and intimating to all eligible bidders.
d) Start Bid Price (SBP) shall be arrived by NMDC by considering present
L1 price. Normally, destination cost L1 price is to be taken as SBP. SBP
should be approved by HoD (Mat) 1 day in advance before start of RA.
e) The decrement of RA of each item / tender also to be incorporated in
portal. Normally, 0.2% of SBP (rounded off to nearest whole number) is
taken as decrement. However, HoD, Materials can take a suitable
decision on case-to-case basis regarding SBP & Decrement. Decrement
should be approved by HoD (Mat) 1 day in advance before start of RA.
f) Normally, Decrement shall be taken as a whole number rounded off and
not in percentage.
g) Intimate the SBP & decrement of each item to Service Provider and
qualified firms.
h) The bidding of firms in the RA should be SBP minus 1 decrement or
multiples of decrement.
i) RA Start Date and Time has to be communicated to all eligible vendors
by e-mail. The time at which the RA ends in a day and restarts next day.
j) After the finalization of RA, the successful bidder should give the price
breakup of the landed cost by reducing their quoted price.
k) No further negotiation in final lowest price is envisaged after RA.
However, in exceptional cases, negotiation can be done after approval of
C/A.

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l) Purchase preference to MSEs and MII where Reverse Auction is
involved:
For both MSE purchase preference policy and Make In India Purchase
preference policy, the right of MSE or Class I supplier to match L1 price
shall be based on post reverse auction price only and not on the original
price bids.
In case any bidder does not participate in reverse auction, then the
original price bid of the bidder shall be taken as the bidder’s post reverse
auction price.

7.18.3 REVERSE AUCTION THROUGH GeM PORTAL

FOR PROCUREMENT THROUGH GeM, GeM GUIDELINES ON REVERSE

AUCTION SHALL BE FOLLOWED.

7.19 RESOLVING A TIE OF BIDS

In case two or more techno-commercially acceptable Bidders have quoted
identical price bids and the price quoted by them is the lowest among price
bids of all techno- commercially acceptable Bidders, then all the parties who
have quoted the lowest price shall be informed of the tie (name of the other
party should not be disclosed) and asked to submit their best bid within a
stipulated time, optionally.

In case of no submission of revised bid, the original bid by the part shall be
considered as the final offer. In case both parties do not submit a revised bid
or if there is another tie in the revised bids, then the process may be repeated
till the tie is resolved.

7.20 DISTRIBUTION OF ORDER QUANTITY AMONG TECHNICAL

ACCEPTABLE BIDDERS
Many a times, it has been noted that some of the high value consumable
items, such as TCRR bits, Conveyor Belts, OTR tyres etc. are required in bulk
quantity. Normally, full quantity is required to be on L-1 Bidder alone.
However, keeping in view that in case L-1 Bidder, fails to supply the material
in time, there may be huge loss of production and subsequent losses
(sufficient reasons to be recorded) and to avoid such eventuality, the order
can be distributed among two (or) three firms i.e. in the ratio of 70:30 (or)
50:30:20 respectively.

In case the L-1 Bidder can be ordered 70% of the tendered quantity, being
originally lowest and balance 30% quantity can be ordered on L-2 Bidder.
Once it has been decided to distribute the order between L-1 and L-2 Bidder,
L-2 Bidder may be asked to match the price of L1 to avoid any additional
expenditure for placement of order on L-2 Bidder. In case L-2 Bidder does not
agree to match the L-1 price, L-3 Bidder can be asked to match the price of L1
and so on.

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While issue of such tenders, a specific point as indicated below is to be
recorded for transparency.
“The tendered goods are likely to be distributed. The tendered quantity among
two (or) three firms i.e. in the ratio of 70:30 (or) 50:30:20 respectively,
subject to matching of the lowest tender price on destination cost basis.
However, while placing the order, Govt Circular regarding price/ purchase
preference are to be taken care of and negotiations can be held as per the
guidelines issued from time to time”.

7.21 AWARD OF PURCHASE ORDER

a) Immediately after the approval of purchase decision by competent

authority, the purchase officer is required to issue Letter of
Acceptance (LoA) within the validity of offer(s) notifying the approved
Bidder(s) in writing, by email, fax or Registered / Speed Post regarding
the acceptance of the offer.
b) Letter of Acceptance (LoA) should be followed by a regular purchase
order in proper from with detailed terms and conditions.
The purchase officer shall prepare the draft purchase order and the
items shall be verified by the Section Head. No financial concurrence
is required for the draft order and order is to be released directly by
MM Department. MM Department will take the full responsibility to
incorporate all the terms and conditions as per the offer and approval
subsequently.
c) However technical specifications of the order are to be verified by
technical department before order is released.
d) The successful Bidder is to be instructed to furnish the required
Security Deposit, wherever applicable, within a specified period (15
days from the date of issue of LoA/ PO). However, for GeM
procurement, GeM guidelines is to be followed.
e) Before release of purchase order and amendments, the same has to
be reviewed for adequacy wherever necessary. MM Dept. will ensure
the correctness of the price, quality, specifications etc.
f) Purchase Order / AT details needs to be updated in PO Register by
Dealing Officer Annexure 7- VI (P-254).

g) Supplier should be asked to acknowledge the LoA/ Purchase Order by

e-mail/ letter by confirming their acceptance of the conditions laid down
in the LoA/ Purchase Order. Legally communication of acceptance of
offer is considered complete as soon as it is submitted to Postal
Authorities. All delivery liabilities would be counted from the date of
LoA.
h) The time for award of contract should not ordinarily exceed 30 working
days from the date of price bid opening except in cases involving
negotiations, reverse auction and in cases where price justification is
sought.

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7.22 SIGNING OF LETTER OF ACCEPTANCE / PO / AMENDMENT
1) CORPORATE LEVEL:
a) Upto Rs 40 lakhs to be signed by dealing officer and Section
Head.
b) Beyond Rs.40 lakhs to be signed by Section Head and HoD

2) PROJECT LEVEL:
a) Upto Rs 10 lakhs to be signed by dealing Officer and Section
Head.
b) Beyond Rs 10 lakhs to be signed by Section Head and HoD

7.23 PROCUREMENT LEAD TIME

The prescribed maximum lead time for each step involved in the tender
process starting from date of PR initiation to issue of purchase order shall
be as per the Purchase Process Lead Time Chart attached as Annexure
7-VII (a) & (b) (P-255 & 256). However, for GeM procurement, GeM
guidelines shall be followed. All efforts shall be taken to adhere by the
maximum limits for lead time as per this chart and to reduce the lead time
as much as possible. However, in urgent cases the time limits can be
reduced by few days without it being a handicap either to project or the
prospective supplier.

7.24 EXTENSION OF DELIVERY

Liquidated Damages shall be levied against suppliers / contractors in case
of delay in supply of materials beyond the date of delivery specified in
Purchase Order. If the delay in completion of supply is attributable to
NMDC or force majeure condition only, liquidity damages will not be
levied.

7.24.1 DELAY ATTRIBUTABLE TO NMDC / FORCE MAJEURE:

For the portion of delay attributable to NMDC or Force Majeure, Liquidated
damages (LD) are not applicable. Any increase in taxes and duties on
account of statutory increase, fresh imposition of any duty or taxes which
take place during such extended period shall be admissible/ availed. Price
variation, if indicated in the Purchase Order, shall be applicable during
such extended period. However, Price Variation on Force Majeure to be
regulated as per the Force Majeure policy of NMDC.
7.24.2 DELAY ATTRIBUTABLE TO SUPPLIER:
For the portion of delay attributable to supplier, Liquidated damages will
be applicable. Increase / fresh imposition of taxes and duties during the
extended period will be to the account of the party. However, NMDC shall
allow the same to the extent for which Input Tax Credit (ITC) can be
availed by NMDC against these levies. Any decrease in taxes and duties
during the extended period will be availed by NMDC.

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When a supplier request for extension of delivery with reasons for
extension, User Department shall be asked to give its recommendation on if
extension can be given, how many days of extension can be given and if
LD is to be levied. Based on user departments recommendation,
competent authority shall approve the request for extension, while
reserving the right of NMDC to levy LD as per extant DoP (except in cases
where delay is attributable to NMDC / Force Majeure).

7.25 PRE-DISPATCH INSPECTION (PDI)

7.25.1 Pre-dispatch Inspection (PDI) of spares and stores is to check the

conformance of the items with stipulated reliability and specifications on
dimensional and metal characteristics, so that right quality parts reach
user department and prevent substandard parts reaching stores. Pre-
dispatch inspection would be carried out or waived according to nature of
material ordered through Corporation / Company Engineers or outside
agencies like Lloyds etc. inspection procedure would be decided in
individual cases before inviting tenders. Pre-dispatch inspection may not be
insisted for spares of proprietary nature and general stores of reputed
manufacturers.

7.25.2 On receipt of Pre-dispatch Inspection call, consignee is required to

communicate pre-dispatch inspection/ waiver of pre-dispatch inspection
after consulting user department as early as possible. However, in case of
PDI waiver project shall obtain HoP approval (even if procurement was
processed by HO) and intimate the supplier accordingly, with a copy of
intimation to HO wherever applicable.
7.25.3 Pre-dispatch inspection may be carried out at suppliers end to weed out
defective items event at stages of manufacture. In case QAP is applicable,
PDI may be carried out as per approved QAP. Performance tests may
also be carried out for equipments before dispatch at supplier’s end.

7.25.4 In all cases post receipt inspection should be carried out at Receipt
Section before finally accepting the materials/equipments and releasing
balance payments.

7.25.5 INSPECTION CERTIFICATE

The inspection officer would issue the inspection certificate after the
inspection which would indicate various particulars along with details of
items and quantities inspected and accepted and rejected and indicate the
“identification mark” stamped on the accepted materials for its
identification on receipt at the Project. Inspection certificate and Test
Certificate wherein asked should be obtained with dispatch document.

The inspector will clearly indicate the inspected items whether accepted or
rejected. If rejected the detailed reasons should be recorded and supplier
be advised for its rectification of the defects and get confirmation before
dispatch of the materials.

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The inspection certificate shall invariably contain the PO details, items
inspected, items accepted, items rejected (with reasons for rejection).
Inspection officer shall issue dispatch clearance for the items acceptable as
per PO terms.
Inspection certificate would be signed by suppliers authorized representative
and the inspector. A copy / soft copy of the inspection report should be sent
to MM Department.

7.25.6 REJECTION MEMO

In case of rejection on joint inspection at supplier end, the rejection memo
would be signed by the supplier and the inspector. Reasons for rejection
would be given along with all relevant details and the supplier would be
prohibited from dispatching the rejected goods. A copy / soft copy of the
rejection memo should be sent to MM Department.

7.26 FOLLOW UP OF ORDERS & MONITORING OF PROGRESS

The orders placed will be monitored by the respective dealing officer at
Project (which includes POs placed by HO also) till the materials are
dispatched by the supplier and received at projects.
This will include obtaining:
i) Order acknowledgement from the supplier
ii) Coordination regarding pre-dispatch inspection if any
iii) Issuing any amendment, if necessary
iv) Coordination regarding dispatch instructions, mode of dispatch and
destination station etc.
v) Coordination with the HO/ Project and supplier in case of any
problem/dispute arising out of supply.
vi) Coordination with stores for inspection and acceptance of stores.
vii) Orders released including corporate office, shall be monitored by
concerned dealing officer at project MM Department.
viii) This will include pre-delivery period follow up to ascertain the
readiness of the materials on time and post-delivery follow up.
ix) Follow up may be done through reminders, e-mail, telephonic follow
up and physical visits, if necessary, with the suppliers.

PROGRESSING:
Head of the Purchase Section / Dealing Officer of each purchase office would
submit a monthly report of the status of various indent being dealt by the
section to the Head of Materials Management Department showing the
detailed status against each indent under process, indicating the indent
number, description of stores, indent value and items, along with the latest
progress achieved for placing order along with number of items covered and
value there against.
Copies of progress reports shall be forwarded to the user departments. The
above report may be generated through ERP system.

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CHAPTER – 8

8 MEDICINE PROCUREMENT
8.1 PLANNING AND PURCHASE REQUISITION
a) Medicine Procurement planning may be initiated by MM Department
at the Project and the Project hospital, preferably in the first week of
September every year. Purchase Requisitions (PRs) for procurement
of medicines for the next financial year may be raised by the first
week of November of current financial year.
b) ANNUAL PURCHASE REQUISITIONS MAY BE CATEGORIZED AS
FOLLOWS
i) Life Saving Drugs
ii) Proprietary medicines
iii) Vaccines and Antidotes
iv) Tonics
v) Other drugs
vi) General Items and Consumables
c) The Annual Purchase Requisition of medicines may be made by a
committee consisting of in-charge of medical stores and other doctors
nominated by CMO. The annual requirement needs to be approved by
the CMO.
d) Separate Annual Purchase Requisition may be raised by the hospital
for general items like syringes, needles, cotton, bandages, X-Ray
films, laboratory items, sanitary items (Phenyl) etc. MM Department
may procure these items from approved vendors once a year.

e) The hospital may raise Purchase Requisition for other medicines.

f) MM Department at Project, in consultation with the hospital, may
prepare the list of manufacturers of medicines, every year, from whom
the medicine could be procured.

g) MM Department at Project may then write to the manufacturers,

giving NMDC’s standard commercial terms and conditions such as
shelf life, return of short expiry medicines at the time of receipt,
inspection, phased supply etc. for confirmation of their consent to
supply medicines as per the commercial terms and conditions
including the following:
i) The medicines would be supplied by the manufacturers directly or
through their authorized distributor / dealer concerned for the
project.

ii) The medicines would be supplied by the manufacturers as per

their hospital price list ruling at the time of supply including
discounts (in terms of Qty & in terms of Price), if any.

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iii) In case the manufacturer is not willing to supply directly, they may
give the details of their authorized distributor/ supplier who will be
supplying the medicines.

iv) The medicines, depending on the quantity, may be supplied in a

phased manner i.e., 40% initially and then 30% each at two
regular intervals.

In case of any deviation to standard terms and conditions same shall

be submitted for approval of Competent Authority as per extant DoP.

h) After obtaining the consents, hospital price list, applicable discounts

and other details from the manufacturers, MM Department at Project
in consultation with the hospital, should shortlist the manufacturers for
relevant medicines.

i) Vaccines & Antidotes may be purchased from Government Agencies

or from manufacturers of repute / their nominated distributors /
dealers.

j) PROCUREMENT FROM CPSUs

For procurement of medicines that are in the list of 103 medicines
notified by the Government, NMDC shall give due consideration to the
relevant Government policy. The prices of these medicines are fixed
by National Pharmaceutical Pricing Authority (NPPA) and a discount
of 35% is allowed (or) as applicable from time to time.

Based on timely delivery and other parameters, project may finalize

the quantity of medicines to be procured from the CPSUs (IDPL,
RDPL, HAL, KAPL, BCPL) with the approval of Head of Project.

Department of Pharmaceuticals, Ministry of Chemicals and Fertilizers,

OM 50(9)/2010-PI-IV Dtd 10/12/2013

k) GUIDELINES FOR MEDICINE PURCHASE REQUISITION

i) The quantities may be worked out based on the previous year’s
consumption, indent/ order status, stock position at issue/
consumption points and expiry dates of medicines.

ii) The PR should contain details of brand name (not exceeding six)
and manufacturer of the medicines.

iii) In case of proprietary medicines, the PR should be accompanied

by Proprietary certificate given by CMO in the prescribed format
and approved by Head of the Project.
iv) The PR may contain the last purchase rate to help in cost
estimation and also to facilitate vetting by Finance Department.

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l) FLOW OF MEDICINE PURCHASE REQUISITION
i) A committee comprising of officers from MM Department, Finance
Department and the hospital in-charge may review the PR and
record its recommendations.
ii) MM Department shall forward the PR and the recommendations of
the committee to Finance Department for vetting and then to
Competent Authority for approval / sanction.
iii) MM Department shall take procurement action based on the
approved PR.
iv) The whole process may be completed by November every year.

8.2 PURCHASE ORDERS

a) MM Department in consultation with Hospital In-Charge, may prepare
the Purchase Order along with all the terms and conditions.

b) Purchase Order may contain the names and quantities of medicines,

commercial terms such as Unit Price (as per the Hospital Price list
and applicable discounts forwarded by the Manufacturer), Price basis,
Freight, P&F, GST, Delivery terms (phased delivery if applicable),
Payment terms, Consignee and Shelf Life of Medicines.

c) The Medicines supplied should have minimum shelf life on the

date of receipt at NMDC site i.e.
i) Medicines with expiry of one year – Minimum shelf life to be 60%
ii) Medicines with expiry of three years – Minimum Shelf life to be 70%
iii) Medicines with expiry of five years – Minimum Shelf life to be 80%

d) Purchase Order may be issued in the name of Manufacturers only.

However, Manufacturer may either directly supply the medicines or
supply the medicines through any of their authorized dealers /
distributors/ stockist.

e) Wherever quantity is substantial, and supplies are required in phases,

the Purchase Order may clearly specify that 40% of the ordered
quantity only is to be supplied in the first stage and the balance
quantity is to be supplied in two installments of 30% each with an
interval of 4 months between each consignment, after confirmation
from the Materials Department to this effect. Any deviation from
phased delivery schedule can be considered in exceptional
circumstances with the approval of Competent Authority, upon written
instructions issued by the MM Department to that effect.

f) In case of annual Purchase Order value less than Rs. 30,000/-,

supply may be made in 1 installment. However, the order shall be
placed on the authorized dealer / distributor / stockist / manufacturer.

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g) REVIEW OF PURCHASE ORDERS FOR SUPPLY OF LAST
INSTALLMENT:

Thorough review should be done by the CMO / Hospital In-charge

before giving clearance for the 30% final installment.

If any medicine is required before the scheduled supply, the CMO /

Hospital In- charge may obtain specific approval from the Head of the
Project. It may be clearly indicated in the order that the installments
may be supplied as directed.
8.3 PROCEDURE FOR RECEIPT AND ACCOUNTING OF MEDICINES
a) On receipt of the medicines at Central Stores Depot, the
consignments shall be checked with packaging list and after entering
in the relevant register, the packages shall be handed over along with
the documents to the Hospital stores.
b) In the receipt section at Hospital Stores, the consignment may be
opened in the presence of authorized hospital representatives and the
representative from MM Department (at least of the rank of JO).

c) The medicines shall be checked initially for damage / breakage and

against invoice for quantity, batch no., shelf life and MRP vis-a-vis
hospital price list.
d) The medicines shall be taken into stock within a week from the date of
receipt and discrepancies, if any, are to be intimated to MM
Department for further action.
e) Receipt voucher shall contain all these details and shall be duly
signed by Doctor In-charge and MM Department representative. All
the Project Hospitals will use uniform receipt voucher forms as per
HMS package.

8.4 PROCEDURE TO BE FOLLOWED AT HOSPITAL AFTER RECEIPT OF

MEDICINES

a) In the Hospital, all the medicines received in the first two

consignments of 40% and 30% may be marked with NMDC
stamping. Depending upon consumption, the medicines required in
the third lot of 30% may be stamped periodically (say on daily basis)
as per instructions of CMO / Hospital In-Charge.

b) Issue of medicines from Medical Main Stores to OPD and Wards

shall be properly accounted. The medicines returned to Main Medical
Stores are to be taken into stock.

c) Receipts and Issues to be documented both manually in vouchers,

cardex system and to be fed in the Hospital Management System
(HMS) package simultaneously.

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d) Details of medicines with expiry during the next 3-6 months are to be
circulated among all the Doctors and also circulated to sister project
Hospitals on intranet for information and possible prescription. Efforts
may be made to return the medicines within 02 months before expiry,
as far as possible.

e) Expired medicines, if any, may be segregated and annually / bi-

annually processed for destroying in the presence of an authorized
committee. Record may be kept of the same for taking cognizance in
PR preparation for the subsequent YEAR.

8.5 RELEASE OF PAYMENT AGAINST PURCHASE ORDERS OF ANNUAL PRs

a) For release of Payment, a certified copy of the complete hospital

price list and applicable discounts shall be the basis. Material
Department may verify the price list for its authenticity and forward
the same to Finance along with documents for release of payment
after verification.

b) In case of variation in prices at the time of supply, no amendment

letter is required if the clause already exists in the Purchase Order for
payment as per price list ruling at the time of supply.

8.6 PURCHASE OF MEDICINES OUTSIDE ANNUAL PR

a) The medicines required outside the annual procurement may be

procured from Manufacturer / authorized dealer / authorized stockiest
only for supplies on hospital rates.
b) Quantity to be procured through local purchase to be restricted
to a maximum of 5% of annual PR value by recording reasons for
such purchase and approval of Project Head in each case. The local
purchase is to be done as per existing Delegation of Powers.

c) In case of non-availability of medicines (prescribed by external

doctors or due to stock out), the patients may procure the medicines
themselves and they shall be reimbursed for the same. Following
procedure shall be followed to streamline the same:

i) The Project MM Department may enter into tie-up arrangement

with 1 or two local Medical Stores for supply of medicines at the
discounted rate of MRP.
ii) For making tie up an Open Tender Notice may be published in
local newspaper indicating approximate value of purchase of
medicines for 1 year. The tenders may also be published in
NMDC website.

iii) Based on the offers received, project may finalize the agencies
with whom tie up can be made for supply of medicines.

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d) URGENT / EMERGENCY PROCUREMENT

i) CMO may forward the list of urgently required / stock out

medicines along with the details of manufacturer, quantity
required etc. to MM Department along with reason for purchase.

ii) Based on the requisition of CMO, MM Department may issue a

Letter Order to supply medicines to Hospital. In case of
emergency, the medicines can also be supplied against the
requisition of CMO, which is subsequently to be regularized by
MM Department.
iii) Necessary Receipt Voucher is to be prepared at the hospital and
forwarded to MM Department and Finance.
iv) The payment will be released by Finance as per Receipt
Voucher, Letter Order and as per the tie up entered with the
supplier.
v) The details of such medicine procurement are to be put up to
HoP every month.
vi) The same procedure may also be followed for such medicines
where there is a stock out.

8.7 GENERAL POINTS

a) For purchase of sedatives such as Calmpose etc. which fall under
Schedule X and Narcotics and Psychotic drugs, license has to be
obtained from the Drugs Controller and the issue of such medicines
to be recorded as per the regulation.
b) For life saving drugs, the stock position may be reviewed by CMO at
least once every month for replenishment.
c) All the Doctors may conduct surprise checking of medicines and
other items (at least 15 items) every month and the report may be
submitted to HoP on monthly basis signed by CMO.
d) Medicines which are generally of shorter shelf life, or which may
deteriorate faster may not be stocked unless they are essential drugs
like lifesaving drugs.
e) In case of Hospitals at DIOM and BIOM Bacheli, due to high turnover
of the Doctors, the medicines prescribed may be confined to existing
brands as far as possible and any new brands prescribed may be
ordered in small quantities so as to reduce possibility of non-
movement in case of Doctors leaving the Hospital. Such purchases
shall be at the discretion of the CMO / Hospital In-Charge/ Generic
Medicines to be prescribed to avoid stocking of brands.

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CHAPTER – 9
9 VENDOR DEVELOPMENT AND MANAGEMENT
9.1 SELECTION AND REGISTRATION OF VENDORS
a) Whenever a need arises to procure material / components from a new
source, or a new vendor approaches the project / vendor development
cell (VDC) at HO, the following steps shall be taken:
The vendor shall furnish Registration Application form along with
detailed information about the capacity, capability etc. to VDC, HO by
offline mode. The required proforma and information can be
downloaded from NMDC website at www.nmdc.co.in on homepage
under ‘Vendor Empanelment’ title.
The vendor registration process shall be digitized and integrated with
ERP. Offline mode shall be followed till such time.

b) VDC of MM Department, HO is entrusted with processing and disposal

of vendors’ application for registration centrally. If need arises, Projects
can also send their recommendation for registration of new vendors
which may be processed at HO level.
c) If necessary, Expression of Interest (EoI) shall be published inviting
applications for registration of firms / suppliers for supply of various
types of material / components required.
d) For processing of all the applications, a Vendor Registration Committee
(VRC) shall be constituted and the in-charge VDC shall be the
convener of the committee. VRC shall comprise of the following
members:
i) In-charge of VDC (MM Department) – Convenor
ii) Representative from the Production Co-ordination (PC) /
Engineering & Projects Department
iii) Representative from Finance Department
e) VRC shall evaluate the applications and record its recommendations
for enlistment or otherwise. Where found necessary, VRC may
recommend for capacity assessment of the vendor. The following
parameters are considered by VRC while evaluating and
recommending applications for enlistment as vendors:
i) Requirement of additional vendors to widen the vendor base
category wise.
ii) Projected requirements for operational needs of the Corporation.
iii) Import substitution /quality improvement of stores/spares.
iv) Applicant’s experience in a particular category of stores/spares.

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v) Applicant’s performance record as a vendor of other major
industries/PSUs
vi) Specific requirements/recommendations of the PC / EP
Department
vii) Status of the applicant as an ancillary or sub-vendor to major
industries/PSUs
viii) Government directives, if any, etc.

f) The capacity assessment, if required, can be carried out by the

Corporation by engaging its own officials or by engaging a third party
as found feasible. Some factors for waiver of capacity assessment
areas given below:
i) BIS license holder for the stores/spares

ii) ISO certification and

iii) Feedback on quality / past performance of the vendor from other
similar PSUs etc.
g) If required, quality assessment of the stores/spares can be drawn by
placing Trial orders on the Vendor. Trial orders shall be issued by HO
after getting approval of Competent Authority as per extant DoP, except
for explosives and blast accessories. Trial orders for explosives and
blast accessories shall be issued by projects.
h) Capacity assessment report, trial order report (if trial orders are
executed), and other documents of the vendor shall be deliberated by
the VRC which will be convened within twenty (20) working days after
the submission of the reports and all relevant documents. The VRC
shall then record its recommendation as 1 of the followings:
i) To register the firm as an approved Vendor for the specified item /
service category.
ii) Refusal of the registration for the reasons recorded (or)
iii) If required, to carry out re-assessing the capacity of the vendor for
reasons recorded.
i) The recommendation of the VRC shall be put up to the Competent
Authority for approval and the outcome will be informed to the
applicant within a specified time schedule. Competent Authority shall
be the Functional Director of MM department. The whole process shall
be completed within a maximum period of three (03) months after the
submission of all relevant documents by the vendor and the outcome
(acceptance / rejection) shall be communicated accordingly to the
vendor by the VDC. Accordingly, a centralized Vendor master
maintained in ERP system shall be made available to purchase
departments across all Projects / units of NMDC.

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j) There may be deemed registration like creation of specific vendor code
for all government establishments / enterprises, who do not take
initiative to get registered as regular / new vendor with the Corporation.
No capacity assessment shall be required in such cases.
k) In case of tenders where PQC is involved, once the Competent
Authority approves the techno-commercially acceptable bids, all
techno-commercially qualified vendors who are not already registered
for the items in vendor master, shall be registered in vendor master
based on the credentials, documents, performance reports / past order
details submitted against PQC.
Standard PQC terms and conditions are as per Annexure 9-I (P-
257)
In tenders where PQC is not included, techno-commercially accepted
bidders who are not already registered with NMDC may be informed of
the vendor registration process via email, once the tender is
concluded.
l) If there is a change in the name of the registered vendor due to mergers,
acquisition etc., re-registration shall be required. In such cases, new
registration shall be done in the name of the new firm which should
be duly supported by a certificate from the Registrar of companies
incorporating the change in the name of the company. Instances of
inclusion of additional items shall also be treated as re-registration.
m) Vendor meets (especially with MSEs owned by SC/ST and women
entrepreneurs) shall be arranged at HO / Project level for sharing first-
hand information with respect to the scope and requirements of the
Corporation for a healthy ‘partnership relationship’ with vendors. This
will give an insight into the issues related to the Corporation’s quality
standards, compliance requirements etc.

9.2 REGISTRATION OF VENDORS FOR SAFETY ITEMS

a) For manufacturers / suppliers with DGMS / CPRI approvals or BIS
certification for the safety items, no additional test certificates are
necessary. Full details of the valid approval should be submitted during
the registration.

b) For safety items for which BIS / DGMS / CPRI specifications exist but
BIS certifications / DGMS or CPRI approvals are not issued specifically
to manufacturers / suppliers, certificate from testing agencies
recognized by GoI or any government body should be submitted during
the registration. For these items, approval for registration shall be
provisional till the products stand the test of time in actual use.

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c) VRC may accept approval or certification from any other government
body apart from BIS / DGMS / CPRI on case to case basis.

d) For safety items not covered by BIS / DGMS / CPRI specifications or

approval from any other government authority, NMDC Safety
department shall draw up the specifications and manufactures /
suppliers shall submit their product for type testing by testing agencies
recognized by GoI or any other government body. After field trials and
on satisfactory performance these may be granted clearance by
NMDC Safety department for registration as vendor. Full particulars of
such type test certificate and field trial reports may be noted against
the names of the manufactures / suppliers.

e) Representative of Safety department shall also be a part of the VRC in

case of safety items.

9.3 CATEGORIES OF REGISTRATION

a) Registration of firms for supply of indigenous items shall be made in

following categories:

i) Manufacturer
ii) Authorized agents / Distributors of manufacturers
b) Registration of firms for supply of imported items shall be made in
following categories:
i) Foreign manufacturers: Foreign manufactures shall be registered
with or without authorized agents in India, provided they have
necessary arrangements for after sales service in India (if required
for the categories / items for which registration is sought).
ii) Authorized agents / distributors of foreign manufactures
c) Only for those manufactures (domestic or foreign) who do not directly
quote or market their product as a matter of corporate policy,
authorized agents / distributors shall be considered for registration. In
such cases, agency / distributorship agreement with the original
manufacturer should be submitted during registration. The registration
of agent / distributor shall become invalid after expiry of the agent /
distributor’s agreement with the manufacturer. The agent / distributor
may apply for renewal / re-registration once the agent / distributor has
renewed its agreement with the manufacturer.

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9.4 PERIOD OF REGISTRATION
a) The vendors will normally be registered for a fixed period of 3 years.
In case any registered vendor makes an offer against a tender issued
by NMDC and qualifies techno-commercially for the tender, it is an
indication that the vendor is still active and is interested in supplying
materials to NMDC. Therefore, the registration validity of such vendors
shall be renewed for further 3 years from the date of acceptance of
techno-commercial bid.

Vendors who have not techno-commercially qualified in the tenders in

last 3 years, but are willing to continue with registration, will have to
apply for renewal at least 3 months before the expiry of validity period.
Such renewal shall also be for 3 years.

b) Vendor Development Cell is responsible for ensuring the vendors are

reminded on time to apply for renewal. Vendor Development Cell shall
generate a monthly list of vendors whose registration period is about to
expire in the next two months and shall ensure communication to the
vendors regarding the expiry of their registration validity. Reminders
shall be sent to the vendors to renew their registration via their
registered email address. ERP system may be configured to automate
the intimation to vendors regarding expiry of registration and process
for renewal.

9.5 DEREGISTRATION / DELISTING OF VENDORS

Any firm may be deregistered from vendor master after issuing a show
cause and with approval of Competent Authority for any of the following
reasons. These reasons are only illustrative and not exhaustive. The
Competent Authority may decide to deregister the vendor for any good and
sufficient reason. The reason shall be communicated to the firm.
a) If the firm is found to be consistently unsatisfactory over a period of
time against orders placed on them or the firm has scored less than 80
in the annual vendor rating for two consecutive years (without
considering the years in which the firm did not make any supply to
NMDC).
b) If the firm fails to supply materials or supplies short quantities without
any valid reason.
c) Other than in force majeure, If the firm withdraws from the process /
fails to enter into contract / fails to submit performance security etc.
after being declared as bidder.
d) If the firm ceases to exist, or is acquired by or merged with another firm,
or ceases to operate in the category of requirements for which it is
registered.

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e) If the firm is declared bankrupt or insolvent.

f) If the firm is banned / de-registered / de-barred / blacklisted by any

other PSUs/ ministry / government body.

Deregistration / Delisting from the vendor master shall be done with

approval of Functional Director of MM department.
Appeal against the decision of De-registration
i) The Party may file an appeal against the show cause issued by the
VDC / HoD (Materials) for de-registration of the party. Such an appeal
shall be considered within 1 month from the receipt of the intimation of
show cause to the party.
ii) Appellate Authority would consider the appeal and pass appropriate
order which shall be communicated to the Party.
iii) The process shall be completed within 45 days of filing the appeal
with the Appellate Authority.
iv) Appellate Authority shall be Chairman-cum-Managing Director of the
Corporation.
When a delisted vendor approaches for registration again, the vendor will
be re- evaluated as per the procedure followed in the case of new Vendors.
A delisted vendor shall be eligible to apply for re-registration only after a
period of eighteen (18) months from the date of its disqualification.

9.6 DEVELOPMENT ORDER / TRIAL ORDER FOR REGISTRATION

a) With the view to enhance the vendor base, sometimes Development
orders / Trial orders are necessary for any of the following reasons:
i) Trial is required to be done to see the performance for a specific
make/ model before registering the firm as NMDC’s regular
supplier.

ii) To help potential suppliers gain experience / provenness to

enable the supplier to be a regular supplier for NMDC.
iii) For development of indigenous suppliers for import substitution.
b) The decision regarding making trials or otherwise is to be taken by User
Department with the approval of concerned Functional Director.
c) Development / Trial order will need to meet the same requirement on
delivery quality as other orders.
d) Development / Trial orders shall be applicable for any stores/ spares
other than explosives. The firms have to apply with all credentials to
HO, MM department. After scrutiny, User Department may decide
whether any trial is required or not.

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e) Before examination for trials, a budgetary quote needs to be obtained.
The technical specifications of the item and price offered should be
examined with reference to the existing item in use. The price quoted
should however be less than the existing price and, in any case, not
more than the last ordered price. The party should agree to all
commercial terms including Warranty and Performance Guarantee
terms if any.
f) The quantity for the trial order and value limit shall be as per the
nature of the item. The quantity should be bare minimum required for
assessment.
g) Overall quantity procured through all trial orders for any item (for
which trials are required) should be less than 25% of the annual
requirement of the item.
h) In principle approval shall be taken from Functional Director
(Materials) before initiating the trial order.
i) In each case, after approval, a tender enquiry has to be issued to the
firm incorporating all technical details and minimum Guarantee/
Performance parameters and trial period. The tender shall be posted in
CPP portal also to ensure that other interested firms may also join the
process for registration. The tender may also be posted in NMDC
website.
j) The tendering process for trials shall be considered on nomination
basis and approvals shall be as per extant DoP.
k) Payment shall be 100% payment only after successful trial
period and achieving guaranteed parameters. No pro rata
payment shall be applicable. If any failure, the firm has to replace
the materials on free of cost on landed cost basis to establish the
performance. Since 100% payment is made after Trial period, No
Security deposit and Performance Bank Guarantee is applicable.
l) On successful report, the firm shall be registered in NMDC after
approval of Functional Director.

9.7 VENDOR PERFORMANCE EVALUATION

a) For vendor performance evaluation certain parameters and
weightage shall be as shown in the table as under:

Description Code Responsibility Weightage points

Quality Rating QR MMD*& User 50
Delivery Rating DR MMD & User 30
10 + 10
Service Rating SR MMD & User Dept. (MM dept + User Dept)
Total 100

*MMD - Materials Management Department

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b) Quality rating shall be calculated as below:

Quantity accepted
Quality Rating = ----------------------------------------- X 100
Quantity supplied by the vendor

Where the quantity accepted is decided by the user department

based on the inspection with respect to specification/requirements
as furnished in the PO.

c) The Delivery Rating (DR) shall be on the basis of Delivery Index

(DI) which is calculated as under:
Actual Delay in Months
DI = -------------------------------------- X 100
Scheduled Duration in Months
Where actual delay is the time taken in months by the vendor beyond
the scheduled duration given to the vendor as per work order. The
delay beyond 15 days is counted as 1 month.

In case delivery date is extended at the request of supplier, for

reasons attributable to supplier, delivery rating shall be calculated
based on the original delivery date agreed. In case the delivery date is
extended for reasons not attributable to supplier, then the delivery
rating shall be calculated based on the extended delivery date.

d) After calculating the Delivery Index as at 9.7 (c), Delivery Rating shall
be calculated as under:

Delivery Index Marks/Points for Delivery Rating

0 – 5% 30
Above 5% upto 25% 25
Above 25% upto 50% 15
Above 50% 0

e) Service rating shall be decided based on pre-sales service/after sales

service. Material Management department and the user department
can allocate a maximum of 10 points each towards this rating.
f) Vendor performance evaluation shall be carried out once in a year
viz., as at end of December and will be completed within a month.
g) Quality and Delivery score calculation based on formulas in 9.7 (b) to
9.7 (d) shall be automated in the ERP system
h) If during the period of assessment, the vendor has executed more than
1 order, the weighted average of rating for all such orders shall be
taken.

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i) Vendor performance evaluation shall be carried out for the vendors of
the identified significant items.
j) Concerned dept. shall forward the respective service ratings of the
vendors to VDC for final evaluation report.
k) Copies of vendor evaluation report shall be circulated at the project to
Head of project, Head of production, Materials Management
department and concerned user departments.

9.8 VENDOR BANNING

NMDC’s approved policy on banning of business dealings with vendors
shall be followed. The same policy is placed on NMDC Website under
Material and Contracts Management Section.
https://www.nmdc.co.in/latest-links/nmdc-policy-on-banning-of-business-
dealings

9.9 VENDOR EMPANELMENT

a) For critical items / category of items required continuously throughout
the year in large quantities or has to be procured multiple times in a
year, it is advantageous to have empaneled vendors, where items
may be procured by a limited tender requesting only for price bids,
with financial concurrence and approval of Competent Authority.
b) Vendor empanelment is also advantageous for critical items where it
is beneficial to float tenders only to who have registered with NMDC
after successful trials.
c) When vendors are empaneled for a particular item, procurement of
that item may be concluded through a limited tender floated only
amongst the empaneled vendors. The enquiry will not be issued to all
registered vendors for the item.

d) Vendor Empanelment shall be done by corporate level, with the

approval of Functional Director (Materials). List of vendors empaneled
for the select items shall be floated to all projects / units when a new
vendor is empaneled.
e) Vendor empanelment will be specific to a particular item / category of
items. Vendor empaneled for a particular item / category shall not be
deemed as empaneled for another item / category. Vendor should
apply independently for all the vendor empanelment tender enquiries
for which the vendor wants to get empaneled.

f) Vendor once empaneled, will remain in the empanelment for a period

of 3 years and the vendor’s empanelment shall be subsequently
renewed in case:

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1. The vendor is responsive to tender enquiries for the items for
which empanelment was done.
2. The vendor performance is satisfactory (vendor rating of >80).

g) However, vendor empanelment process for all items that have vendors
empaneled, shall be done every year to give chance to new vendors
and other existing registered vendors for getting empaneled.
h) De-empanelment of empaneled vendors may become necessary on
account of various factors including poor vendor rating, bankruptcy,
discontinuation of requisite certification like API certificate, etc.
Approval of concerned Director shall be obtained for de-
empanelment.
i) Empanelment shall not be done for a consortium / unincorporated JV /
any other group of companies not existing as a separate legal entity

j) EMPANELMENT PROCESS
i) Specific items for which Vendor Empanelment is required, is
identified. User Department recommendations shall be taken before
finalizing if an item requires vendor empanelment.
ii) Criteria for empanelment process may include financial capability,
technical capability, quality, and delivery performance criteria.
Technical criteria for empanelment shall be recommended by the
corresponding User Department. It may include specifications,
delivery quality, previous supply experience etc. Criteria for
empanelment may be in line with the criteria adopted in normal tender
process.
iii) After finalization of criteria, Open tender/ EOI shall be floated for
Vendor Empanelment. The empanelment window for fresh
empanelment shall be opened every year for a period of 1 month
within which entries from potential new vendors should be obtained.
Empanelment process shall be completed within 3 months of closing
of the empanelment window.
New vendors, who are not already registered with NMDC, but have
applied for empanelment, shall be asked to undergo the registration
process. On successful registration (including trials if required), the
vendor shall be empaneled for the item / category, provided the
vendor qualifies for empanelment based on empanelment criteria.
iv) Once vendors are empaneled for a particular item / category, limited
tender shall be floated amongst empaneled vendors only for
procurement of that item / category. The tender may insist for both
techno-commercial bid and price bid or ask for only price bids.

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CHAPTER – 10

10 STORES MANAGEMENT

10.1 CENTRAL STORES

Each project will have Central Stores for receiving and storing of all
incoming equipment, spares, and stores etc. till these are issued or
disposed. According to convenience the same would be located at Hill-top
and Base camp and would be under the control of appropriate level officers
reporting to Head of Materials Management Department at the project.

Stores Section at Project will be sub-divided as under for performing

following functions

a) Receipt Section
b) Custody / Issue Section
c) POL Section

10.2 RECEIPT SECTION

a) RESPONSIBILITIES OF RECEIPT SECTION

Receipt Section will be responsible for the following activities.

i) Receipt of dispatch documents and proper recording of details.
ii) Taking delivery of incoming consignments from carriers.
iii) Ensuring proper receipt of door delivery consignments.
iv) Transportation of materials from carriers to Receipt Section.
v) Linking of incoming consignments with purchase orders.
Coordination for inspection of materials.
vi) Preparation/generation of receipt-cum-inspection vouchers
(GRN).
vii) Custody of incoming consignments till handing over to Custody
Section.
viii) Handing over the accepted materials to Custody Section.
ix) Taking claim action regarding rejected/short received / not
received materials with the carriers, suppliers, and underwriters.
x) Checking of Freight bills.
xi) Reconciliation of store in transit.
xii) Coverage of transit insurance for incoming / outgoing
consignments, wherever required.
xiii) Coverage of fire insurance policy for Inventories in Store, POL
depot, COLD godowns etc.

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xiv) Collection & accounting of Depot agreement items.
xv) Maintaining the Outgoing material register.
xvi) Monitoring & ensuring availability of valid Licenses of POL
installations, Gas godowns etc.
xvii) Processing of Payments of freight and other incidental charges to
the carrier.
xviii) Head of Materials/Stores Incharge at Project would be the
consignee for all incoming consignments.
Entire data of Receipt Section shall be maintained in the Standard
formats in the ERP.
b) RECEIPT OF MATERIALS
i) Receipt Section will comprise of main Receipt Cell with a sub
Receipt Cell depending upon the individual unit’s convenience.

For shouldering these responsibilities, the Receipt Section will

perform the following functions and generate/ maintain records as
under.

ii) All incoming consignments will be entered in ERP system

(Transaction code for Gate Entry - ZGE) by the concerned store
official.
iii) All incoming consignments will be entered in the Stores Receipt
register in ERP of the Receipt Section in serial order of receipt
indicating complete details of the supplier, dispatch particulars,
purchase order along with freight particulars. Annexure 10-I (P-
259).
c) MAINTENANCE OF LORRY RECEIPT (LR) REGISTER

All RRs, PW Bills, LR etc. received for incoming consignments would be

serially maintained in the LR Register/ GRN (SAP) showing all relevant
particulars like station of booking, destination, station, mode of
dispatch, purchase order reference, number of packages, freight
payable/paid and amount etc. Annexure 10-II (P-260).
d) COLLECTION OF CONSIGNMENTS
i) All the pending RRs, PW Bills, and LRs will be regularly presented
to the respective carriers by Stores Official for taking delivery of
the consignments there against. In case the respective
consignments are not received by that time, necessary
endorsements will be made on these dispatch documents to avoid
any subsequent claim regarding wharfage and demurrage charges
etc. by the carriers.
ii) On arrival of the consignments the Stores official will examine the
consignments for any outwardly visible damage to the packages.
In case of any damage, he will be asked for open delivery of the
consignments.

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iii) Wherever required, open delivery would be taken in association with

representative of concerned Technical Department for correct
identification of items along with concerned purchase order and supplier's
bill.

iv) In open delivery cases the package would be got reweighed before
taking delivery.
v) Payments of freight and other incidental charges shall be paid as per
terms and conditions of PO on case to case basis.

vi) In case of any short receipt of any package Stores Official would ask for
shortage certificate from the carrier.
vii) In case the consignments are not taken delivery within the "free allowed"
time, the carriers charge demurrage / wharfage charges for such delays.

viii) Necessary approval for payment of demurrage/wharfage charges should

be sought on weekly or monthly basis from the competent authority with
justification for such payments.

ix) The packages taken delivery from the carrier will be brought to the
project by the store’s official ensuring its safe handling, avoiding damage
in loading, transit and unloading etc.
x) On arrival at the Receipt Section, the concerned stores official will enter
the details in the SR Register.
xi) The packages will be opened, and items will be tallied with the copy of
bills already received by the Receipt Section to ascertain correctness of
the number of items and quantities dispatched and received there
against.
xii) Normally no material would be issued to the User Department from
Receipt Section. But in case of extreme urgency, the Receipt Section
could allow the material to the User Department against proper Goods
Issue Voucher duly acknowledged. In such cases the GRN with
remaining items and Goods Issue Voucher would be handed over to
Custody Section for posting in Stores Ledger.
e) CONVEY NOTE SYSTEM
i) In case the consignment is required to be sent to other stores, the
documentation should be made as per Convey Note (Annexure 10-III P-
261). The use of convey note shall be restricted to movement of
consignments between stores within the project.
ii) In case of issue of materials from receipt section for testing prior to
acceptance of material, the item shall be handed over to inspecting
authority on convey note, with appropriate gate pass.

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f) INSPECTION
i) Concerned User Department will be requested by the Receipt
Section in charge to carry out the inspection of the materials
received.

ii) Once the cases are opened, inspection to be done immediately and
the materials should be moved to the custody with proper
documentation.
iii) Pending GRNS will be regularly reviewed for early clearance at
various stages by the Receipt Section Incharge and also by the
Central Stores Incharge.
iv) Pending GRN would be reviewed regularly by stores Incharge &
Head Materials.
v) Any case of delay of inspection would be reported to Head Materials
for taking up with concerned Head of the Department and if
necessary, brought to the notice of Head (Project).
vi) The receipt section will try to ensure quick clearance of the incoming
consignments by coordinating with the inspecting officers and with
Custody Section so that the limited space in Receipt Section is
again available for fresh consignments.
vii) The responsibility for safe custody and accountability of the
incoming consignments would remain with the receipt section until
the same are handed over to the custody section.
viii) Bulk materials like H S D and Petrol are directly decanted from
Road Tankers to the underground tanks under Custody Section, but
its accounting, dip reading before decanting of the tanker in the
underground tanks are to be taken jointly by the receipt section and
issue section storekeepers.
ix) The receipt vouchers will be prepared accordingly by the receipt
section and handed over for acknowledgement to the custody
section on tanker basis which will be considered as one
consignment.

x) The tanker receipts will also be entered in the DRS/SR register in

ERP and accounted like other consignments.

xi) Any case of delay of inspection would be reported to Head Materials

for taking up with concerned Head of the Department and if
necessary, brought to the notice of Head (Project). A weekly
statement of pending inspection cases should be generated /
prepared & submitted to HoD Materials for onward advice to
concerned HoDs/ discussions during meetings for timely inspections
& payments.

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xii) The Inspection Officer will inspect the materials and indicate the
accepted quantities in the "Accepted" column of the Quality Parameter
in QM module of ERP. The rejected quantities would be indicated
under "Rejected column" and the reasons for rejection will be
recorded in a separate tab in QM module of ERP. In case of online
transactions acceptance (GRNs generated from ERP system),
physical signatures are not required from Inspection officer.

xiii) The accepted quantities of the items will be handed over physically to
the concerned storekeeper in the Custody Section along with GRN by
the Receipt Section Storekeeper.

xiv) GRNs would be system generated through ERP Pending GRNs will be
regularly reviewed for early clearance at various stages by the Receipt
Section Incharge and also by the Stores Incharge. Pending GRNs will
also be regularly reviewed by Head of Materials at Projects.

xv) After completion of GRN inspection by user dept, Receipt Section will
forward the GRN with required Documents to finance dept as per PO
terms and conditions to release the payment to supplier.

10.3 NON STOCK ITEMS

a) Accounting of Hospital Items

Consignments meant for project hospitals would also be received in
the receipt section and entered in the SR Register. This will be drawn
by the Hospital Incharge who would acknowledge the consignments
and account the same at the hospital store keeper.
Medicines consignments or hospital stores would be handed over
directly to the hospital as a whole for direct accounting by Hospital
Incharge / store keeper attached to the hospital.
b) Accounting of Stationery Items
Stationery items are to be stocked at stores and are to be issued
to the respective department. However, issue of stationery items
will be regulated by Personnel dept. who raise the annual
requirement also.
c) Accounting of Chemical Lab Items
These are special items meant for chemical lab at the project and
would be inspected by the chemist in-charge who would inspect
and draw materials according to his requirement.

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10.4 CUSTODY / ISSUE CELL
a) Custody and Issue Cell will be responsible for the following functions:
i) Keeping a safe custody of material inside the godowns as well
as in the open yard.
ii) Undertaking periodical preservation action to ensure that
materials are not allowed to get damaged / deteriorated in
storage.
iii) Arranging issue of materials against proper authorization as per
the powers of delegation.
iv) Accounting of materials returned i.e., used, scrap materials etc.
v) Examine frequently the condition of fencing, lighting, locking
arrangements of godowns and main gates, security checks etc.
and take remedial measures wherever necessary.
vi) In case of POL depots, proper care/safety is to be followed with
displaying board of “NO SMOKING“ etc. Fire extinguishers and
other safety appliances are to be maintained properly. The area
should be properly fenced.
b) The Custody Sections will be located in fully covered lockable
godowns along with open store yards adequately fenced and
illuminated for proper security.
c) Custody section will be the custodian of all the inventory held by the
respective project and would be under the control of an officer of
appropriate rank.
d) This section will be sub-divided according to the location of the
requirements and nature of equipments and stores and would be
staffed by adequate number of supervisors and storekeepers.

e) This section will be responsible for safe custody, preservation, issues,

accounting and physical availability of materials received by the
project.
f) CUSTODY SECTION ACTIVITIES
i) Receiving the accepted materials against respective purchase
orders, depot transfers, LPOs, through receipt section with the
GRNs, its verification of the items and quantities.
ii) Thereafter entering the details of items in bin, indicating the
location, in ERP system. Physically placing the stores items in
Almirahs, Racks, floor, or yard etc. according to the nature of
material at those locations. While doing so, the physical
suitability of items of fresh receipt should also be checked about
item in stock, if any.
iii) Acknowledging the fresh receipts to the receipt section after
indicating the "balances after posting" figures on the GRNs.

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iv) Issuing the materials against reservation raised by the respective
user. Goods Issue voucher shall be generated in ERP system when
the materials are issued.

v) The Goods Issue Voucher through ERP signature of store

keeper and stores in-charge is not required.
vi) Goods Issue Voucher will be checked by the security staff as a gate
pass for taking out the materials issued.
vii) The principle of first-in-first-out should be generally adhered to. In
particular, perishable spares like 'V' belts with a low shelf life should
be identified and the FIFO method of issue, should be practiced.
10.4.1 Custody and Issue Cell would generate/maintain the following
documents:
i) Surprise stock checking register in SAP (Physical Inventory
Verification) by various officers of store department. Annexure 10-IV
(P-262).
ii) Dip register for the underground tanks for receipt/issue of petrol,
diesel Annexure 10-V (P-263). Petrol and Diesel tanks dip register
will be maintained separately for each underground tank and dips
taken and recorded every day by the concerned storekeeper in the
register.
iii) Reconciliation of discrepancies in stocks wherever necessary
iv) Entire data of Custody and Issue Section shall be maintained in the
Standard formats in the ERP.
v) Transfer of stores from 1 store depot to another stores depot or
project would be made under Stock transfer order in ERP system.

10.5 STORAGE AND PRESERVATION OF MATERIALS

THE FOLLOWING GUIDELINES SHALL BE FOLLOWED FOR STORAGE AND

PRESERVATION OF MATERIALS

1) Upkeep of the materials to avoid any deterioration in storage which

would include not only cleaning, dusting but also applying proper rust
preventive and respective preservatives to safeguard life of stored
materials against weather conditions sun and rain.
For carrying out an effective preservation programme, factors such as
economic aspects, period of idleness of a part, condition of the nature
of exposed surface as well as applicability of specific protectives to be
applied should not exceed the cost of the part to be preserved.
2) Heavy materials not likely to be affected by exposure to sun rain etc.
will be kept in the open yard at proper locations, properly stacked and
in easily retrievable manner.

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3) Necessary name plates etc. indicating sizes would be kept by the side
of such materials. Code Nos. to be painted for identification of the item.

4) Materials of similar nature would be kept side by side.

5) Items which are easy to stock in a particular fashion would be kept as

such.
6) Smaller items would be kept in upper portion of the pigeonhole racks
while heavy and bulky items in the middle and lower compartments of
the racks.

7) Heavier items would be kept on the ground according to the nature of

the materials.

8) Rubber items such as tyres, tubes, 'V' belts, flaps etc. would be kept
away from sun and rain to avoid deterioration in storage and preferably
should be kept in air-conditioned chambers to avoid deterioration in
storage.

9) Vulcanizing materials and splicing materials which have short shelf life
should be kept in air-conditioned chambers to avoid any reduction of its
shelf life. The shelf life would be indicated on bin locations in ERP
system for timely intimation to user departments for its utilization.

10) Machined polished surfaces should be protected against rusting by

keeping them in original packages with rust preventives.

11) Bearings should also be kept in the original packings to avoid any
deterioration due to rusting and if required special chemical should be
applied to prevent rusting.

12) Filter elements should be kept in the original covers an away from dust,
rats etc.

13) Bolts, nuts etc. should be dipped in diesel/to give protective layer to
avoid rusting of threads.

14) Lubricant drums and transformer oil drums should be kept horizontally
with the lid in 3‘O clock/9‘O clock stock position to avoid minimum
leakage. Grease drums should be kept in vertical position.

15) Tyres especially OTR should be rotated by 90 degrees every month to

avoid any deformation of their shape due to its own weight. French
chalk should be applied periodically.

16) Conveyor belts drums being a heavy and needing crane handing which
can not be kept inside godowns, should be covered through tarpaulins
to protect against sun and rain. The drums should be jacked up on
stands to avoid direct contact of conveyor belts with ground.

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17) Materials kept inside the racks should be arranged in such a way that
they do not project outside the racks.

18) The racks should be arranged in straight line with back-to-back

arrangement and leaving sufficient passages in between various rows
for the movement of ladder/trolley and incoming materials.

19) Similarly, side pathway gallery should be provided with sufficient space
to enable free movement.
20) All pilferable items would be got stamped with words NMDC where this
would not damage or injure the parts. Such pilferable items should be
identified at indent stage itself and provided in the orders for such
Stampings or engravings through the manufacturer as far as possible
and should be kept in almirah as far as possible under lock and key.

21) STORES PRESERVATION

Proper materials storage is important and goes a long way in
conserving the spares.

22) Pilferage and Volatile stores and items likely to be affected due to
humidity etc. will be kept properly secured inside the steel
almirahs/steel racks in the store godowns, which will be locked by the
respective custodians who have physical control over the stores under
their charge.

23) All ferrous spares should be given a protective coat of paint/varnish and
stored.

24) Precision spares like instruments, electronic and electrical spares, ball
and roller bearings should be covered in polythene bags, enclosing
moisture absorbent chemicals like silica gel etc.

25) Precision spares should be maintained in dust free air-conditioner

rooms without sunlight and moisture.

26) French chalk powder should be sprinkled whenever possible on rubber

items like tyres, tubes, hoses, “V” belts etc.

27) Items like electrodes should be kept intact in original packings and kept
in dry storage room with some heaters to avoid excess of moisture
effecting the coating.

28) Vertical stocking of grinding wheels with partitioning in between is

necessary so that the faces do not come int contact with each other.

29) Strip heaters in all high voltage motors, LT motors should be provided
to avoid moisture entering into the motors.

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30) Compressors and turbines of multistage pumps should be rotated on
their bearings every quarter to prevent stagging /clogging.

31) Anti-rodents and insecticides measures should be taken on regular

basis.

32) Shafts gears and impellers must be stored horizontally after painting
with dewatering protecting films such as Rusgard, Rustoline etc.

33) Fasteners and screws which are kept in the racks may be treated with
hard preservation films.

34) Perishable spares like, “V” belts with a low shelf life should be identified
and the FIFO method of issue, should be practiced.

35) All transactions of receipts and issues are to be routed through stores
duly preparing the receipt vouchers and issue vouchers.

36) Transfer of stores from 1 store depot to another stores depot or project
would be made under stock transfer order in ERP system (Annexure-
10-IX a &b).

37) For handling stores inside the godowns and in the yard adequate
trolleys would be provided and similarly for reaching top levels of the
steel racks, mobile ladders would be provisioned for use.

38) CEMENT GODOWNS

The roof and sides of cement godowns should be completely leak
proofed to avoid any entry of water or moisture in the godowns. Cement
bags should be kept on raised platforms/wooden planks/CGI sheets to
avoid moisture reaching the bags from the godown floor. Not more than
10 bags should be stored one above the another and the top of the
stake should be got covered with good tarpaulins. Minimum wall
clearance of 3‘Feet should be maintained.

39) The storekeepers, supervisors, stores officers would be always alert

and watchful against any attempts to pilfer materials or manipulate any
entries in stores records for which consistent review and checking
would be required.

40) HOUSE KEEPING

Housekeeping in the custody section will be a regular feature. The

stores will be kept properly cleaned and neatly arranged at the
indicated locations.

Store racks and steel almirahs used for storing the materials would be
serially numbered each pigeon hole and different compartments would
be fully identified by numbers, which would be used to show the
location of items.

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10.6 PHYSICAL VERIFICATION OF STOCKS

1) The physical verification of stocks of different items will be

systematically verified not only by the storekeeper concerned but
also by the concerned officer in charge.

2) Such verifications would be carried out and items would be picked at

random in different store groups. The discrepancies found if any, in
the physical verification or locations of the materials would be
recorded in ERP system.
3) Surprise verification of some of items of stores at random would also
be carried out by Stores In-charge and also by HoD (Materials) at the
project.
In addition, surprise stock verification would also be done by the
nominated HoDs/ Section I/Cs of various departments of the projects
as per the no of inspections & quantum of items (to be verified) as
decided by the project head.
4) These surprise checking will be in addition to the perpetual stock
checking being undertaken by the stock-verifiers under the Finance
department. The discrepancies found during these stock verifications
or surprise checking would be explained and reconciled with the
reasons.
5) The book balances regarding such discrepancies will be immediately
brought in line with the physical balance count by preparing
necessary corrective receipts/issue vouchers and posting the same
and releasing the copies to the Accounts.

6) The explanations given for the discrepancies would be critically

examined by Head of the MM Department before recommending for
its reconciliation to the Finance.
7) All stock verification details and discrepancies found shall be
recorded in ERP system.
8) Monthly report is to be forwarded by Head of project to concerned
director and for onward submission to vigilance and copy also to be
sent to HoD (Materials) at Corporate office.
9) The ERP system records regarding such discrepancies will be
immediately brought in line with the physical balance count by
preparing necessary corrective GRNs/ Goods Issue Vouchers and
posting the same and releasing the copies to the Accounts.

10) Annual consumption & stock verification w.r.t DIP and Book
Balance shall be carried out by both Finance and Materials
executives on 31st March as per Circular at Annexure 10 – VI (P-
264).

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10.7 GATE PASSES
1) The Gate Passes for the consignments would be generated in ERP
system by concerned department.
2) Gate passes will be issued through ERP system for temporary exit of
materials from Receipt Section for trial or testing in User Departments
before final acceptance.
3) RETURNABLE / NON-RETURNABLE GATE PASSES FOR
OUTGOING MATERIALS
4) Returnable gate passes are to be issued through ERP system in case
materials are issued to outside agencies for repair/ overhauling of
assemblies/ items, calibration of equipments etc. The concerned
materials would be routed through central stores.
5) Non-returnable gate pass shall be used through ERP system for issue
of materials to outsiders to whom rejected materials are returned after
settlement of case, issue of scrap/ obsolete etc. sold to bidders under
auctions etc. or under those situations where the issued materials will
not be returned to stores.
10.8 CLAIMS
1) Immediate action would be taken after inspection in respect of materials
invoiced but not accepted/received due to various reasons such as:
a) Materials are not as per specifications of the order.
b) Materials are received short.
c) Materials are received in damaged/broken condition.
d) Non receipt of consignment compared to invoice.

2) After inspection, in case of any discrepancy, the discrepancy shall be

properly recorded and the Receipt Section will raise discrepancy report
to the supplier with a copy to Purchase Section, underwriters and
Finance with reasons for rejection/short received/damaged.

3) All discrepancies shall be properly listed out in the Discrepancy

Register and followed up periodically.
4) When materials received in outwardly damaged condition, broken
packages and open delivery is taken from carriers, concerned packages
will be retained by Receipt Section for getting the complete
consignment weight for supporting the claim for shortages/damages
and should be kept safely till survey is conducted.

5) The rejected materials will be kept separately under the custody of

Receipt Section till these are accepted / replaced or returned to the
supplier or disposed off otherwise.

6) All pending rejected materials cases will also be periodically reviewed

from discrepancy reports for early settlement of the cases.

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7) All claims lodged on the carriers and underwriter would be serially
numbered in a Claim Register.
In case of imported consignments, if any shortage/breakage/damage are
noticed in the port, the claims responsibility lies on the clearing office at
port. However, if the shortage/breakage/damages are noticed during
the transit from port to destination, the claim responsibility lies on
ultimate consignee.
8) In case of any consignment becoming overdue for delivery (one month
in case of road dispatch), immediately the claim would be lodged with
the respective claim office of the carrier with a copy to the underwriter.
9) In case the concerned consignment is located and delivered by the
carrier later on, the claim automatically gets repudiated. Due intimation
needs to be given to Finance and carrier.
10) Claim in case of non-delivery of packages, short delivery of
packages/items or due to damages in transit are also to be lodged
within the permissible period from the date of dispatch to avoid it
becoming a "time-barred claim".
11) The claim should also indicate full value of the claim, billed cost-plus
freight, incidentals and necessary documentary proof should be
provided and information by E-mail.
While forwarding original shortage/damage certificate to claim office,
photographs / soft copy of the same should be retained.
The claim file no. indicated by the carrier on acknowledgement of such
claim should also be quoted in future references.
12) Claims are to be regularly followed by officer-in-charge of stores,
reviewed by Head (Materials) for any lapse in non-filing of claims or late
filings of claims or incomplete filing of claims or non- furnishing of
required details/ documents to be conducted as they would lead to
rejection of the claims and consequent loss to the Corporation /
Company. Hence, high priority is required to be given for timely lodging
and regular follow up of claims in time by Receipt Section and officers
of the stores/Purchase. Personal follow up may be resorted in case of
old claims.
13) Purchase Section of MM Department and Finance Department would
also be kept informed of all claims lodged and its progress and
settlement.
14) Claims settled / rejected shall be intimated to the Purchase Officer
concerned and Project Finance. Unsettled claim amounts are to be
examined in detail and if required competent authority approval is to be
obtained to square up the old claims case.
15) All claims with suppliers/carriers/ underwriters for indigenous supplies
will be filed and processed by stores.

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16) CLAIMS ON IMPORTED CONSIGNMENTS

a) In case of imported consignment, initial claims with the steamer agent
for non- delivery or shortages or damages established at the port will be
lodged by Clearing Office on consignee at port within permitted period.
b) Claims for excess customs duty paid, refund would also be lodged
within time allowed by the clearing Office or by clearing agent at the
concerned port regarding the respective consignments with a copy to
concerned project consignee and Purchase Office.
c) Open appraisement in case loss/damage/apprehensions should be
asked at port of unloading and claim lodged by Clearing Office or by
clearing agent at port as, the case may be along with simultaneous
claims on the underwriters with copy to Project consignee and
Purchase Office.
d) Claims with Steamer Agents and Customs would be pursued till settled
by Clearing Office/Clearing Agents at port and ultimate consignee and
paying officer being kept informed. But claims with underwriters would
be taken over by ultimate consignee at the project after its initial lodging
by Port Office or Clearing Agents.
e) Claims would be regularly followed up and reviewed from the Claim
registers and personal follow up resorted in cases of old claims.
f) Claims settled/rejected shall be intimated to the Purchase Officer
concerned and Project Finance. Unsettled claim amounts are to be
examined in detail and if required competent authority's approval is to
be obtained to square up the old claims case.
g) A claim amount settled by Steamer Agent/Carrier would be intimated to
the Underwriter and claim amount is reduced to that extent with request
to settle the claim for balance amount.
h) The claim cannot be made as source of income but only to cover the
loss. Credit to the extent claim is settled would be passed on to the
concerned project by Clearing Offices.

10.9 SECURITY ARRANGEMENT AT STORES

All the store assistants will lock their godowns properly at the closing of the
shift to avoid any theft or pilferage. Similarly, stock-yard main gate also
would be kept locked during non-functioning hours.
1) Watch and ward duties will be performed by the security staff round the
clock under CISF who would guard the stores and also patrol the store
yard.
2) The store yard will have at least 15ft high chain link 2" x 2" fencing with
another 2ft bent angles at the top with the barbed wire stripping of
concertina coils to prevent any entry in the store-yard. Store yard will be
adequately illuminated with floodlights during night hours as a security
measure.

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3) The stores godown roofs would also be checked periodically against

rainwater leakages or entry of fog /mist through ventilators during
monsoon.
4) All entries in the store premises will be restricted to only Corporation /
Company employees visiting stores in connection with inspection or
issue of materials. Entry of outsiders like suppliers etc. in the stores
would be regulated through entry passes and necessary record of such
entries would be maintained at the store gate. These passes would be
issued by CISF/MM dept./Mines Manager.
5) CCTV cameras must be installed at vulnerable places inside the store
godowns as well as main gate with monitoring control room for better
watch and ward.

10.10 FIRE PREVENTION AT STORES

As lot of inflammable materials will be stored in the central stores, it is

necessary that adequate fire prevention arrangements/precautions are
taken to avoid any mishap due to fire. In this connection the following
measures would be strictly followed:
a) Stores godown, store-yard and storage area around petrol, diesel
tanks, lubricants etc. will be declared strictly as "no-smoking zone".
Prominent boards with "No-smoking" painted thereupon would be
displayed at all such places.
b) Adequate number of suitable fire extinguishers would be provided at
proper places to combat general fires, oil fires and electric fires.
Adequate numbers of fire buckets with sand and some with water would
be kept in stands duly filled to be used in case of any eventuality of fire.
If required, fire hydrants should also be provided at vulnerable places in
the store yards.
c) Though fire-fighting arrangements and maintenance of the firefighting
systems would be under the control of CISF, the stores staff working in
the vicinity of such areas should also be conversant with use of
firefighting systems to meet any emergency.
d) Drainage arrangement with adequate slope would be provided in places
of storage of lubricants, paints, varnishes etc. so that any leakage to be
drained off as per norms from the storage area.
e) Cotton waste, paints and other inflammable materials should be stored
separately. Similarly, chemicals and corrosive materials should be
separately stored.
f) During night-time when the store is closed, it should be ensured that the
main switch of stores is switched off to avoid electrical short circuiting
and consequent fire hazard.
g) Smoke detectors should be installed in the stores at vulnerable places.

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10.11 COLLECTION OF SCRAP AND USED MATERIALS
1) User dept should return the serviceable partly used items item with
Goods Return voucher. Obsolete items returned to stores shall be
accounted in ERP with Rs.1 nominal value (Since NIL value is not
acceptable in ERP system).
2) RETURN OF SCRAP MATERIALS
a) Scrap materials will normally be returned to stores to the extent it
is practicable. Such items are to be accounted by weight / numbers
wherever applicable The User Departments after using the issued
materials would return the corresponding scrap or old spares to
the stores for custody and disposal against Goods Return voucher.
Such materials will be sub-grouped according to the nature of the
materials such as old tyres, old conveyor belts (nylon separate
and steel cord separate) empty barrels, old spares of HEM, sub-
grouping non-ferrous items like bushes separately, radiators,
dynamos, starters, aluminum items separately and accounted by
weight/nos wherever applicable.

b) Similarly, old batteries would also be accounted separately by

numbers. Even cuttings and borings from the machine shop would
be returned to store for disposal. This would be accounted
separately by weight according to the nature of items.

c) Structural steel cut pieces left after use in fabrication jobs would
also be returned to stores. These will be received by weight in
separate identifiable lots
d) Other miscellaneous scrap items like electric fans, water-coolers,
air-conditioners, typewriters, steel furniture, hospital items etc.
would be returned to stores and will be made in separate lots.

e) All such scrap items received will be listed and got surveyed by
survey committee before offering the same for disposal by tenders
or auction.
No scrap unserviceable items should be kept besides the stock items.
The scrap items are to be stocked in a properly designated place with
due indication of the nature of scrap. A separate godown should be
earmarked for scrap items prone for pilferage, such as
copper etc. under proper lock and key.

3) In case of new and unused material is returned through a Goods

Return voucher, the User Department is required to indicate previous
Goods Issue Voucher reference against which the material was
initially drawn.
4) It will be the responsibility of the User Departments to return all the
scrap/used materials lying in their works to stores against proper
Goods Return voucher. Annexure 10-VII (a) & (b) (P-267-268).

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10.12 RETURN OF OLD EQUIPMENTS TO STORES

1) Old equipments and machinery returned to stores against return

vouchers indicating the reference of replacements or otherwise would
be covered by corresponding return vouchers giving full details and
would have all its assemblies fitted.

2) No cannibalization will be allowed from any of the equipments returned to

stores for disposal before prior approval of the Competent Authority.
Procedures regarding cannibalization is to be followed as per the
circular no. PROD/MISC/92 dated 1st October 1992.
Annexure 10–VIII (P-269).

10.13 CALIBRATION BY WEIGHTS AND MEASURES DEPARTMENT

The weighing machines in use would be got periodically tested for

accuracy through Weights & Measures Department and got stamped
accordingly. Similarly, petrol and diesel dispensing pumps would also be
got periodically checked and got sealed to ensure correct quantity
deliveries.

10.14 HSD AND PETROL RECEIPT AND STORAGE

1) The GRNs will be prepared by the receipt section and handed over for
acknowledgement to the custody section on tanker basis which will be
considered as one consignment.

2) Proper licenses for storing HSD and Petrol would be obtained under
Explosives Act and these licenses would be properly displayed in the
Petrol bunks. These licenses should be revalidated before its
expiry.

10.15 MISCELLANEOUS CONSIGNMENTS

Any miscellaneous consignments pertaining to the project school, CISF

etc. would also be received at the Receipt Section and would be dealt like
other consignments. They may either be stock or non-stock items. However,
consignments issued for other than items meant for NMDC department will
be regulated by administration / as decided locally.

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CHAPTER – 11

11 OBSOLETE DECLARATION AND DISPOSAL

11.1 OBSOLETE ITEMS

Obsolete spares are those spare parts which are not used and which have
economic life but which are no longer useful for company's operations due to
many reasons. These items are different from Surplus spares which have no
immediate use but have accumulated in course of time and are not likely to be
consumed in future.

a) Obsolete category will cover the following groups of equipments,

stores and spares:
i) Equipments which have become obsolete due to receipt of
replacements as per approved replacement programme.
ii) Equipments which have become obsolete due to other reasons and
where no replacements are contemplated.
iii) Spares declared obsolete owing to the related equipment itself
having been declared obsolete.
iv) Stores and Spares declared obsolete being in excess of the
anticipated requirements for the next three years
v) Stores other than spares obsolete to the anticipated utilization for
the next three years, except items of perishable nature losing value
with time.

b) Spares which have economic life but are no longer useful for
company’s operations may be declared obsolete. Various reasons for
spares declared as obsolete include:
i) Sudden change in new technology or design change.
ii) Change in product design, leading to entire stock of spares of old
machinery becoming obsolete.
iii) Adaption of standardization and elimination of non-standard
varieties making old machinery spares obsolete.
iv) Cannibalization when practiced on a regular basis.
v) Wrong indenting by user department.
vi) Bulk buying to take care of discounts and transportation economy
without considering shelf life, storage space requirements and
technological changes leading to obsolete spares parts.
vii) Excessive importing of spares with equipments for availing dual
benefits, which exceed the life of equipment.
viii) Importing of lifetime requirements of spares for fear of non-
availability later on resulting in obsolescence.

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ix) Adapting overcautious approach by treating every spare as insurance
item for unforeseen emergency
x) Purchase in anticipation of expansion which may not come off.

11.2 GUIDELINES FOR DECLARING EQUIPMENT, SPARES, EQUIPMENT,

SPARES & STORES AS OBSOLETE

a) Inventory which has not moved for more than 5 years would be initially
reviewed by the Material Control Section of the unit concerned on annual
basis with a view to ascertain as to why it has not moved during the last
5 years or more and what are its chances of utilization now.

b) Non-moving items which are no-longer required by the Corporation /

Company for its immediate or near future use, during the next 3 years or
more would be processed for declaring obsolete through a survey
committee constituted by the head of the project consisting of officers
from technical department, finance department and materials
management department.

The committee would go into the background of the items as to why it

was procured, since how-long it has not been moved, and the reasons
for its non- utilization at the site.

Whether the items were continued to be received more than once in spite
of being non utilized would also be taken note of and analyzed for
reasons as to how such receipts were arranged although there was no
consumption of that item.

c) The Committee's recommendations giving complete history for each item

proposed to be declared obsolete would be submitted to the Head of the
project for his consideration and approval after finance concurrence.
Lists will be prepared and circulated to User Departments for drawl
before obsolete declaration.

d) THE ITEMS FOR WHICH THERE IS NO POSSIBILITY OF USE COULD

BE DUE TO REASONS AS UNDER:
i) The items are obsolete due to the corresponding equipment having
become obsolete.
ii) The corresponding equipment has been phased out or replaced by
another model thus rendering the spares as obsolete.
iii) Due to change in operation system or modifications made in the
equipment rendering the corresponding items as obsolete.
iv) Change in end product specifications resulting in corresponding
items becoming obsolete to requirements.
v) Over stocking of items compared to its anticipated rate of
consumption due to non-adhering to overhauling programme or
getting extra life between overhauling.

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vi) Due to repair/reconditioning decisions versus replacements
vii) Due to reconditioning and reuse of parts resulting in non-drawl of
stocked items such as re-building of bucket teeth and
reconditioning of electric motors.
viii) Replacing assemblies resulting in non-movement of corresponding
components.
e) After the approval of Head of project, the list of such items proposed to
be declared obsolete at the corporate level would be initially circulated
to other sister-projects under the Corporation / Company to ascertain
their requirements
f) Such requests would be accompanied with the time limit for the reply
even 'nil' requirement replies would also be insisted.
g) After the replies are received from the projects, and requirements
indicated by them are deducted from the proposed obsolete lists, the
same would be forwarded to Head Office for declaring the same as
obsolete at corporate level. The decision whether equipments / stores /
spares are obsolete to the Corporation / Company will be examined
suitably and approval by competent authority as per extant DoP shall be
taken.

h) The projects will send the list of obsolete equipments, stores, and
spares under the above categories to the Head (MM Department) at
corporate office every year.

The details of equipments declared obsolete should be given as per

proforma at Annexure 11-I (P-270).
i) In case of equipment under category 11.1.1(a) there will not be any
further survey committee for the equipments covered under capital
replacement programme and approved by the competent authority. Only
the details in proforma (Annexure 11-I) need be sent.
j) In the case of equipments under category 11.1.1(b) and spares/stores
under (c) to (e) the lists will be supported by the Project Survey
Committee recommendations duly approved by the Head of the Project.
The project Survey Committee shall consist of HoDs of the concerned
Technical, Finance, Materials and M&S departments.
k) The list of obsolete stores/spares should be prepared under the groups
concerned and should indicate part number, code number, description,
quantity declared obsolete and value, along with last receipt and last
issue date with reasons for declaring obsolete.
l) From the equipment returned/to be returned to stores, removal of parts /
assembly shall not be normally allowed. In case where this becomes
necessary, prior approval of functional Director at Corporate office will
have to be obtained by the project.

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m) While forwarding recommendations to Head Office for obsolete
equipment, specific mention must be made in proforma Annexure 11-I,
as to whether the equipment initially acquired from grants for R & D
items and Labour Welfare Cess Fund. In these two cases, R&D
Department / Project should also obtain prior approval from the
concerned authorities for declaring the equipment as obsolete and their
subsequent disposal.

n) After an equipment is surveyed and recommended for replacement, no

major repairs to prolong its life may be taken without specific consent of
Head of Project. All procurement of spares, if any, for such equipment
beyond this date should be only with respect to the period of anticipated
use of equipment.

11.3 OBSOLETE DISPOSAL

a) The project will initiate disposal action as and when necessary.

b) Adequate care shall be taken for the proper upkeep of the vehicles/
equipments for maintaining the same in working condition till actual
disposal.

For disposal of Burnt oil and lead acid batteries, the statutory guidelines
issued by Govt from time to time are to be followed before disposal.

c) If approval is beyond the power of projects, suitable approval from

Competent Authority for disposal action at project shall also to be taken.

d) After receipt of approval of Competent Authority as per extant DOP for

the disposal, Projects / units / RO will be authorized to conduct all
aspects of disposal through e-auction. MM Corporate office will co-
ordinate for any guidance regarding disposal, if required.
e) Modes of Disposal: Disposal shall be done through e-auction only.

f) RESERVE PRICE

For spares and stores, the book value may be considered as reserve
price. There may be some items like cables with copper conductor
where market rate may be higher than book value because of increasing
prices of copper. In cases of such items book value should be suitably
escalated for purposes of reserve prices. Hence when such items are
included in disposal, the Head of the Project may constitute a committee
to decide the suitability or otherwise of treating book value as a reserve
price and make necessary adjustments on either side.
g) e-AUCTION FOR DISPOSAL

i) Corporate office shall enter into Rate Contract with service provider
to conduct the e-Auction for disposal of scrap, used / old /
unserviceable equipment and obsolete spares.

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ii) Project /unit will conduct the e- Auction directly against Rate Contract for
disposal scrap, old /used / unserviceable equipment & obsolete spares
accumulated at their respective projects.

iii) The list of scrap material, old /used/ unserviceable equipments and obsolete
spares being offered for disposal would be forwarded to service provider at
least 20 to 30 days in advance enabling them to give wide publicity to the
prospective bidders. While forwarding such list, the project/ unit will ensure
taxes applicable on such items are incorporated in the Auction catalogue so
that prospective bidders know the financial implications on such sales.

iv) The clauses such as Pre-bid EMD if any, Security deposit, start bid,
Increment, Inspection dates, Payment period, LD, lifting period, Ground rent
etc. will be finalized by Project / unit.

v) In consultation with service provides, Projects/unit will finalize suitable date for
conduct of e- Auction.

vi) After finalization of Auction catalogue, Projects / unit shall ensure that there
are no changes to Auction catalogue in respect of change of quantities and
adding the new lots to the extent possible. In case of any change, Projects
should take prior approval from C/A at project/unit with proper justification.

vii) As per terms & conditions of Auction catalogue finalized by project/unit,

prospective bidders will make the pre-bid EMD if any and get the access from
the service provider to participate in the e- Auction.

viii) The auction will be supervised by a committee constituted by head of the

project, generally consisting of Head of Finance Department, Head of
Materials Department & Head of M&S department.

If felt necessary by project, one representative from MM Department of Head

office would be nominated to this committee. Head of project/unit would also
nominate a leader of the auction committee. Decision for acceptance or
rejection of the final bid shall be taken by committee.

ix) Depending upon the bulk quantity of lots especially in case of M.S. Scrap, Mn
Steel lines Scrap, HEM Scrap, Conveyor belts etc. the Bidders may be asked
to make the payment /lift the material in 2-4 installments.

x) After completion of the e- Auction, Service provider will give the bid sheet to
the auction supervising committee.

xi) After checking with Reserve price of lots, Auction Supervising Committee will
give the decision on the lots. Accordingly, service provider will issue sale
intimation letters to successful bidders and also return the pre-bid EMD to the
unsuccessful bidders.

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xii) After receipt of security deposit at projects from the successful bidders
against sale intimation letters, Service provider will issue sale orders.
Successful bidders will make the balance payment at Projects/units
against sale orders and lift the material against Delivery order issued by
MM Department.

h) PREPARATORY WORKS THAT ARE REQUIRED TO BE TAKEN FOR

E-AUCTION

i) Constitution of survey/ reserve price fixing committee: The Committee

for survey of lots & fixing the reserve price will be constituted by Head of
project /unit, generally consists of Head of M&S, Head of Materials,
Head of Finance, and Head of concerned departments.
ii) Finalization of list of lots with recommendations of survey committee
offered for sale and displaying the lot numbers at respective location of
the scrap, used / old / unserviceable equipment, and obsolete spares.
These recommendations are to be approved by project/ unit head.
iii) Avoiding the mixing of incoming material from the sites by making
separate lots for fresh material which will not be part of Auction.
iv) Obtaining tax structure applicable for lots put up for disposal.
v) Fixing the Pre-bid EMD/ Security deposit depends upon the nature of
scrap, and value of scrap especially in case of MS Scrap, MN Steel
Scrap, Conveyor Belt, HEM Scrap etc. in order to avoid defaulters.
In case of low value items / items not having any demand such as
electronic waste, wooden scrap, Rubber cut pieces, Misc. Items etc.,
pre-bid EMD may be relaxed.
vi) Fixing the Start bid (Floor price)/ increment.
vii) Fixing the Reserve price: The committee will meet two/three working
days before the actual auction and physically see the various lots being
offered for sale against different lot Nos. and thereafter fix the reserve
price keeping in view of various factors such as market value, condition
of item, nature of the item, location of the project, last 3 years bid value
etc.
These reserve prices should be kept confidential, and papers are kept
in a sealed cover after approval of C/A & kept with the leader of the
committee.

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viii) Payment/ Delivery period: Projects/units will give reasonable period for
making the payment and lifting the material.
In case of the huge quantity of lots & high value of the lots, Bidders may be
allowed to make the payment/ lift the material in 2-4 installments.
ix) Extension of time limit for making the payment/ lifting the material without LD/
Ground rent will be under discretion of head of Project/unit on merit of the
case.
x) STA Lots (Subject to approval lots)
In case of high value lots or any other important lots like MS scrap, MN steel
scrap, HEM scrap conveyor Belt scrap etc. if project/unit feels, they may give
clearance on STA basis to the service provider irrespective of highest bid
value & reserve price value. After obtaining the approval from C/A at project/
unit, they will inform the decision to the service provider within 5-10 working
days to inform the highest / successful bidder.

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CHAPTER – 12

ANNEXURES
Chapter – 1
Annexure – 1-I
(Clause No: 1.4)
DISTRIBUTION OF ITEMS FOR PROCUREMENT BETWEEN H.O,PROJECTS/ UNITS AND ROS:

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Chapter – 2
Annexure 2-I
(Clause 2.3.11)

PUBLIC PROCUREMENT (PREFERENCE TO MAKE IN INDIA)

(ON LETTER HEAD OF THE FIRM)

SELF CERTIFICATION REGARDING LOCAL CONTENT

We …………………………………………(Name of Firm) hereby certify that the offered

materials are having the LOCAL CONTENT Minimum 50% and hence we comes under
Class I Local Supplier as per definition of Make in India policy of Govt of India.

The address of Manufacturing Unit:

------------------------------------------
------------------------------------------

We also understand that the false declarations will be in breach of the Code of Integrity under
Rule 175(1)(i)(h) of the General Financial Rules for which a bidder or its successors can be
debarred for up to two years as per Rule 151 (iii) of the General Financial Rules along with
such other actions as may be permissible under law.

(Sign & Seal)

(OR)

We …………………………………………(Name of Firm) hereby certify that the offered

materials are having the LOCAL CONTENT Minimum 20% and hence comes under Class II
Local Supplier as per definition of Make in India policy of Govt of India.

The address of Manufacturing Unit:

------------------------------------------
------------------------------------------

We also understand that the false declarations will be in breach of the Code of Integrity under
Rule 175(1)(i)(h) of the General Financial Rules for which a bidder or its successors can be
debarred for up to two years as per Rule 151 (iii) of the General Financial Rules along with
such other actions as may be permissible under law.

(Sign & Seal)

NOTE:
1) Self declaration has to be submitted in the Company Letter head by the bidder
1) Class I Local supplier only shall get purchase preference as per Make in India Policy

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LOCAL CONTENT CERTIFICATE > 10 CRORE VALUE

The ‘Class-I Local Supplier / Class-II Local Supplier’ shall be required to provide a
certificate from the statutory auditor or cost auditor of the company (in case of
companies) or from a practicing cost account (in respect of suppliers other than
companies) giving percentage (%) of local content.

(submit/ upload the certificate with technical bid of offer)

CERTIFICATION REGARDING LOCAL CONTENT

We …………………………………………(Name of Firm) hereby certify that the offered

materials are having the LOCAL CONTENT Minimum 50 % (or) Minimum 20 % hence we
comes under Class-I (or) Class-II Local Supplier as per definition of Make in India policy of
Govt of India.

The address of Manufacturing Unit:

------------------------------------------
------------------------------------------

We also understand that the false declarations will be in breach of the Code of Integrity under
Rule 175(1)(i)(h) of the General Financial Rules for which a bidder or its successors can be
debarred for up to two years as per Rule 151 (iii) of the General Financial Rules along with
such other actions as may be permissible under law.

(Statutory Auditor or Cost Auditor)

(Sign & Seal)

NOTE:
1) Bidder should tick appropriate option (√ or X) above.
2) Declaration has to be submitted in the Company Letter head by the bidder
3) Class I Local supplier only shall get purchase preference as per Make in
India Policy

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Chapter-2
Annexure- 2-II
(Clause 2.3.15)
Guidelines for Evaluation of Concurrent Application of the MSE and MII Preferences

1) The concurrent application of the two procurement orders i.e., MSE Procurement Order of 2012
and PPP-MII Order may create confusion to the procuring entities on how to evaluate the bidders
falling within the purview of both policies. To bring predictability both to the procuring entities as
well as bidders, DoE issued guidelines. These guidelines are explained below. Examples to
illustrate the application of these guidelines are given in the Annex to this Annexure.

2) The Class-I local suppliers, under PPP-Mll Order, participating in any government tender may or
may not be MSEs, as defined under the MSME Act. Similarly, MSEs participating in any
government tender, may or may not be Class-I local suppliers. Suppliers may be categorised into
the following four broad categories for consideration or applicability of purchase preference:
Category: If Supplier is: Terminology: Supplier Acronym for this Para
both MSE & Class-I local supplier "MSE Class-I local" M-C1
MSE but not Class-I local supplier "MSE but non-Class-l local" M-NC1
not MSE but is a Class-I local supplier "Non-MSE but Class-I local" NM-C1
Supplier is neither MSE nor Class-I local "Non-MSE non-Class-l local" NM-NC1

3) The applicability of PPP-MSE Order and PPP-Mll Order in various scenarios, involving
simultaneous purchase preference to MSEs and Class-I local suppliers under PPP-MSE Order
and PPP-Mll Order respectively, shall be as under:

a) Scenario-1: Items covered under Para 3(a) of PPP- Mll Order, 2017 for which Nodal Ministry
has notified sufficient local capacity and competition [(para 1.11.3-2-a) of this manual)]: For
these items, only Class-I local suppliers are eligible to bid, irrespective of purchase value.
Hence, Class-Il local suppliers or Non-local suppliers, including MSEs, which are Class-Il
local suppliers/ Non-local suppliers, are not eligible to bid. Possible scenarios can be as
follows:
i) L-1 is an "MSE Class-I local supplier" - 100% of the tendered quantity is to be awarded
to L-1.
ii) L-1 is "Non-MSE but Class-I local supplier" - Purchase preference is given to ‘MSEs
Class-I local supplier’ (if any and eligible - 25% quantity,) as per PPP-MSE Order.
Balance quantity is to be awarded to the L-1 bidder.
b) Scenario 2: Items reserved exclusively for procurement from MSEs as per PPP-MSE Order:
These items are reserved exclusively for purchase from MSEs. Hence, non-MSEs are not
eligible to bid for these items. Possible scenarios can be as follows:
i) L-1 is an "MSE Class-I local supplier" - 100% of the tendered quantity is to be awarded
to L-1
ii) L-1 is "MSE non-Class-l local supplier" - Purchase preference (50% quantity) is to be
given to “MSE Class-I local supplier” if any and eligible, as per PPP-Mll Order. Balance
quantity is to be awarded to L-1 bidder.
c) If items are neither notified for sufficient local capacity nor reserved for MSEs, then the
process will be as follows:
i) Scenario 3: Items covered under para 1.11.3-3) b) of this manual are divisible items,
and both MSEs, as well as Class-I local suppliers, are eligible for purchase preference.
Possible scenarios can be as follows:
1) L-1 is "MSE Class-I local supplier" - 100% of the tendered quantity is to be
awarded to L-1.

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2) L-1 is "Non-MSE but Class-I local supplier" - Purchase preference (25% quantity)
is to be given to “MSEs, if eligible, as per PPP-MSE Order. Balance quantity is to
be awarded to L-1 bidder.

3) L-1 is "MSE but non-Class-l local supplier" - Purchase preference (50% quantity) is
to be given to “Class-I local suppliers, if eligible, as per PPP-Mll Order. Balance
quantity is to be awarded to L-1 bidder.

4) L-1 is "Non-MSE non-Class-l local supplier" – Firstly, purchase preference (25%

quantity) is to be given to MSEs (if any and eligible) as per PPP-MSE Order.
Thereafter, purchase preference is to be given to Class-I local suppliers for "50%
of the tendered quantity minus quantity allotted to MSEs above" (i.e., 37.5%) if any
and eligible as per PPP- Mll Order. If there is an eligible ‘MSE Class-I local
supplier’, then he should be firstly given purchase preference of 25% as MSE, if
eligible as per PP-MSE order, and a further purchase preference for "50% of the
tendered quantity minus quantity allotted as MSE" (i.e. 37.5%) if eligible as per
PPP- Mll Order – therefore a total of 62.5% quantity. For the balance quantity,
contract is to be awarded to L-1 bidder.

ii) Scenario 4: Items covered under para 1.11.3-3) b)iii) of this manual are non-divisible
items, and both MSEs and Class-I local suppliers are eligible for purchase
preference.
Possible scenarios can be as follows:
1) L-1 is an "MSE Class-I local supplier" - A contract is awarded to L-1.
2) L-1 is not "MSE Class-I local supplier" but the "MSE Class-I local supplier" falls
within 15% margin of purchase preference Purchase preference is to be given to
lowest quoting "MSE Class-I local supplier". If the lowest quoting "MSE Class-I
local supplier" does not accept the L-1 rates, the next higher "MSE Class-I local
supplier" falling within 15% margin of purchase preference is to be given purchase
preference and so on.
3) If conditions mentioned in sub-paras (1) and (2) above are not met, i.e., L-1 is
neither "MSE Class-I local supplier" nor "MSE Class-I local supplier" is eligible to
take benefit of purchase preference, the contract is to be awarded/ purchase
preference to be given in different possible scenarios as under:
a) L-1 is "MSE but non-Class-l local supplier" or "Non-MSE but Class-I local
supplier" — Contract is to be awarded to L-1.
b) L-1 is "Non-MSE non-Class-l local supplier" - First purchase preference to be
given to MSE (class-I local supplier or non-class-I local supplier), if eligible as
per PPP-MSE Order. If MSE is not eligible/ does not accept - purchase
preference to be given to Class- I Local supplier if eligible as per PPP-Mll
Order. If Class-I Local supplier also not eligible/ does not accept — contract to
be awarded to L-1.
d) Scenario 5: Items reserved for both MSEs and Class-I local suppliers: These items are
reserved exclusively for purchase from MSEs as well as Class-I local suppliers. Hence, only
"MSE Class-I local supplier" are eligible to bid for these items. Non-MSEs/ CIass-II local
suppliers/ Non-local suppliers cannot bid for these items. Hence the question of purchase
preference does not arise.

e) Scenario 6: Non-local suppliers, including MSEs falling in the category of Non-local

suppliers, shall be eligible to bid only against Global Tender Enquiry.

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EXAMPLES OF EVALUATION OF CONCURRENT APPLICATION OF THE MSE AND MII PREFERENCES

Given below are the examples to explain the different scenarios that may arise during the concurrent
evaluation of MSE and Class-I local suppliers. The scenarios are further divided into the various sub
scenarios considered as ‘Distribution (D)’ to provide clarity on the quantity distribution, which shall take
place among the MSE and Class-I local suppliers. Please note the following acronyms, in table in para
2 of Annexure 34 above.
1. Example explaining applicability in scenario explained in Scenario 3 (Divisible items, both MSEs
as well as Class-I local suppliers eligible for purchase preference.) Item — Desktop computer,
Qty — 100 Nos.

i) L-1 is ‘Non-MSE but Class-I Local Supplier’ (NM-C1) [Scenario 3 -2) in Annexure 34] Details of
bids received:

Rates Status of D-1 D-2 D-3 D-4

S.N Bidder quoted Rank bidder
(INR)
1. A 100 L1 NM-C1 74 (L1) 75 (L1) 75 (L1) 100 (L1)
2. B 110 L2 M-NC1 Accepts Accepts Does not Does not
13 (MSE) 25 (MSE) accept accept
3. C 112 L3 NM-NC1 Not Eligible Not Not Eligible Not Eligible
Eligible
4. D 115 L4 M-NC1 Accepts Does not Accepts Does not
13 (MSE) accept 25 (MSE) accept
5. E 118 L5 NM-C1 Not Eligible Not Not Eligible Not Eligible
Eligible
6. F 120 L6 MC1 Not Eligible Not Not Eligible Not Eligible
Eligible

a) First purchase preference is to be given to MSEs as per PPP-MSE Order.

b) MSE bidders to be invited for placement of 25% of tendered quantity of 100 Nos. i.e., 25 Nos.
c) Those MSE bidders are to be invited whose quoted rates fall within 15% margin of purchase
preference to match the L1 price.
d) Accordingly, the following distributions may happen:
A. Distribution-1 (D-1)
1) MSE bidders B (L2) and D (L4) are invited to match L1 price i.e., INR 100/-
2) Both bidders B and D agree to match the L1 price.
3) The quantity of 25 nos. is distributed equally among bidders B and D i.e., 25/2=12.5
nos. (say 13 nos.)
4) Bidders B and D are awarded the quantity of 13 nos. of computers each (i.e., a total
of 26 nos. of computers placed on MSE bidders)
5) The remaining quantity of 74 nos. of computers [100-26] is placed on the L1 bidder.
B. Distribution-2 (D-2)/ Distribution-3 (D-3)
1) Either bidder B or bidder D agrees to match the L1 price.
2) 25 nos. quantity (25% of 100 nos.) is placed on the bidder (B or D).
3) The balance quantity of 75 nos. computers (100-25) is placed on the L1 bidder.
C. Distribution-4 (D-4)
1) None of the MSE bidders agree to match the L1 price. No MSE preference given.
2) The entire quantity of 100 nos. computers is placed on the L1 bidder, i.e., Bidder “A”,
being a Class I bidder.
ii) L-1 is “MSE but non-Class-I Local Supplier (M-NC1) [Scenario 3 -3). Details of bids
received:

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Rates Status of D-1 D-2 D-3 D-4
S.N Bidder quoted Rank bidder
(INR)
1. A 100 L1 M-NC1 50 (L1) 50 (L1) 50 (L1) 100 (L1)
2. B 110 L2 NM-NC1 Not Eligible Not Not Eligible Not Eligible
Eligible
3. C 112 L3 NM-C1 Accepts Does not Does not Does not
50 (MII) accept accept accept
4. D 115 L4 M-NC1 Not Eligible Not Not Eligible Not Eligible
Eligible
5. E 118 L5 NM-C1 Not Eligible Accepts Does not Does not
50 (MII) accept accept
6. F 120 L6 MC1 Not Eligible Not Accepts Does not
Eligible 50 (MII) accept
a) First purchase preference is to be given to Class-I local supplier as per PPP-MII Order, for
placement of 50% of tendered quantity of 100 Nos. i.e., 50 Nos.
b) The Class-I local supplier is to be invited whose quoted rates falls within 20% margin of
purchase preference, to match the L1 price.
c) Accordingly, the following distributions may happen:

A. Distribution-1 (D-1)
1) Class-I bidder C (L3) is invited to match L1 price i.e., INR 100/-.
2) Bidders C agrees to match the L1 price.
3) Bidder C is awarded the quantity of 50 nos.
4) The balance quantity of 50 nos. of computers [100-50] is placed on the L1 bidder.
B. Distribution-2 (D-2)/ Distribution-3 (D-3)
1) If bidder C does not agree to match the L1 price, then the next Class-I bidder, i.e.,
Bidder E, is invited to match the L1 price.
2) Bidder E agrees to match the L1 price, and the 50 nos. quantity is awarded on Bidder
E.
3) The balance quantity of 50 nos. computers (100-50) is placed on the L1 bidder ‘A’.
4) In case Bidder E does not agree to match the L1 price, the next Class-I bidder is
invited, which is Bidder ‘F’.
5) Bidder F agrees to match the L1 price, then the 50 nos. of quantity are
awarded to Bidder F, while the balance quantity of 50 nos. computers is placed on the
L1 bidder ‘A’.
C. Distribution-4 (D-4)
1) None of the Class-I local suppliers agree to match the L1 price. No MII preference
given.
2) The entire quantity of 100 nos. computers is placed on the L1 bidder, i.e., Bidder ‘A’.

iii) L-1 is "Non-MSE non-Class-l local supplier" (NM-NC1) [Scenario 3 -4) . Details of bids
received:
Rates Bidder D-1 D-2 D-3 D-4 D-5 D-6 D-7
S.N Bidder quoted Rank Status
(INR)
1. A 100 L1 NM-NC1 37 (L1) 37 (L1) 37 (L1) 37 (L1) 37 (L1) 50 (L1) 75 (L1)
Accept Accepts Does not Does not Does not Accepts Does
2. B 110 L2 NM-C1 s 37 38 (MII) accept accept accept 50 (MII) not
(MII) accept
Accept Accepts Does not Accepts Accepts Does Accept
L3 s 25 (MSE) accept 13 (MSE) 25 (MSE) not s
3. C 112 M-NC1
13 accept 25
(MSE) (MSE)

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Rates Bidder D-1 D-2 D-3 D-4 D-5 D-6 D-7
S.# Bidder quoted Rank Status
(INR)
Accept Does not Accepts Accepts Does not Does Does
D L4 s accept 25 (MSE) 13 (MSE) + accept not not
4. 115 MC1
13 + 38 (MII) 37 (MII) accept accept
(MSE)
Not Not Not Not Does not Not Does
5. E 118 L5 NM-C1 Eligible Eligible Eligible Eligible accept Eligible not
accept
Not Not Not Not Accepts Not Does
6. F 120 L6 MC1 Eligible Eligible Eligible Eligible 38 (MII) Eligible not
accept
7 G 120 L7 M-NC1 Not Not Not Not Not Not Not
Eligible Eligible Eligible Eligible Eligible Eligible Eligible
a) The first purchase preference is to be given to MSEs as per the PPP-MSE Order.
b) MSE bidders having their quoted rates within 15% margin of purchase preference to be invited for
placement of 25% of tendered quantity, subject to matching the L1 price.
c) The next purchase preference is to be given to Class-I local supplier as per PPP-MII Order, whose
quoted rates falls within 20% margin of purchase preference, to match the L1 price.
d) Post these purchase preferences, the balance quantity is placed on the L1 bidder who is Non
MSE non-Class-I local supplier.
e) Accordingly, the following distributions may happen:

A) Distribution-1 (D-1)
1) MSE bidders C and D are invited to match L1 price i.e., INR 100/-. Bidder F and G, being the
MSE bidders are not invited since their quoted prices falls beyond the margin of preference of
15%.
2) Both bidders C and D agree to match the L1 price.
3) The quantity of 25 nos. is distributed equally among bidders B and D i.e., 25/2=12.5 nos. (say
13 nos.)
4) Bidders C and D are awarded the quantity of 13 nos. of computers each (i.e., a total of 26 nos.
of computers placed on MSE bidders)
5) The balance quantity remaining is 74 nos. (100-26). Next, purchase preference shall be given
as per MII Order for the placement of 50% of the balance quantity, i.e., for 37 nos. of
computers (50% of 74).
6) Bidder B, being a Class-I local supplier, is invited to match the L1 price, since its quoted rate
falls within margin of purchase preference of 20%.
7) Bidder B agrees to match the L1 price. The quantity of 37 nos. of computers is awarded to
bidder ‘B’.
8) The balance quantity of 37 nos. of computers [100-26-37] is placed on the L1 bidder
‘A’.
B) Distribution-2 (D-2)
1) MSE bidders C and D are invited to match L1 price, i.e., INR 100/-.
2) MSE bidders C agrees to match the L1 price, but MSE bidder D does not agree to match the
L1 price.
3) The quantity of 25 nos. (25% of 100 nos.) is placed on the MSE bidder C.
4) The balance quantity remaining is 75 nos. (100-25). Next, purchase preference shall be given
as per the MII Order for the placement of 50% of the balance quantity, i.e., for 37.5 or, say, 38
nos. of computers.
5) Bidder B, being the Class-I local supplier, is invited to match the L1 price, since its quoted rate
falls within margin of purchase preference of 20%.

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6) Bidder B agrees to match the L1 price. The quantity of 38 nos. of computers is
awarded to bidder ‘B’.
7) The balance quantity of 37 nos. of computers [100-25-38], is placed on the L1 bidder
‘A’.
C) Distribution-3 (D-3)
1) MSE bidders C and D are invited to match L1 price, i.e., INR 100/-.
2) MSE bidder C does not agree to match the L1 price, but MSE bidder D agrees.
3) The quantity of 25 nos. (25% of 100 nos.) is placed on the MSE bidder D.
4) The balance quantity remaining is 75 nos. (100-25). Next, purchase preference shall be
given as per MII Order for the placement of 50% of the balance quantity, i.e., for 37.5 or
say, 38 nos. of computers.
5) Bidder B, being the Class-I local supplier, is invited to match the L1 price since its
quoted rate falls within the margin of purchase preference of 20%.
6) Bidder B does not agree to match the L1 price. Hence, the next Class-I local supplier,
bidder ‘D’ is invited to match the L1 price. Bidder D agrees and the quantity of 38 nos.
of computers is awarded to bidder ‘D’.
7) The balance quantity of 37 nos. of computers [100-25-38], is placed on the L1 bidder
‘A’.
D) Distribution-4 (D-4)
1) MSE bidders C and D are invited to match L1 price, i.e., INR 100/-.
2) MSE bidders C and D agree to match the L1 price. The quantity of 25 nos. is distributed
equally among bidders B and D i.e., 25/2=12.5 nos. (say 13 nos.) each.
3) The balance quantity remaining is 74 nos. (100-26). Next, purchase preference shall be
given as per MII Order for the placement of 50% of the balance quantity, i.e., for 37
nos. of computers.
4) Bidder B, being the Class-I local supplier is invited to match the L1 price, since its
quoted rate falls within margin of purchase preference of 20%.
5) Bidder B does not agree to match the L1 price. Hence, the next Class-I local supplier,
bidder ‘D’ is invited to match the L1 price. Bidder D agrees and the quantity of 37 nos.
of computers is awarded to bidder ‘D’.
6) The balance quantity of 37 nos. of computers [100-26-37], is placed on the L1 bidder
‘A’.
E) Distribution-5 (D-5)
1) MSE bidders C and D are invited to match L1 price, i.e., INR 100/-.
2) MSE bidders C agrees to match the L1 price, however, bidder D does not agree.
Hence, the 25% of 100 nos. of computers i.e., 25 nos. are awarded to MSE bidder C.
3) The balance quantity remaining is 75 nos. (100-25). Next, purchase preference shall be
given as per MII Order for the placement of 50% of the balance quantity, i.e., for 37.5,
say 38 nos. of computers.
4) Bidder B, being the Class-I local supplier is invited to match the L1 price, since its
quoted rate falls within margin of purchase preference of 20%.
5) Bidder B does not agree to match the L1 price. Hence, the next Class-I local supplier,
bidder ‘D’ is invited to match the L1 price. Bidder D also does not agree to match the L1
price. The next class-I local supplier ‘E’ is invited that does not agree either. The next
class-I local supplier ‘F’ is invited (who happens to be a MSE bidder as well, however,
since the quoted price of bidder ‘F’ in case of MSE preference was beyond 15% margin
of preference, hence it was not invited to match the L1 price while going for MSE
preference). For MII preference, the price quoted is within the margin of 20%. The
bidder ‘F’ agrees to match the L1 price. The quantity of 38 nos. of computers is placed
on bidder ’F’.
6) The balance quantity of 37 nos. of computers [100-25-38] is placed on the L1 bidder
‘A’.

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F) Distribution-6 (D-6)
1) MSE bidders C and D are invited to match L1 price, i.e., INR 100/-.
2) Neither of the MSE bidders (C and D) agrees to match the L1 price. Hence, no
MSE purchase preference is given.
3) The next purchase preference is given to Class-I local supplier as per the MII Order
for the 50% of the tendered quantity i.e., for 50 nos. of computers. Bidder ‘B’ being
the lowest quoting Class-I local supplier with its quoted price falling within the
margin of purchase preference of 20% is invited to match the L1 price.
4) Bidder ‘B’ agrees to match the L1 price. The quantity of 50 nos. of computers is
awarded on bidder ‘B’.
5) The balance quantity of 50 nos. of computers [100-50] is placed on the L1 bidder
‘A’.
G) Distribution-7 (D-7)
1) MSE bidders C and D are invited to match L1 price, i.e., INR 100/-.
2) MSE bidder ‘C’ agrees to match the L1 price only. Hence, 25% of the total tendered
quantity i.e., 25 nos. of computers are awarded on the MSE bidder ‘C’.
3) The next purchase preference is to be given to Class-I local supplier as per the MII
Order for the 50% of the balance quantity of 75 nos. i.e., for 37.5 or say 38 nos. of
computers. First Class-I bidder invited is bidder ‘B’ to match the L1 price. Bidder ‘B’
does not agree to match the price. Subsequently, bidders ‘D,’ ‘E’ and ‘F’ are invited
one by one, after each of the bidder does not agree to match the L1 price.
4) None of the Class-I local suppliers agree to match the L1 price. Hence, no
purchase preference under MII order is given.
5) The balance quantity obtained, after the placement of 25 nos. quantity of
computers on MSE bidders, is placed on bidder ‘A’ the L1 bidder for 75 nos.
computers.
2. Example explaining applicability to Scenario 4 (Non-Divisible items, both MSEs as well
as Class-I local suppliers eligible for purchase preference.). Item — Software License, Unit
— 100 Nos.

i). L-1 is “Non-MSE but Class-I Local Supplier” [Scenario 4-2]. Details of bids
received:
Sr. No. Name Rates Price Status of bidder
bidder quoted Ranking
1. A 100 L1 “Non-MSE but Class-I local supplier"
2. B 110 L2 "MSE but non-Class-I local supplier"
3. C 112 L3 "MSE Class-I local supplier"
4. D 115 L4 "MSE Class-I local supplier"
5. E 118 L5 "Non MSE non-Class-I local supplier"
6. F 120 L6 "MSE Class-I local supplier"

a) Here, purchase preference is to be given to the lowest quoting ‘MSE Class-I local
supplier,’ provided its rate falls within the purchase preference of 15%.
b) Bidder ‘C’ is MSE Class-I local supplier with price within the 15% margin of
preference. Bidder C is invited to match the price of L1. If agreed, the entire order
(100 nos. of software licenses) is to be placed on Bidder C.
c) If the lowest quoting ‘MSE Class-I local supplier’ (Bidder ‘C’) does not agree to
match the L1 price, the next higher ‘MSE Class-I local supplier’, i.e., bidder ‘D’, is
invited to match the L1 price. If agreed, the entire order is to be placed on bidder
‘D.’
d) Bidder ‘F’ though MSE Class-I local supplier, cannot be considered since its price
falls beyond the 15% margin of preference.

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ii). L-1 is “MSE but non-Class-I Local Supplier” [Scenario 4 -1) in Annexure 34]:
The approach explained in example 2. (i) above to be followed

iii). L-1 is neither “MSE Class-I Local Supplier” nor any other “MSE Class-I Local
Supplier” is eligible [Scenario 4 -3) , then:
1) L-1 is ‘MSE but non-Class-I local supplier’: Entire quantity [100 nos. of
software license] is to be placed on the L-1; or
2) L-1 is ‘Non-MSE but Class-I local supplier’: Entire quantity [100 nos. of
software license] to be placed on the L-1.

iv). L-1 is “Non-MSE non-Class-I Local Supplier”. Details of bids received:

Sr. No. Name of Rates quoted Price Status of bidder

bidder Ranking
1. A 100 L1 “Non-MSE non-Class-I local supplier"

2. B 110 L2 "MSE but non-Class-I local supplier"

3. C 112 L3 "Non MSE but Class-I local supplier"

4. D 115 L4 "MSE but non-Class-I local supplier"

5. E 118 L5 "Non MSE but Class-I local supplier "

6. F 120 L6 “MSE but non-Class-I local supplier”

7. G 125 L7 "MSE Class-I local supplier"

1) First, MSE preference shall be exercised. Hence, lowest quoting MSE but non-Class-I local
supplier is invited to match the price of L-1. Bidder ‘B’ has quoted the price that falls within
the purchase preference of 15%. If Bidder ‘B’ agrees, the entire order is to be placed on
bidder ‘B.’
2) If bidder ‘B’ does not agree, bidder ‘D’ shall be invited (price falling within the purchase
preference of 15%), to match the L-1 price. If agreed, entire order to be placed on bidder
‘D.’
3) If bidder ‘D’ also does not agree, now, purchase preference to Class-I local supplier shall be
provided. Bidder ‘F’ cannot be considered since the quoted price is beyond the margin of
preference of 15%.
4) Bidder ‘C’ is invited to match the L-1 price [quoted price within the purchase preference of
20%, as per the PPP-MII Order]. If bidder ‘C’ agrees, the entire order is to be placed on ‘C.’
5) If bidder ‘C’ does not agree, bidder ‘E’ to be invited, as the quoted price is within the
purchase preference of 20%. If bidder ‘E’ agrees, the entire order is to be placed on bidder
‘E.’

If the non-MSE but Class-I local supplier, bidder ‘E’, also does not agree to match the L-1 price,
then the entire order is to be placed on the L-1, i.e., bidder ‘A’.

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 Materials Management Manual, 2024
Chapter -3
Annexure 3 – I
(Clause 3.4)

MATERIAL GROUP CODES AS PER SAP (ERP) SYSTEM

Equipment Group Material Group Description

ENGINE M000001 HEM-Cummins ENG SPRS
ENGINE M000002 HEM-CATRPLR ENG SPRS
ENGINE M000003 HEM-KOMATSU ENG SPRS
ENGINE M000004 HEM - BEML Eng Sprs
ENGINE M000005 HEM-LEYL& ENG SPRS
ENGINE M000006 HEM-OTHR HEMM ENG SP
DOZER M000051 DOZER - BEML - BD355
DOZER M000052 DOZER - BEML - D155
DOZER M000053 DOZER - CAT D11T
DOZER M000054 WHEL DZR KMTSU WD600
DOZER M000055 CAT LOADER SPARES
GRADER M000075 GRADER - BEML SPARES
GRADER M000076 GRADER-CATRPLR
DRILL M000100 DRL-ATLSCPCO-DMHDSP
DRILL M000101 DRL-ATLSCAPCOIDM-70E
DRILL M000102 DRILL - IDM SPARES
DRILL M000103 DRL-ATLASCAPCO-IBH10
DRILL M000104 DRL-ATLASCAPCOROCF9
DRILL M000105 DRL-REVATHI DRL SPRS
DRILL M000106 DRL - CRAWLER DRL
DRILL M000107 DRL-S&VIKDRLSPRS
DRILL M000108 ROCK BREAKER SPARES
DRILL M000109 DRILL-POWER ROC D40
DUMPER M000150 DUMPER - BEML SPARES
DUMPER M000160 DUMPER-CATRPLRSPRS
DUMPER M000175 DUMPER-KOMATSU HD785
EXCAVATOR M000200 EXCVTR - BEML - 182M
EXCAVATOR M000201 EXCVTR-BEMLBE-1000
EXCAVATOR M000202 EXCVTR-DSN.S150LC-7B
EXCAVATOR M000203 EXCVTR-HI EX1900-5/6
EXCAVATOR M000204 EXCVTR-BH HUYD-R340L
EXCAVATOR M000205 EXCVTR-TAIYUAN-WK10B

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EXCAVATOR M000207 EXCVTR-TATA HI-450

EXCAVATOR M000208 EXCVTR - L&T - CK300
EXCAVATOR M000209 EXCVTR-TEREX-RH90C
EXCAVATOR M000210 EXCAV-HITACHI EX1200
EXCAVATOR M000211 EXTR-HITACHI EX200LC
LOADER M000250 LOADER - CAT 992K
LOADER M000251 LODR - KAWASAKI SPRS
LOADER M000252 LODR-SKDSL BCAT S250
LOADER M000253 LODR-TATA315VBACKHOE
LOADER M000255 LODR - GAMZEN – 8080
LOADER M000256 LOADER - CAT 980H
LOADER M000257 LODRKOMTSUWA-800-3EO
WATER SPRINKLER M000300 WATRSPRKL-BEMLWS28-2
TYRE HANDLER M000302 TYRE H&LER -
TRAILER M000303 TRAILER-HIPPO/BEAVER
TRANSMISSION SPARES M000304 TRANSMISSION SPARES
BRAKE SPARES M000305 DUMPER - BRAKES Sprs
DRILL ACCESSORIES M000306 MININGDRLACCESSORIES
DRILL BITS M000307 DRILL BITS
AFPS M000308 AUTO FIRE PRTCN SYS
LOCOMOTIVE M000309 LOCOMOTIVE
HEMM GEN M000310 HEMM-GENERAL SPARES
HEMM GEN M000311 COMPRESSOR – ELGI
HEMM GEN M000312 HEM-AC SPRS
HEMM GEN M000313 COMPR-PRTBLAIRCOMPRS
CRANE M000350 CRANE - ACE SPARES
CRANE M000351 CRANE-TIL CRANE SPRS
CRANE M000352 CRANE - ESCORTS Sprs
CRANE M000353 CRANE-TIL-HYDRA 830M
CRANE M000354 CRANE -GENERAL Sprs
AUTOSHOP EQUP M000400 JEEP - MAHINDRA Sprs
AUTOSHOP EQUP M000401 JEEP- TATA SPARES
AUTOSHOP EQUP M000402 TATA-HEAVY VEHICLE
AUTOSHOP EQUP M000403 BUS - ASHOK LEYL&
AUTOSHOP EQUP M000404 LMV SPARES
AUTOSHOP EQUP M000405 HMV SPARES
AUTOSHOP EQUP M000406 AMBULANCE SPARES

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AUTOSHOP EQUP M000407 AMBULANCE – TATA

AUTOSHOP EQUP M000409 FUEL BOUSER -
AUTOSHOP EQUP M000412 LUBRICATION VAN -
AUTOSHOP EQUP M000413 WATER TANKER -
AUTOSHOP EQUP M000450 ACCESSPLATFORM-TATA
AUTOSHOP EQUP M000451 AUTOSHOPGENERALSPRS
AUTOSHOP EQUP M000453 CMPCTR ROADROLR SPRS
AUTOSHOP EQUP M000455 AUTO ELECTRICALS
PLANT EQUIPMENTS M000500 APRON FEEDER
PLANT EQUIPMENTS M000501 VIBRATING FEEDER
PLANT EQUIPMENTS M000502 CRUSHERS – GYRATORY
PLANT EQUIPMENTS M000503 CRUSHERS – CONE
PLANT EQUIPMENTS M000505 VIBRATING FEEDERS
PLANT EQUIPMENTS M000506 VIBRATING SCREEN
PLANT EQUIPMENTS M000507 TIPPERS
PLANT EQUIPMENTS M000508 THICKNER
PLANT EQUIPMENTS M000509 STACKER
PLANT EQUIPMENTS M000510 RECLAIMER
PLANT EQUIPMENTS M000511 WAGON LOADER
CONVEYOR SYSTEM M000512 CONVEYOR SYSTEM
CONVEYOR BELTS M000513 CONVEYOR BELTS
LINERS M000514 LINERS
PANNA PLANT EQUP M000515 HEAVYMEDIASEPARATION
PANNA PLANT EQUP M000516 X RAY SORTER
CLASSIFIER M000517 CLASSIFIER
PELLET PLANT M000518 PELET - ROTARY KILN
PELLET PLANT M000519 PELT-ANNULARCOOLEREQ
PELLET PLANT M000520 PELLET - BALL MILL
PELLET PLANT M000521 PELET-COOLINGTOWER
DUSTSUPRESSIONSYSTEM M000522 DUSTSUPRESSIONSYSTEM
GEAR BOX M000523 GEAR BOX
FOH M000524 FINEOREH&LINGSYSTEM
HOIST M000525 HOIST
PUMPS M000527 SLURRY PUMPS
PELLET PLANT M000528 FILTER PRESS-PELET
PLANT SPARES M000529 PLANT GENERAL SPARES
PELLET PLANT M000530 PELLET-INSTRUMEN

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PELLET PLANT M000531 PELLET-UTILITIES

PELLET PLANT M000532 PELLET-PCI EQUIPMENT
PELLET PLANT M000533 PELLET-MIXTURE EQUIP
PELLET PLANT M000534 PELLET-FILET BAGS
PELLET PLANT M000535 PELLET-BALLING DISC
PELLET PLANT M000536 CRC Plant Spares
ELECTRICAL M000600 MOTORS
ELECTRICAL M000601 ELECTRIC REPAIR SHOP
ELECTRICAL M000602 ELECTRONIC ITEMS
ELECTRICAL M000603 EOT CRANES
ELECTRICAL M000604 INSTRUMENTATION
ELECTRICAL M000605 KIOSK
ELECTRICAL M000606 LIGHTING TOWERS
ELECTRICAL M000607 METAL DETECTOR
ELECTRICAL M000608 PANELS
ELECTRICAL M000609 PLC/DCS/DAS
ELECTRICAL M000610 SUB STATION
ELECTRICAL M000611 TELEPHONE EXCHANGE
ELECTRICAL M000612 TRANSFORMERS
ELECTRICAL M000613 UPS SPARES
ELECTRICAL M000614 WEIGHTOMETERS
ELECTRICAL M000615 WIRELESS SYSTEM
ELECTRICAL M000650 INSULATING MATERIALS
ELECTRICAL M000651 INSULATORS
ELECTRICAL M000652 LAMPS & FITTINGS
ELECTRICAL M000653 LIGHTING ARRESTORS
ELECTRICAL M000654 LINE MATERIALS
ELECTRICAL M000655 LOAD CHARGERS
ELECTRICAL M000656 MEASURINGINSTRUMENTS
ELECTRICAL M000657 MTRSTRTRS,SWTC&FUSES
ELECTRICAL M000658 PA SYSTEMS
ELECTRICAL M000660 RESISTORS, RELAYS
ELECTRICAL M000661 SWITCHES
ELECTRICAL M000662 CONDUCTORS
ELECTRICAL M000663 ALTRNTRS & ACCESRIES
ELECTRICAL M000664 AMPLIFIERS
ELECTRICAL M000665 BATRIES & BATRY SPRS

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ELECTRICAL M000666 BATTERY CHARGERS

ELECTRICAL M000667 CABLES
ELECTRICAL M000668 CABLES ACCESSORIES
ELECTRICAL M000669 CARBONBRUSHES&HLDERS
ELECTRICAL M000670 CIRCUIT BRAKERS
ELECTRICAL M000671 CONDENSORS&CAPACITRS
ELECTRICAL M000672 CONDUIT FITTINGS
ELECTRICAL M000673 DG SET SPARES
ELECTRICAL M000674 ELECTMISCLENOUSITEMS
ELECTRICAL M000675 ELECTRICAL COILS
ELECTRICAL M000676 ELECLEQUIPMENTSSPRS
ELECTRICAL M000677 ELECLFITTINGS&SPRS
ELECTRICAL M000678 ELECTRICAL WIRES
ELECTRICAL M000679 ELE APPLIANCES
OTR TYRES M000700 OTR TYRES
TYRES GENERAL M000701 TYRE TUBES FLAP
TYRES GENERAL M000702 TYRE ACCESSORIES
VULCANINSISNG M000703 VULCANISING ITEMS
HOSES M000704 HOSES
V BELTS M000705 V BELTS
HARDWARE M000706 HARDWARE-FASTNERS
HARDWARE M000707 BELT FASTNERS
RAIL M000708 RAILWAY TRACK ITEMS
BEARINGS M000709 BEARINGS
TOOLS M000710 TOOLS- GENERAL
INDL GASES M000711 INDUSTRIAL GASES
ELECTRODES M000712 ELECTRODES
WELDING ITEMS M000713 WELDING ACCESSORIES
WIRE ROPES M000714 WIRE ROPES
SLINGS M000715 SLINGS
CHAIN LINKMESH M000716 CHAIN LINK MESH
COUPLINGS M000717 COUPLINGS
PLBLOCK M000718 PLUMMER BLOCK
WORKSHOP EQP M000719 WORKSHOP EQUIPMENT S
CIVIL / CONSTRUCTION M000750 STRUCTURAL STEEL
CIVIL / CONSTRUCTION M000751 NONFERROUS&ALLOYSTL
CIVIL / CONSTRUCTION M000753 BARBED WIRE

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CIVIL / CONSTRUCTION M000754 CEMNT&CEMNTPRODUCTS

CIVIL / CONSTRUCTION M000755 WOOD & WOOD PRODUCTS
CIVIL / CONSTRUCTION M000756 GLASS
CIVIL / CONSTRUCTION M000757 TARFELT & BITUMEN
CIVIL / CONSTRUCTION M000758 PIPES&PIPEFITTINGS
CIVIL / CONSTRUCTION M000759 VALVES
CIVIL / CONSTRUCTION M000760 SANITORY FITINGS
CIVIL / CONSTRUCTION M000761 PUMP SPARES
CIVIL / CONSTRUCTION M000762 WATER SUPPLY ITEMS
CIVIL / CONSTRUCTION M000763 CVL-MISCLENOUSITEMS
CIVIL / CONSTRUCTION M000764 BUILDING MATERIALS
CIVIL / CONSTRUCTION M000765 HORTICULTURE ITEMS
EXPLOSIVES M000800 BULK EXPLOSIVE
EXPLOSIVES M000801 CARTRIDGE EXPLOSIVES
EXPLOSIVES M000802 BLASTING ACCESSORIES
POL M000811 POL
SAFETY ITEMS M000820 SAFETY SHOES
SAFETY ITEMS M000821 PROTECTIVEEQUIPMENTS
SAFETY ITEMS M000822 FIRESUPRESSIONSYSTEM
SAFETY ITEMS M000823 RAIN SUITS
SAFETY ITEMS M000824 MISCLENOUS ITEMS
CHEMICALS M000850 CHEMICALS
CHEMICALS M000851 LABORATORY ITEMS
GENERAL NON-VALUATED M000852 IT CONSUMABLES
GENERAL NON-VALUATED M000853 NETWORK CONSUMABLES
GENERAL NON-VALUATED M000854 STATIONERY
GENERAL NON-VALUATED M000855 CANTEEN ITEMS
GENERAL NON-VALUATED M000856 SCHOOL ITEMS
GENERAL NON-VALUATED M000857 SPORTS ITEMS
GENERAL NON-VALUATED M000858 UNIFORMS
GENERAL NON-VALUATED M000859 LIVERIES
GENERAL NON-VALUATED M000860 PAINTS & BRUSHES
GENERAL NON-VALUATED M000861 WELFARE ITEMS
GENERAL NON-VALUATED M000862 GIFT ITEMS
GENERAL NON-VALUATED M000863 GENERAL ESSENTIAL
IT CONSUMABLES /SPARES M000870 NETWORKING, C&IT ITEM
GENERAL VALUATED ITEMS M000871 MISC OTHERS

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HOSPITAL M000890 MEDICINES

HOSPITAL M000891 MEDICAL CONSUMABLES
HOSPITAL M000892 HOSPITALGENERALITEMS
GENERAL M000893 GENERAL/ESSENTIALS
R&D M000895 R&D EQUIPMENT SPARES
CAPITAL EQUIPMENTS M000900 CPTL-HEMM EQUIPMENTS
CAPITAL EQUIPMENTS M000901 CPTL-L&H VEHCL-CMRCL
CAPITAL EQUIPMENTS M000902 CPTL-OCSLPLNTEQP
CAPITAL EQUIPMENTS M000903 CPTL-ELECLEQUIPMENTS
CAPITAL EQUIPMENTS M000904 CPTL-MEDICALEQP
CAPITAL EQUIPMENTS M000905 CAP- IT Equip/Items
CAPITAL EQUIPMENTS M000906 CPTL-LABORATORYEQP
CAPITAL EQUIPMENTS M000907 CPTL - WEIGH BRIDGES
CAPITAL EQUIPMENTS M000908 CPTL-GNRLEQUIPMENTS
CAPITAL EQUIPMENTS M000909 CPTL – AUTOWORKSHOP
CAPITAL EQUIPMENTS M000910 CPTL-WRKSHOPMACHINES
CAPITAL EQUIPMENTS M000911 CAPITAL – PUMPS
CAPITAL EQUIPMENTS M000912 Cap-Elect Services
CAPITAL EQUIPMENTS M000913 Cap-R&D
CAPITAL EQUIPMENTS M000914 Cap furniture ofc eqp
CAPITAL EQUIPMENTS M000915 Cap-Others
CAPITAL EQUIPMENTS M000916 CAPITAL-CRANES/HOIST
SIU ITEMS M000920 SIU ITEMS
SCRAP M000950 GENERAL – SCRAPS
RAW MATERIALS R000001 RAW MATERIALS
RAW MATERIALS R000002 FERO ALOYS & ADDTVES

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 Materials Management Manual, 2024
Chapter – 4
Annexure 4-I
(Clause 4.1.2d)

PROPRIETARY ARTUCLE CERTIFICATE (PAC)

(For CAPITAL Goods/ Plant/ Machinery/ Equipment or accessories including

Software/ Spares)

Item/ type / model number/ part number required along

1
with the specification. (Attach separate sheet if necessary)
Name of the manufacturer/ supplier of the item (Proposed
2
by the indentor)
Whether the proposed party is the sole manufacture/ sole
3
distributor of the item/Indian representative of the OEM.
Reference of previous purchase of above item if available
4
(Value, Name of supplier, P.O. number etc.)
Details of alternate substitute available. If no alternative
5 substitute exists, the fact must be recorded giving
specifications.
If the answer is yes for item (5) reason (s) for buying on
6
proprietary basis without resorting to Open/Limited Tender.
Indicate the efforts made to identify/ develop alternate
7
sources in this regard.
Date:

(Sectional Head)
Indenting Section

Certified that:
a. The item mentioned above is required to be procured on proprietary.
b. Justification in brief for purchasing the item on proprietary basis.

Submitted for approval of the Competent Authority.

Date: HoD

Head of the project / Competent Authority.

Approved

(HoP /Comp Auth)

Note: For Approval of CMD, PAC has to be routed through Functional Director

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 Materials Management Manual, 2024
Chapter – 4
Annexure 4-II
(Clause 4.3.3.4)

EMERGENCY CERTIFICATE
Date:___________

Place:___________

Project / Unit: ______________

1) Nature of Emergency: ______________________________________________

2) Details of Loss occurred, if any: ______________________________________

3) Financial & Legal implications of event: _________________________________

4) Steps taken for mitigation of loss : _____________________________________

5) Details of engagement of agency for executing emergency measures:

________________________________________

6) Remarks : ________________________________________________________

Certified that the above details are true to the best of my knowledge and belief and
the steps taken above were taken in good faith to _________ in the best interest of
Company.

_______________________

Signature of Head of Project / Unit

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 Materials Management Manual, 2024
Chapter – 4
Annexure 4-III
(Clause 4.4.3)

FORWARDING OF INDENTS FROM PROJECTS TO HO

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Chapter – 5
Annexure 5-I
(Clause 5.1.1)

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 Materials Management Manual, 2024
Chapter -5
Annexure 5-II
(Clause 5.20)

STANDARD OPERATING PROCEDURE (SOP) FOR PROCURING THROUGH GEM

1) The Materials Department dealing officers (Secondary User- Buyers) shall decide the
procurement through GeM after receipt of vetted & sanctioned Indents.

2) Ministry of Finance made GeM mandatory for all Government Organizations to

procurement all goods and services through GeM portal against Direct Purchase / L1-
Purchase / Normal Bid / Custom Bid / BOQ Bid / PAC vide OM No: F.1/26/2018-PPD
dated:02.04.2019.

3) In exceptional circumstances only, where procurement through GeM cannot be done,

purchase through other procurement methods as specified in MM Manual may be
resorted to with the prior approval of Competent Authority as per extant DoP. However,
valid reasons shall be recorded while seeking such approval.

4) Enabling provisions of Rule 149 of General Financial Rules-2017 a amended vide

Monistry of Finance OM dated 02.04.2019 regarding procurement through GeM and
necessary guidelines and terms and conditions thereon:

GeM portal may be utilized by the Government buyers for on-line purchases as
under:
a) Up to Rs.50,000/- through any of the available suppliers on the GeM, meeting the
requisite quality, specification and delivery period. For procurement of Automobiles
on GeM, through direct purchase shall be permitted without any celing limit (as per
DoE OM No.6/17/2021-PPD dt:18.01.2022).
b) Above Rs.50,000/- and up to Rs.10,00,000/- through the GeM Seller having
lowest price amongst the available sellers (excluding Automobiles where no ceiling
limit is applicable) of at least three dirrerent manufacturers, on GeM, meeting the
requisite quality, specification and delivery perios. The tools for online bidding and
online reverse auction available on GeM can be used by the Buyer if decided by
the jcompetent authority.

c) Above Rs.10,00,000/- through the supplier having lowest price meeting the
requisite quality, specification and delivery period after mandatorily obtaining bids,
using online bidding or reverse auction tool provided on GeM (excluding
Automobiles where no ceiling limit is applicable).

5) BOQ / Custom Bid & Bunching Bid Methods may be used for online bidding and
reverse auction, in case goods and services are not available on GeM Category.

6) After deciding or convincing that an item can be procured through GeM, the dealing
officers or buyers shall take approval from C/A as per extant DOP.

7) The practice of review of items of the indent for its quantities, estimates and its need
along with the budget provisions at the time of indent review and concurrence being
followed.

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8) The Reverse Auction (RA) option should be selected while creating the GeM BID (if
required).
9) Splitting option should be selected while creating the GeM BID (if required).
10) Any amendment / corrigendum to the e-bid invitation issued by the buyer shall be
uploaded on the GeM Portal on or before 07 days of BID due date.
11) The buyer reserves the right to postpone/cancel the e-bidding.
12) The participation by the seller in e-bidding shall be construed as his / her
acceptance for all the Terms and Conditions as outlined in the e-bidding
including General Terms and Conditions (GTC), Special Terms and Conditions (STC)
and Additional Terms and Conditions (ATC). However, the buyer shall have the right
to decide the technical and commercial acceptability of the individual bids based on
eligibility criteria and compliances as stipulated in the bid document.
13) ATC module available in e-bidding / RA modules of GeM. While creating BID buyer
can incorporate suitable eligibility criteria and important terms and conditions in
Additional Terms and Conditions by using various filters.
14) As per GeM, “The terms and conditions stipulated in STC & ATC will supersede those
in GTC and Terms and Conditions stipulated in ATC will supersede those in GTC &
STC in case of any conflicting provisions”.
15) In case, two or more acceptable bidders are found to have quoted identical lowest
bid price, buyer has to conduct Reverse Auction for the required goods among
the technically acceptable bidders. In case of services, the buyer the winner shall be
selected from amongst L-1 bidders through a Random Algorithm run by GeM system.

16) In case, the Final Price in the RA is not found reasonable then, Price Negotiation
option can be used with L1 Seller against the RA.

17) FLOATING OF LIMITED TENDERS:

While floating Limited Tender Enquiry (LTE) through GeM portal, the following clause
should be published in the Additional Terms and Conditions (ATC):

“This is a Limited Tender Enquiry and participation against this tender is by invitation
only. The invitation shall be sent by e-mail only. However, in case Manufacturer/OEM
authorizes their Distributors / Dealers the offer of such firms will also be considered
for evaluation subject to submission of valid authorization letter issued by
Manufacturers / OEM failing which the offers shall be rejected. Other bidders will not
be considered for this tender.

Prospective bidders, who are manufacturers and can supply the tendered items may
apply to NMDC Limited for vendor registration with all credentials along with dully
filled in application as per procedure available at www.nmdc.co.in in vendor
empanelment section.

Interested firms may be considered for vendor registration after following due
procedure and such registered firms may be considered for issue of enquiries for
future tenders.”

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18) FLOATING OF STE (WITH PAC/ WITHOUT PAC-NOMINATION)

While floating Single Tender Enquiry (STE) through GeM portal, the following clause
should be published in the Additional Terms and Conditions (ATC):

“This is a Single Tender Enquiry (STE) and participation against this tender is by
invitation only. The invitation shall be sent by e-mail only. However, in case
Manufacturer/OEM authorizes their Distributor / Dealer the offer of such firm will also
be considered for evaluation subject to submission of valid authorization letter issued
by Manufacturer / OEM failing which the offer shall be rejected. Other bidders will not
be considered for this tender.
Prospective bidders, who are manufacturers and can supply the tendered items may
apply to NMDC Limited for vendor registration with all credentials along with dully
filled in application as per procedure available at www.nmdc.co.in in vendor
empanelment section.
Interested firms may be considered for vendor registration after following due
procedure and such registered firms may be considered for issue of enquiries for
future tenders.”

19) DELIVERY TERMS:

a) All the Goods/Services on GeM shall be offered on FOR Destination basis unless
otherwise specified in STC/ATC.
b) Delivery period extension shall be done by the Buyer/Dealing officer as per the
delivery period specified by the seller in their offer documents without any
financial concurance and approval, as there is no provision available in GeM to
seller to indicate their delivery period while uploading their offer in GeM portal.
c) TSC should ensure to record the acceptance of delivery period as per offer in
consultation with TSC member from user/technical dept.
d) However, if seller fails to deliver the goods/services within the delivery period
quoated by them in their offer documents, such proposals shall be forwarded for
concurance and approval of C/A as per extant DoP.

20) PAYMENT TERMS:

a) As per the standard payment indicated in the MM manual may be followed.
(OR)
b) As per GeM, Payment shall be made to the seller as below:
i) In respect of Contracts for the supply of Goods, 100% payment including
GST should be made after receipt and acceptance of goods and
generation of “Goods CRAC” (Consignee Receipt and Acceptance
Certificate) subject to recoveries, if any, either on account of short supply
and Liquidated Damages etc. for delay in supply.

ii) In respect of Contracts for the Service, payment should be made as per
periodicity defined in the Contract i.e. Monthly, Quarterly or any other pre-
defined payment periodicity. 100% payment including GST for the
particular payment cycle should be made after receipt and acceptance of
services and generation of “Services CRAC” (Consignee Receipt and
Acceptance Certificate) subject to recoveries, if any, either on account of
short supply, SLA (Service Level Agreement) deviations and Liquidated
Damages for delay in supply etc.

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21) EMD/ SD/ PBG :
As per MM Manual followed with subsequent Amendments from time to time.

22) PURCHASE PREFERENCE POLICIES:

Purchase preference policies like MSE and MII (Make In India) shall be followed as
per GoI guidelines from time-to-time.

23) BID OFFER VALIDITY:

As per GeM, initially offer validity is 180 days from the date of publishing the BID.
Further it can be extended during financial evaluation against acceptance of L1
Seller.

24) LD/ LIQUIDATED DAMAGES :

As per MM Manual followed with subsequent changes from time to time.

25) INTEGRITY PACT:

a) "The Buyer" And “The Seller” hereby agree not to indulge in any corrupt practices
including without limitation any activity or action to influence the transaction on
any aspect of contract and commit to take all measures necessary to prevent
corruption maintaining complete transparency and fairness in all activities related
to GeM.

b) Guidelines should be as per MM Manual followed with subsequent changes from

time to time.

26) AMENDMENT/ CORRIGENDUM:

Any amendment / corrigendum, procedure laid down in the MM Manual should be
followed with subsequent changes from time to time.

27) OPENING OF TECHNICAL BID:

a) Technical Bids will be opened by the buyer on due date and time.

b) Extension of tender opening date shall be done by the dealing officer with the
approval of HOD(Materials).

c) After opening of technical bids, the bids shall be downloaded by the dealing
officer and same shall be forwarded to indenting/Technical dept to record the
technical appraisal.

d) All necessary Techno-commercial clarifications if required shall be sought by the

dealing officer from the respective bidders through GeM portal.

e) After completion of technical appraisal, the dealing officer shall putup the case to
the TSC for delibration/recommendations.The techno-commercial TSC
recommendatons shall be forwarded by the dealing officer for concurrance and
approval as per extant DoP.
f) Upon receipt of finance concurrence and C/A approval, the techno-commercial
qualified bids shall be accepted in the GeM portal.Other bids whose offer has not
been qualified shall be rejected in the GeM portal as per the provisions availble
therein.

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g) At present, GeM portal allows the bidders (whose offer has been rejected in the
GeM portal) to submit their representation within 48 Hours of rejection. In case of
NO representation, the BID gets automatically rejected without giving scope for
further representation.
h) In case any representation received from techo-commercially disqualified seller,
the dealing officer shall clarify the bidder the reasons for rejecting the bid by the
User/ Technical dept.

i) The rejection/ acceptance of the techno-commercial bids by TSC shall be final

and binding.

28) OPENING OF FINANCIAL / PRICE BIDS & REASONABILITY OF PRICES:

a) The Price bids of the techo-commercially accepted bidders shall be opened in

GeM by the dealing officer (buyer role in GeM). Financial Ranking is
automatically determined by the GeM.

b) After opening of price/ financial bid, GeM gives an option either to place the
order or cancel the bid. In case the L-1 price is not found reasonable, then
decision may be taken by the committee to Negotiate with L1 bidder (or)
otherwise.

c) If two or more bidders have quoted identical lowest bid price :

i) For Goods, Reverse Auction option available in GeM portal shall be used.
ii) For Services bids, the agency shall be selected from amongst L-1 bidders
through a Random Algorithm run by GeM system (or) manually by NMDC
based on lottery in presence of Committee.

29) PLACING OF ORDER:

a) GeM portal insists for uploading a copy of C/A approval while creating the
PO.The dealing officer shall create the PO on GeM.

b) As there is no integration between NMDC ERP system and GeM portal, the
purcase order in the ERP system is needs to be prepared to carryout inspection,
and to release payment.

30) INSPECTION & RECEIPT OF GOODS / SERVICES

a) The material receipt process (PRC) shall be completed first in GeM portal and
then simultaneously in ERP.
b) Inspection shall be carried out at source or destination by the NMDC as specified
in the GeM contract.
c) Corresponding entries in GeM for the receipt of material and its acceptance
(CRAC-Consignee Receipt and Acceptance Certificate) shall be done by
consignee in GeM stricktly within the time norms to avoid Auto PRC/ Auto CRAC.
d) Consignee should coordinate with respective User / Indentor to carry out the
Inspection of material and create CRAC within 10 days time period.

e) After CRAC in GeM, consignee will immediately forward the tax invoice along
with other related documents to Finance and a copy of CRAC will be sent to MM
dept for intimation to Buyer.

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f) In case of services, activity of Log verification and Consignee receipt and

acceptance certificate shall be equivalent to acceptance of services i.e. process
equivalent to creation of Service Entry Sheet in SAP. Process of CRAC shall be
carried out by Indentor who shall be consignee in this case.

31) PAYMENT

a) Buyer will create the draft bill immediately after CRAC.

b) Paying Officer will process the Bills within the stipulated time as per GeM and
releasing the payment via GPA, Internet Banking and Other modes after
complying all the PO terms and conditions. The payment particulars should be
uploaded on GeM portal after releasing of payment. Thereafter, the GEM
integration in ERP for completion of payment process in GeM shall be followed.
c) It shall be ensured by the stakeholders (Consignee, buyer and PAO) that entire
process of payment is completed within 10 days from the date of CRAC to avoid
violation of payment norms in GeM portal.

32) THE FOLLOWING OPTION CLAUSE AVAILABLE ON GEM PORTAL:

a) The Purchasers reserves the right to incerase or decrease the quantity to be

ordered up to 25 percent of bid quantiry at the time of placement of contract.
The purchaser also reserves the right to increase or decrease the ordered
quantity by 25% of the contracted quantity during the currency of the contract at
the contracted rates.Bidders are bound to accept the orders accordingly.

b) Buy Back for PFMS / Non GPA

NOTE:

The above SOP has to be followed while procurement of Goods and Services made
through GeM portal complying with MM Manual and DoP.

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TIME NORMS FOR COMPLETION OF PROCESSES / ACTIVITIES:

The time for all activities in GeM are specified in the documentation and online
resources available on their portal and these are to be strictly adhered. In case any
process like acceptance of goods is not carried out by the user in GeM within the
prescribed time limit, the system will assume that the goods are acceptable and
automatically carry out the process by itself at the end of the time limit.
GeM evaluates buyers’ performance also on a continuous basis based on
parameters like Timely Bid Closure, Timely Order Placing, Timely Acceptance and
Timely Payments etc. Completing respective activities well within time frame is of
utmost importance to maintain a good buyer rating in GeM portal.
Indentor / Buyer / Consignee/ Payment Authority shall ensure that all corresponding
activities in SAP/ GeM are done in the fastest time so as to adhere to the time limits
specified in GeM.
However, users shall be required to keep track of changes taking place in GeM by
keeping themselves abreast with documentation/ instructions available on GeM
portal and strictly follow the time norms stipulated therein.
Currently, the following time norms have been stipulated in GeM for various activities.

Time norms for activities in GEM related to Procurement of Goods

SI Process/ Time allowed(deadline) in
Action by
No. Activity in GeM GeM)
1. Order Within 10 days of carting period Buyer
placement for direct purchase.
Within bid validity for L1
purchase/ e-bidding / RA.
2 Provisional Receipt date to be entered upon Consignee
Receipt receipt of Goods in stores.
Certificate (within 4 days from the date of
(PRC) receipt of materials to avoid
auto PRC by GeM system)
3 Consignee Within 10 days of PRC Consignee in
receipt and generation, otherwise auto coordination with
acceptance CRAC will be done. Indentor/QAD and
certificate buyer
(CRAC)

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4. Payment in Within 10 days of CRAC 1.Consignee- for timely
GeM forwarding of
documents received
along with supply to
buyer/indenter.

2.Buyer — Creation
and Submission of
Draft bill

3.Finance Department
make payment to
vendor.

Payment made details

should be updated on
GeM Portal.

Enquiry / Helplines in GeM:

The GeM portal is continuously undergoing changes to its software as informed by
GeM SPV and hence, users will refer extensively to the training resources and
documentation available on the website of GeM.

There is also a support help desk of GeM, the contact details of which are available
on their website. Users will resolve their difficulties with the GeM support helpdesk.
GeM has put in place an Escalation Matrix. First level of contact to user is HelpDesk.

The first level of interface for the user to address their issues would be the Helpdesk
who would register the complaint and provide a ticket to the user to help in tracking
the issue. The contact details of first point of Help Desk are as under(users shall
confirm latest contact details from GeM before proceeding for any communication):

Toll free numbers: 1800-419-3436, 1800-102-3436

Web ticket on https://gem.gov.in/gemtickets
Email id: [email protected]

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Escalation Desk:
The maximum permissible time for resolving the issues relating to GeM operations is
48 hours. In case the issue has not been resolved by Help Desk even after 48 hours,
the user can directly contact the next level through email. The issue specific emails
for 2nd level of contact are as under:
1. Buyer Registration, log-in related issues: [email protected]
2. Direct Purchase/L1/PAC: [email protected]
3. BID/RA related issues: [email protected]
4. Order process related issues: [email protected]
5. Payment process related issues: [email protected]

User shall take up the issues directly with the escalation desk only if the issue is not
resolved even after 48 hours of generating a ticket with the Helpdesk. User will
mandatorily indicate the CRM ticket number while taking up the unresolved issues
with Escalation Desk.

In the absence of CRM ticket number or requests received directly without first
contacting Helpdesk, the Escalation Desk would redirect the mail to Helpdesk.
Hence, user shall not contact Escalation Desk in first attempt as it would create delay
in resolving the issue.

Training Modules on GeM portal:

The video tutorial and related training material for registration is available in GeM
vide URL : https://gem.gov.in/training/training module.

GeM GENERAL TERMS AND CONDITIONS (GTC):

GeM will publish the latest General Terms and Conditions (GTC) in the GeM portal.
All Buyers should check the latest GTC through the following link regularly.

Resources --> Terms and Conditions --> General Terms and Conditions

https://gem.gov.in/support/terms_conditions

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Chapter -6
Annexure 6-I(a)
(Clause 6.7.2)

PROFORMA FOR BANK GUARANTEE TOWARDS E.M.D.

(TO BE USED BY ALL NATIONALISED BANKS/ SCHEDULED COMMERCIAL BANKS)

(To be submitted on Rs.100/- Non judicial stamp paper and the non-judicial stamp paper
should be in the name of the issuing bank).

Ref. Bank Guarantee No.

Date:
To,

NMDC Ltd,
----------------

Dear Sirs,

In accordance with your invitation to tender under specification no._________________

M/s.______________ having its registered/Head Office at_______________ (hereinafter called the
Bidder) wish to participate in the said tender for__________________and you, as a special
favour, have agreed to accept an irrevocable and unconditional Bank Guarantee for an amount of
______________valid upto _________________on behalf of the Bidder in lieu of tender deposit
required to be made by the Bidder, as a condition precedent for participation in the said tender.

We, the _________________bank at __________ having our Head Office at______________(local

address) guarantee and undertake to pay immediately on demand by NMDC Ltd, the amount of
____________________(in figures and words) without any reservation, protest, demur and recourse.
Any such demand made by said Purchaser shall be conclusive and binding on us irrespective of any
dispute or difference raise by the Bidder.

This guarantee shall be irrevocable and shall remain valid upto_____________, if any further
extension of this guarantee is required, the same shall be extended to such required period on
receiving instructions from M/s____________whose behalf this guarantee is issued.

This date should be 30 days after the guarantee is valid.

In witness where of the Bank, through its banker has set its hand and stamp on this
____________20_______.

Name, Designation, and Code Number of Name, Designation, and Code Number
the Bank Officer(s) signing the Telephone No and Address of the
Guarantee(s) Controlling Officer of the Bank

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Chapter -6
Annexure 6-I(b)
(Clause 6.7.2)
GUARANTEE BOND FOR SECURITY DEPOSIT
(TO BE USED BY ALL NATIONALISED BANKS/ SCHEDULED COMMERCIAL BANKS)

1. In consideration of NMDC Limited, having agreed to exempt (hereinafter called “the said
Contractor(s)”) from the demand, under the terms and conditions of an Agreement no. dated
made between and and for (hereinafter referred to
as “the Bank”) do hereby undertake to pay to the NMDC Limited, Hyderabad an amount not
exceeding Rs. /- against any loss or damage caused to or suffered or would be caused to or
suffered by the NMDC Limited, Hyderabad by reason of any breach by the said Contractor(s) of
any of the terms and/or conditions contained in the said Agreement.

2. We Bank Limited, do hereby undertake to pay the amount due and payable under this guarantee
without any demur, reservation, recourse, contest or protest and/or without any reference to the
contractor, merely/on a demand from NMDC stating that the amount claimed is due by way of loss
or damage caused to or would be said Contractor(s) of any of the terms or conditions contained in
the said Agreement or by reason of the said Contractor(s) failure to perform the said Agreement.
Any such demand made on the Bank shall be conclusive as regards the amount due and payable
by the Bank under this guarantee. However, our liability under this guarantee shall be
restricted to an amount not exceeding Rs. /-.

3. We Bank Limited, further agree that the guarantee herein contained shall remain in full force
and effect during the period that would be taken for the performance of the said Agreement and
that it shall continue to be enforceable till all the dues of the NMDC under or by virtue of the said
agreement have been fully paid and its claim satisfied or discharged or till NMDC
certifies that the terms and conditions of the said Agreement have been on is at liberty to ask the
Bank before the expiring of this Bank Guarantee to extend the validity/ term of the Bank Guarantee
from time to time.

4. We Bank Limited, further agree with the NMDC that the NMDC shall have fullest
liberty without our consent and without affecting in any manner or obligations hereunder to vary any
of the terms and conditions of the said agreement or to extend time of performance by the said
contractor(s) from time to time or to postpone for any time or from time to time any of the powers
exercisable by the NMDC Limited, against the said Contractor(s) and to forbear or enforce any of
the terms and conditions relating to the said agreement and we shall not be relieved from our
liability by reason of any such variation, or extension being granted to the said contractor(s) or for
any forbearance, act or omission on the part of NMDC or any indulgence by NMDC to the said
Contractor(s) or by any such matter of thing whatsoever which under the law relating to sureties
would but for this provision have effect of so relieving us.

5. We, Bank Limited, lastly undertake not revoke this guarantee during its currency
except with the previous consent of the NMDC Limited, in Writing.

Dated the day of 20

For Bank Limited

Name, Designation, and Code Number of the Name, Designation, and Code Number
Bank Officer(s) signing the Guarantee(s) Telephone No and Address of the Controlling
Officer of the Bank

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Chapter -6
Annexure 6-I(c)
(Clause 6.7.2)

PROFORMA BANK GUARANTEE FOR MATERIALS PERFORMANCE

(To be stamped on Rs.100 non-judicial stamp paper)
(TO BE USED BY ALL NATIONALISED BANKS/ SCHEDULED COMMERCIAL BANKS)

Ref.__________ Bank Guarantee No.________

Date ---------

To,
The Consignee

Dear Sir,

In consideration of the NMDC Limited, (hereinafter referred to as the "Owner" which expression shall
unless repugnant to the context or meaning thereof, include its successors, administrators and
assigns) having awarded to M/s._____________ with its Registered/Head Office at
_______(hereinafter referred to as the 'Contractor' which expression shall unless repugnant to the
context or meaning thereof, include its successors, administrators, executors and assigns), a con-
tract by issue of Owner's Letter of Award No._________ dated_______ and the same having been
unequivocally accepted by the contractor resulting in a contract bearing No.________
dated________ valued at ______ for_______(scope of contract), and the Contractor having agreed
at provide a contract performance guarantee for the faithful performance of the entire contract
equivalent to *________% (_______ percent) of the said value after contract to the Owner.

We_____ (i.e. Name and address), having its Head Office at _______ (hereinafter referred to as
the Bank which expression shall unless repugnant to the context or meaning thereof, include its
successors, administrators, executors and assigns) do hereby guarantee and undertake to pay the
Owner, on demand any and all money payable by the Contractor to the extent of _________as
aforesaid at any time up to **_________ (i.e. days/month/year) with-out any demur, reservation,
contest, recourse or protest and/or without any reference to the contractor. Any such demand made
by the Owner on the Bank shall be conclusive and binding not with-standing any difference between
the owner and contractor or any dispute pending before any court, tribunal or any authority.

The Bank undertakes not to revoke this guarantee during its currency without previous consent of the
owner and further agrees that the guarantee herein contained shall continue to be enforceable till the
owner discharges this guarantee.

The owner shall have the fullest liberty without affecting in any way the liability of the Bank under this
guarantee from time to time to extend the time for performance of the contract by the contractor. The
owner shall have the fullest liberty, with-out affecting this guarantee is postpone from time to time the
exercise of any powers, vested in them or of any right which they might have against the contractor,
and to exercise the same at any time in any manner, and either to enforce or to forbear to enforce any
convenience contained or implied, in the contract between the owner and contractor or any other
course of or remedy or security available to the owner. The Bank shall not be released to its
obligations under these presents by any exercise by the owner of its liberty with reference to the
matters aforesaid or any of them or by reason of any other acts of omission or commission on the
part of the owner or any other indulgence shown by the owner or by any other matters or thing
whatsoever which under law would but for this provision, have the effect of relieving the Bank.

The Bank also agrees that the owner at its option shall be entitled to enforce this guarantee against
the Bank as a principal debtor, in the first instance without proceeding against the contractor and not
withstanding any security or other guarantee that the owner may have in relation the contractors’
liabilities.

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1) The Bank guarantee shall remain in full force and effect upto _____(date) and the Owner shall
have the right to demand or claim or en-cash / negotiable this Bank Guarantee within 3 months
after the aforesaid date i.e. _____ (date). A demand or claim in writing if received by us within the
period i.e. on or before __________(date) will be honored.

2) This Bank Guarantee shall be extended form time to time for such period by _________on
whose behalf this guarantee has been given as desired by the corporation.

WITNESS

DATED THIS_______ DAY OF__________20___ AT____

Name, Designation, and Code Number Name, Designation, and Code Number
of the Bank Officer(s) signing the Telephone No and Address of the
Guarantee(s) Controlling Officer of the Bank

NOTE:

* This sum shall be ten percent (10%) of the contract price.

** The date will be ninety (90) days after the end of the warranty period as specified in the
contract.

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Chapter -6
Annexure 6-II
(Clause 6.18)

AFTER SALES SERVICE

Service Nearest Location Contact

Equipment (Name and contact
numbers)
Depot/Warehouse
Group A
Group B
Service Facilities
Group A
Group B
Service Personnel
Group A
Group B

Note: The definition of Groups A and B are as below:

Group Depot/Warehouse Service facilities Service Personnel

A Major Sub- Full machine Fully trained

assemblies/ Overhaul. Assembly/specialist
Components Engineers.

Minor Sub- Major component Fully trained

assemblies/ Overhaul and Assembly /
Components repair commissioning
technicians.
Low cost Minor component Technicians
B assemblies/ Overhaul and
Components repair
Mechanics and
Consumables Routine Repairs Electricians.

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Chapter -6
Annexure 6-III
(Clause 6.24.1)
INTEGRITY PACT FORMAT
INTEGRITY PACT
Between
NMDC Ltd hereinafter referred to as “The Principal”
And
----------------------------- hereinafter referred to as “The Bidder / Contractor”

PREAMBLE

The Principal intends to award, under laid – down organizational procedures, contract/s
for (Description of the Equipment). The Principal values full compliance with all relevant
laws and regulations, and the principles of economical use of resources, and of fairness
and transparency in its relation with its Bidder/s and /or Contractor/s.

In order to achieve these goals, the Principal Cooperates with the renowned international
Non-Governmental Organization “Transparency International” (TI). Following TI’s
national and international experience, the Principal will appoint an external independent
Monitor who will monitor the tender process from the beginning till execution of the
contract for compliance with the principles mentioned HEREIN.

Section 1- Commitments of the Principal.

(1) The Principal commits itself to take all measures necessary to prevent corruption
and to observe the following principles:-

I. No employee of the Principal, personally or through family members, will in

connection with the tender for, or the execution of a contract demand, take a
promise for or accept, for him/herself or third person, any material benefit which
he/she is not legally entitled to.

II. The Principal will, during the tender process treat all Bidders with equity and
reason. The principal will in particular, before and during the tender process,
provide to all Bidders the same information and will not provide to any Bidder
confidential/additional information through which the Bidder could obtain an
advantage in relation to the tender process or the contract execution.

III. The Principal will exclude from the process all known prejudiced persons.

(2) If the Principal obtains information on the conduct of any of its employees which is a
criminal offence under the relevant Anti-Corruption Laws of India, or if there be a
substantive suspicion in this regard, the Principal will inform its Vigilance Office and
in addition can initiate disciplinary action.

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SECTION – 2 COMMITMENTS OF THE BIDDER/CONTRACTOR

(1) The Bidder / Contractor commit himself to take all measures necessary to prevent
corruption. He commits himself to observe the following principles during his
participation in the tender process and during the contract execution.

I. The Bidder / Contractor will not, directly or through any other person or firm,
offer, promise or give to the Principal, to any of the Principal’s employee
involved in the tender process or the execution of the contract or to any third
person any material or immaterial benefit which he/she is not legally entitled to,
in order to obtain in exchange an advantage during the tender process or the
execution of the contract.

II. The Bidder / Contractor will not enter with other Bidders into any illegal
Agreement or understanding, whether formal or informal. This applies in
particular to prices, specifications, certifications, subsidiary contracts,
submission or non-submission of bids or action to restrict competitiveness.

III. The Bidder / Contractor will not commit any criminal offence under the relevant
Anti- corruption Laws of India, further the Bidder/Contractor will not use
improperly, for purposes of competition or personal gain, or pass on to others,
any information provided by the Principal as part of the business relationship,
regarding plans, technical proposals and business details, including information
contained or transmitted electronically.

IV. The Bidder/Contractor will, when presenting his bid, disclose any and all
payments he has made, is committed to or intends to make to agents, brokers
or any other intermediaries in connection with the award of the contract.

(2) The Bidder / Contractor will not instigate third persons to commit offences outlined
above or be an accessory to such offences.

(3) The Bidder / Contractor may indicate the advantage of his offer compared to the
tender terms and conditions. The Bidder / Contractor shall not make any
commitment whatsoever on the offers / products of other bidder(s) thereby
influencing the principal to take decision of the former.
SECTION 3 – DISQUALIFICATION FROM TENDER PROCESS AND EXCLUSION FROM
FUTURE CONTRACT

(1) If the Bidder, before contract award, has committed a serious transgression
through a violation of Section 2 or in any other form such as to put his reliability or
credibility as Bidder into question, the Principal is entitled to disqualify the Bidder
from the tender process or to terminate the contract, if already signed, for such
reason.

(2) If the Bidder/Contractor has committed a serious transgression through a violation

of section – 2 such as to put his reliability or credibility into question, the principal is
entitled also to exclude the Bidder / Contractor from future contract award
processes. The imposition and duration of the exclusion will be determined by the

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severity of the transgression. The severity will be determined by the circumstances
of the case, in particular the number of transgressions, the position of the
transgressors with the company hierarchy of the Bidder and the amount of the
damage. The exclusion will be imposed for a minimum of 6 months and maximum
of 3 years.

(3) If the Bidder / Contractor can prove that he has restored/recouped the damage
caused by him and has installed a suitable corruption prevention system, the
Principal may revoke the exclusion prematurely.

(4) A transgression is considered to have occurred if in light of available evidence no

reasonable doubt is possible.

SECTION 4 – FORFEITURE OF EARNEST MONEY DEPOSIT/SECURITY DEPOSIT

(1) If the Principal has disqualified the Bidder from the tender process prior to the
award according to Section 3, the Principal is entitled to forfeit the bidders Earnest
Money Deposit.

(2) If the Principal has terminated the contract according to section – 3, or if the
Principal is entitled to terminate the contract according to section – 3, the principal
shall be entitled to forfeit the Earnest Money Deposit/Security Deposit.

SECTION 5 – PREVIOUS TRANSGRESSION

(1) The Bidder declares that no previous transgression occurred in the last three years
with any other company in any country confirming to the TI approach or with any
other Public Sector Enterprise in India that could justify it’s exclusion from the
tender process.

(2) If the bidder makes incorrect statement on this subject, he can be disqualified from
the tender process or the contract, if already awarded, can be terminated for such
reason.

SECTION 6 – EQUAL TREATMENT OF ALL BIDDERS/CONTRACTORS/SUB-

CONTRACTORS.

(1) The bidder/contractor undertakes to demand from all sub-contractors the

commitment consistent with this integrity pact, and to submit it to the Principal
before contract signing.

(2) The principal will enter into Agreement with identical conditions as this one with all
bidders, contractors and sub-contractors.

(3) The principal will disqualify from the tender process all bidders who do not sign this
pact and submit it to the Principal along with the offer.

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SECTION 7 – CRIMINAL CHARGES VIOLATING BIDDERS/CONTRACTORS/SUB-

CONTRACTORS

If the principal obtains knowledge of conduct of a Bidders/Contractors/Sub-Contractors,

or of an employee or a representative or an associate of a Bidders/Contractors/Sub-
Contractors which constitutes corruption, or if the principal has substantive suspicion in
this regard, the principal will inform the vigilance office.

SECTION 8 – EXTERNAL INDEPENDENT MONITOR

(1) The principal appoints competent and credible external independent Monitor for
this Pact. The task of the monitor is to review independently and objectively,
whether and to what extent the parties comply with the obligations under this
Agreement.

(2) The monitor is not subject to instructions by the representatives of the parties and
performs his functions neutrally and independently. He reports to the Chairman of
the Board of the Principal.

(3) The Monitor has the right of access without restriction to all Projects
documentation of the Principal. The Contractor will also grant the monitor, upon his
request and demonstration of a valid interest, unlimited access to his project
documentation. The same is applicable to Subcontractors. The Monitor is under
contractual obligation to treat the information and documents of the Bidder/
Contractor/Subcontractor with confidentiality.

(4) The Principal will provide to the Monitor sufficient information about all meetings
among the parties related to the Project provided such meetings could have an
impact on the contractual relations between the Principal and the Contractor. The
parties offer to the Monitor the option to participate in such meetings.

(5) As soon as the Monitor notices, or believes to notice, a violation of this Agreement,
he will so inform the Management of the Principal and request the Management to
discontinue or heal the violation or take other relevant action. The monitor can in
this regard submit non-binding recommendations. Beyond this, the Monitor has no
right to demand from the parties that they act in a specific manner, refrain from
action or tolerate action.

(6) The Monitor will regularly submit a written report to the Chairman of the Board of
the Principal and, should the occasion arise, submit proposals for correcting
problematic situations.

(7) If the Monitor has reported to the Chairman of the Board a substantiated suspicion
of an offence under relevant Anti-Corruption Laws of India, and the Chairman has
not, with reasonable time, taken visible action to proceed against such offence or
reported it to the Vigilance Officer, the Monitor may also transmit this information
directly to the Central Vigilance Commissioner, Government of India.

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SECTION 9 – PACT DURATION

This Pact begins when both parties have legally signed it. It expires for the Contractor 12
months after the last payment under the respective contract, and for all other Bidder’s 6
months after the contract has been awarded.

SECTION 10 – OTHER PROVISIONS

(1) This Agreement is subject to Indian Law. Place of performance and jurisdiction is
the Corporate Office of the Principal.

(2) Changes and supplements as well as termination notices need to be made in

writing: Side Agreements have not been made.

(3) Should one or several provisions of this Agreement turn out to be invalid, the
remainder of this Agreement remains valid. In this case, the parties will strive to
come to an Agreement to their original intentions.

(4) A person signing Integrity Pact shall not approach the courts while representing
the matters to IEMs and he/she will await their decision in this matter.

(5) Foreign bidders to disclose the name and address of agents and representatives in
India and Indian Bidders to disclosed their foreign principals or associates.

(6) Bidders to disclose the payments to be made them to agents/ brokers or any other
intermediary.

For the Principal For the Bidder/Contractor

Place Witness 1 :

Date Witness 2:

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CERTIFICATE
NAME OF THE TENDER:
TENDER ENQUIRY NO:
DATE OF TENDER ENQUIRY:

I/WE hereby undertake that

M/s………………………………………………………………….. confirm completeness of
“Integrity Pact” provided in Part-A of the tender document.

Signature of the authorized person

On behalf of M/s.______________________________

Place:

Date: Seal and Signature

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Chapter -6
Annexure 6-IV
(Clause 6.25.4)

CERTIFICATE OF CONFORMANCE TO BORDER SHARING CLAUSE

We have read the clause regarding Provisions for Procurement from a Bidder which
shares a land border with India, we certify that, bidder M/s (Name of
Bidder) is:

(i) Not from such a country [ ]

(ii) If from such a country, has been registered with the [ ]

Competent Authority.
(Evidence of valid registration by the Competent Authority shall be
attached)

(Bidder is to tick appropriate option (√ or X) above).

We hereby certify that bidder M/s (Name of Bidder)

fulfills all requirements in this regard and is eligible to be considered against the
tender.

Place: Signature of Authorized Signatory of Bidder

Date: Name:

NOTE:

“The Govt. of India Order O.M No: F. No: 6/18/2019-PPD dated 23-07-2020 w.r.t the bidders
from countries sharing land border with India and any other orders/ circulars related if any
from time to time shall be applicable”.

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Chapter – 6
Annexure 6- V
(Clause 6.29.1)
INCOTERMS

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Chapter - 7
Annexure-7-I
(Clause 7.2)

PROPOSAL FOR APPROVAL OF ISSUE OF ENQUIRY

1. File ref. Date:

2. Indent No:

3. Date:

4. Project:

5. Description of Item :

6. Cap/Rev: 7. Imp/ lnd or Both:

8. Indent Value:

9. Budget Provision:

10. Prop/ST Item :

11. Name of Prop/ST Source:

12. Proposed Mode of tendering : GT/OT/LT/ST/RO/:

13. Sources for issue of enquiry

From last File/ VENDOR LIST New Sources Proj/ Engg Suggestion

14. Established Sources not considered with reasons:

15. Remarks:

16. Competent Authority for approval:

(Dealing Officer)

Competent Authority

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Chapter – 7
Annexure 7- II
(Clause 7.2)

TENDER ISSUE REGISTER

PR NO & RE/ RFx No GeM BID NO Material Description Name of Tender Mode of Due Date/ Tender Revenue DO
S.No/ Date & Date & Date & Qty Vendors & issued Tender Extended Estimated / Capital Name &
Date Place through GeM GTE/OTE/ Date of value in Sign
/ e-Proc/ LTE/STE Opening Rs. Lakhs
Offline (Pro/No
m)
1 2 3 4 5 6 7 8 9 10 11 12
p

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Chapter -7
Annexure 7-III
(Clause 7.10)

DEMONSTRATION OF OFFERED PRODUCTS / SERVICES FOR TECHNICAL

QUALIFICATION

According to the existing guidelines on public procurement of goods, purchase in

accordance with a sample should not be usually undertaken. Calling 1 for a sample
along with the tender and deciding on the basis of evaluation of the sample may not
be done.

If desired, a purchaser’s reference sample may be displayed for prospective

Bidders to illustrate the desired indeterminable characteristics, which final supplies
from successful bidder(s) will have to meet in addition to the specifications/ drawings.
If required, in addition to the purchaser’s reference sample, the provision for the
submission of a pre-production sample matching the purchaser’s sample by
successful bidder(s) may be stipulated for indeterminable characteristics, before
giving clearance for bulk production of the supply.

However, in some cases (for example, electronic hardware, software etc.), it might
be necessary to ask the bidders for a demonstration of their offered products for
technical qualification. The following guidelines shall be followed in cases involving
demonstration of products by the bidders.

a) If demonstration of the item is necessary, the purchase enquiry proposal shall

include the need for demonstration of the products and the mode of
demonstration (physical / live online / recorded video demonstration). The
same shall be mentioned in the tender document with the approval of
Competent Authority.
b) The scope of such demonstrations shall be clearly defined in the tender
document. The demonstration shall be evaluated against the detailed
specifications mentioned as a part of the tender document only as far as
possible. The parameters for evaluation of samples shall be clearly specified
in the tender document.
c) The Bidder(s) shall bear all direct or consequential costs, losses and
expenditure associated with or relating to the demonstrations which may be
required by the NMDC. The tender documents shall clearly stipulate that all
such costs, losses and expenses shall remain with the Bidder(s) and the NMDC
shall not be liable in any manner whatsoever for the same, regardless of the
conduct or outcome of the Bidding Process.

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d) The Tender Committee shall call the otherwise techno-commercially qualified

bidders for demonstration of their offered products before the price bid
opening. Sufficient time shall be given for the bidders to prepare for the
demonstration. The minimum time (no. of days) to be given for preparation for
the demonstration shall be mentioned in the tender document.
e) In case of physical demonstration or live online demonstration, specific time
slots shall be given for each bidder. In case of recorded video submission, a
specific deadline for submission shall be given.
f) In case of physical demonstration, the demonstration of the offered products
by each bidder in front of the Tender Committee shall be video recorded and
the same shall be maintained for future references.
g) In case of live online demonstration, the demonstration session shall be
recorded and the same shall be maintained for future references.
h) Tender Committee shall document its evaluation of the demonstrated products
against the parameters declared in the tender document and shall classify the
products as acceptable or not acceptable.
i) All bidders, whose bid has been otherwise techno-commercially qualified, and
the demonstrated product has been deemed acceptable by the Tender
Committee, shall be considered for price bid opening. The same shall be
communicated to those bidders.
j) In case of rejection of techno-commercial bid of a bidder based on
demonstrated product’s evaluation by Tender Committee, the same shall be
communicated to the bidder. The price bid of those bidders shall not be
opened.
k) The Tender Committee’s evaluation and the recorded video of the
corresponding winning bidder’s demonstration shall be referred during
inspection for acceptance of the pre-production sample and / or full supply of
the products.

1
CVC’s circular: 2EE-1-CTE-3 dated 15 October 2003

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Chapter - 7
Annexure-7-IV
(Clause 7.12.1)

CONSTITUTION OF TENDER OPENING COMMITTEE & TENDER SCRUTINY COMMITTEE

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Chapter - 7
Annexure-7-V
(Clause 7.12.3)
PURCHASE PROPOSAL

1. Date:
2. Purchase File No. HQMM/
Last Note No: Last Page No. (Corresp):
No.of Pages (Note):

3.
a) Project:
b) Purchase Requisitions No:
c) Date:

4. (a) Whether Cap/ Rev: (b) Imp / Ind :

5. Indent Value:
6. Description of Material:
7. Whether proprietary in nature (Yes/ No):
8. Name of Proprietary Source:
9. Mode of Tender: Single / Limited/ Open/ Global Tender / Repeat Order/ RC
10.
a) No.of Firms Contacted:
b) Date of Tender Issued:

11. (a) Tender Due Date:

(b) Extension, if any:

12. Details of Offers Received:

(a) No. of received within due date:
(b) No. of regretted:
(c) No. of delayed:
(d) No. of late received:
(e) No. of Open Offers:

13. Comparative Statement:

a) Technical
b) Commercial:

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14. TSC Recommendations:

a) Initial:
b) Final:
15. Rank of the Offer Accepted:
16. Reasons for Ignoring Lower Offers, if any:
17. Name of the firms Recommended:

Basic Landed Cost(in Lakhs) Offer Validity

18. Name of Indian Agent (in case of import):

19. Agency Commission Payable :

20. Other Important Commercial Terms:

a) Price :
b) Taxes :
c) Duties, if any :
d) Packing & forwarding :
e) Delivery point :
f) Delivery period :
g) Payment terms :
h) Warranty :
i) Performance Guarantee :

21. Remarks about the proposal :

22. The above proposal for placement of order on M/s. mentioned at

para 17 above at a total estimated landed cost of Rs. Lakhs may
please be approved by . The proposal
fall within the powers delegated to .

Dealing officer
Section Head

HoD

Competent Authority

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Chapter – 7
Annexure 7- VI
(Clause 7.21.f)

PURCHASE ORDER/ AT REGISTER

File Tender PO/AT NO Item Name Estimat PO/ AT Value D MFR/ Firm M Capita Negotiation/ RA Cost
S. No./ thro & DATE Description of e Cost P Deale Category II l/ Rev Saving
N PR GeM/e- & Qty Supplier in Rs. r/ in Rs.
No Pro/ Ge SA & Lakhs Agent MSE/ Lakhs
& Offline M P Place SC/ST/ Neg Reduce
Date Basic Lande Women o/ d Price
Mode of Cost in d Cost RA in Rs.
Tender Rs. in Rs. Lakhs
GTE/OTE/ Lakhs/ Lakhs
LTE/STE Foreign
(Pro/Nom) Currency

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18

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Chapter – 7
Annexure 7- VII (a)
(Clause 7.23)

PROCESS LEAD TIME CHART – SINGLE BID SYSTEM

S.No Process Maximum Lead

time
1 Purchase Requisition Review / Scrutiny 7 days
Financial concurrence of PR and Approval of
2 7 days + 3 days
Competent Authority (CA)

3 Forwarding the approved PR to Purchase Section 3 days

3 days
4 Preparation of Purchase Enquiry Proposal
Financial concurrence of Purchase Enquiry
5 7 days + 3 days
Proposal and Approval of CA
Issue of Purchase Enquiries after receiving
6 7 days
approval of C/A
7 7 days
TSC meeting and recommendations on Price bid
Financial concurrence on price bid & Approval of
8 7 days + 3 days
C/A
Issue of LoA after receipt of approval for Price TSC
9 1 day
recommendations
Issue of PO
10 2 days

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Chapter – 7
Annexure 7- VII (b)
(Clause 7.23)
PROCESS LEAD TIME CHART – TWO BID SYSTEM

S.No Process Maximum Lead

time
1 Purchase Requisition Review / Scrutiny 7 days
Financial concurrence of PR and Approval of
2 7 days + 3 days
Competent Authority (CA)

3 Forwarding the approved PR to Purchase Section 3 days

Revenue Items – 3
4 Preparation of Purchase Enquiry Proposal days; Capital Items –
7 days
Financial concurrence of Purchase Enquiry
5 7 days + 3 days
Proposal and Approval of CA
Issue of Purchase Enquiries after receiving
6 7 days
approval of C/A
Initial Scrutiny by Purchase Officer before
7 2 days
forwarding for technical evaluation
Technical Evaluation & Commercial Evaluation
8 7 days
(Parallel)
TSC meetings and recommendation (techno-
9 7 days
commercial)
Financial concurrence on TSC meetings (techno-
10 7 days + 3 days
commercial minutes) & Approval of C/A

9 Opening of Price Bids after approval by Competent 1 day

Authority
10 7 days
TSC meeting and recommendations on Price bid
Financial concurrence on price bid & Approval of
11 7 days + 3 days
C/A
Issue of LoA after receipt of approval for Price TSC
12 1 day
recommendations
Issue of PO
13 2 days

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Chapter – 9
Annexure 9-I
(Clause 9.1.k)

A) STANDARD PRE-QUALIFICATION CRITERIA TERMS AND CONDITIONS:

The prospective Bidder (which term shall mean and include the manufacturer and/ or
its agent(s,) viz. Authorized Distributor/Dealer/Channel partner/ Marketing/ Trading
houses or by whatever other name is known) must have supplied and commissioned,
jointly or severally as the case may be at least 02 nos., of similar equipment
internationally (i.e. anywhere in India / outside India) or in India during the last 10
years ending last day of the month previous to the one in which tenders are invited.
At least 01 no. of such equipment must be working satisfactorily in India or
Internationally (i.e. anywhere in India / outside India) for a minimum period of one
year during the period from the date of commissioning to the day ending last day
of the month previous to the one in which tenders are invited. Documentary
evidence to the above should be enclosed.

List of Required documents for PQC Evaluation:

1) Copy of purchase order/ work order/ contract/ agreement

2) Copy of commissioning report indicating the same purchase order/ work
order/ contract / agreement reference as per s.no:1 above.
3) Copy of performance report indicating the same purchase order/ work
order/ contract/ agreement as per s.no:1 above.
4) Copy of Manufacturer Authorization Letter.

Similar Equipment means Equipment of same function and same or higher capacity
as per the Technical Specifications.

In case bidders who are not in a position to submit the past supply order copies,
invoices, commissioning report, satisfactory performance report etc., due to
confidentiality law of particular country, a copy of such laws should be enclosed
along with the offer for claiming exemption for submitting the above documents and
in such cases the bidder should enclose a customer list for the type and model of
equipment offered duly in signed and stamped by the Original Equipment
Manufacturer and duly notarized through their Indian counter Part / Agencies, clearly
indicating the customer Name & Address, Contact number and date, Date of supply,
erection & commissioning, guaranteed annual availability, if any, as per the
performance guarantee clause of the supply order / purchase order and actual
achieved annual availability for minimum period of 1 year for each equipment
supplied.

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The Bidder should give a self-certificate along with their offer in part- B i.e. techno
commercial bid, stating that the desired level of performance guarantee parameters
stipulated in the order, have been met and no guarantee/ warranty is pending against
the supplied order received by them. However, NMDC reserves the right to verify the
above or get the performance details from the concerned buyer/ customers of
equipment. Bidders are required to furnish relevant information regarding name of
the customer, contact details, supply order reference, date of commissioning, hours
already worked and present status.

The bidder should have well established after sales service, parts network and repair
facility in India or Internationally either through themselves or through their authorized
service agents. In case the bidder does not have such facility in India, they should
establish such facility within 03 months of supply of the equipment.

All Bidders should submit PQC supporting document details as below:

Customer PO Qty PO No & Date Installation & Performance

Name Commissioning Date Report Date

B) INTERNAL PERFORMANCE IN PQC:

NMDC reserves the right to verify the internal performance of the earlier supplied
similar/ higher capacity equipment, in the assessment period as mentioned in the
PQC clause.

The internal performance reports obtained from user departments will be

preferred over the performance reports submitted by the bidder and the decision
of NMDC regarding the techno-commercial evaluation of the offer will be final.

NOTE:
Above internal performance clause may be incorporated suitably on case to case
basis.

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Chapter – 10
Annexure 10-I
(Clause 10.2b)

STORES RECEIPT SERIAL (SRS) CONTROL REGISTER

SRS DATE RR/ Truck No.of Weight of Material Supplier AT NO Convey GRN Sign of
NO GRN No Packages/ Consignment Description Name & DATE Note No & NO & Stores
NO Cases/ received Date Date I/C
Items
received

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Chapter – 10
Annexure 10-II
(Clause 10.2c)
RAILWAY/ LORRY RECEIPT REGISTER

S.No Date R.R No/ LR No Name of Consigner Despatching Consignee Destination A.T No and Nature of
and Date Carrier Station Station Date goods

1 2 3 4 5 6 7 8 9 10

No.of Freight Weight Distance & Invoice Remarks in SRS No & Date GRN No Remarks
Cases Invoice No Amount RR and & Date
Paid To Pay Actual Charged Insurance

11 12 13 14 15 16 17 18 19 20 21

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Chapter – 10
Annexure 10-III
(Clause 10.2e)
CONVEY NOTE FORM FOR OUTWARD DESPATCHES (DEPARTMENTAL)

CONVEY NOTE NO & DATE:

GATE PASS NO & DATE:
To,
………………………
The following materials are issued to Shri. ……..…………………………………………………………….Designation & Token
No:………………………………………………………..dispatched through Vehicle No:……………………………………...
Please acknowledge receipt of materials per return.

S.No SRS No LR / RR No & Material Qty Supplier Name Challan / Invoice PO NO &
& Date Date Description No & Date Date

PURPOSE: FOR INSPECTION/ INSTALLATION & COMMISSIONING

Signature of Recipient Signature of Driver Stores Asst. Stores I/C

Copy to:
1) Materials Dept
2) User dept
3) CISF Commandant

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Chapter – 10
Annexure 10-IV
(Clause 10.4.1 i)

STOCK SURPRISE CHECKING REGISTER

S.No Date Name of Folio/ Card Location Description A/U Book Balance
Custodian No
1 2 3 4 5 6 7 8

Physical Discrepancy Condition of Date of Last Signature of Signature of

Balance Material Verification Custodian Stores I/C

Shortage Excess

9 10 11 12 13 14 15

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Chapter – 10
Annexure 10-V
(Clause 10.4.1 ii)
H.S.D / PETROL (MS) TANK DIP REGISTER

CENTRAL STORES DEPT

TANK LOCATION: MONTH:

Date OPENING READING Meter Sign of Initial of I/C Qty received Qty issued
Reading Custodian during the during the day
Time of Dip in Qty as Book day
Dip Cm. per Dip Balance
1 2 3 4 5 6 7 8 9 10

CLOSING READING Difference in Litres Sign. of Sign of Re-marks

Custodian I/C
Time DIP in Qty as per Meter Balance Shortage Excess
of DIP Cm. DIP Reading Book
11 12 13 14 15 16 17 18 19 20

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Chapter – 10
Annexure 10-VI
(Clause 10.6.10)
GUIDELINES FOR HANDLING LOSS OF HSD AND MS

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Chapter – 10
Annexure 10-VII (a)
(Clause 10.11.4)

UNSERVICEABLE / SCRAP MATERIAL RETURN VOUCHER

Voucher No & Date:……………………………………………………….

Name of Transporter & Truck No:……………………………………….
Material Collected Location:………………………………………………
S.No N Stores Material Description UoM Quantity Balance after Remarks
Ledger Posting
a Folio
Return Received
m
1 e 2 3 4 5 6 7 8

&
Designation of Returning Officer: ………………………………

NOTE: Certified that the above materials are inspected and found to be unserviceable / scrap.

Sign of Returning Officer Sign of HOD Stores Custodian Stores I/C

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Chapter – 10
Annexure 10-VII (b)
(Clause 10.11.4)

NUMERICAL LEDGER REGISTER OF UNSERVICEABLE / SCRAP MATERIAL

Material Category:…………………. FOLIO NO:……….

Material Description:………………. UNIT:……………..

LOCATION:………………………….
Date Received Received Quantity Sign of Receipt or Received Quantity Sign of
or Issued from or Custodian Issue Voucher from or Custodian
Voucher Issued to Issued to
No Receipt Issue Balance No Date Receipt Issue Balance

1 2 3 4 5 6 7 1 2 3 4 5 6 7

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Chapter - 10
Annexure – 10 – VIII
(Clause No: 10.12)

NMDC LIMITED, HYDERABAD

No.Prod/Misc/92
October 1, 1992
CIRCULAR

SUB: CANNIBALISATION OF EQUIPMENT

Vide Circular No. HQMM/15(3)/policy dated 31.03.1989 issued by the Materials Management
Department guide lines for reclamation of useable parts from the old equipment which have
crossed their useful life, were given. The steps are:

i) Recommendations of survey committee that the equipment is beyond

economical repairs and maintenance and the same should be replaced.
ii) Recommendations of the project committee that the equipment cannot
fetch justifiable price and therefore should be cannibalized to reclaim
useable parts and assemblies.
iii) Getting approval of competent authority for Cannibalisation of equipment.

You are now requested to give a statement in the following format in respect of equipment
cannibalized at the project.

1. Name of equipment
2. Proj S.No of equipment
3. Engine No and Chassis No. of the equipment
4. Ref. No. and date of project committee’s recommendations for replacement or
return to stores for disposal.
5. Ref. No. and date of project committee’s recommendations that equipment
should be cannibalized instead of being disposed off.
6. Ref. No. and dated under which recommendations sent to HO for approval of
competent authority.
7. Ref. No. and date of approval of competent authority for Cannibalisation of
equipment.

This information is required to ensure that proper records have been maintained in respect of
equipment which have been cannibalized. In case action on these lines have not been taken
so far the same should be taken immediately and status intimated.

Director (Production)

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Chapter - 11
Annexure 11-I
(Clause 11.2 h)
PROFORMA FOR OBSOLETE DECLARATION
(Details of Equipment recommended for Surplus/ Unserviceable declaration)

S.No Equipment Date of Hours worked Cost of Present Book Present Cost of Remarks
Commissioning Purchase Value on Condition spares held
date on stock
1 2 3 4 5 6 7 8 9

Signature of the Committee Members:

1)
2)
3)

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APPENDICES
APPENDIX-I

DEFINITION OF THE TERMS USED

1) Definition of Goods, Services and Works:

i) Procurement of new product along with Installation, commissioning, training,

AMC/CMC should be handled as Procurement of Goods.

ii) Procurement of Repair, Maintenance, Overhauling, AMC/CMC or similar work for

existing Electrical (or) Mechanical Assets should be normally be handles as
Procurement of Services.

iii) In case of composite Contracts for Goods and Services, if the Procurement value of
Goods is substantial and rendering service is incidental then such procurement shall
be handled as Procurement of Goods.

Similarly, if the Procurement value of Services is significant and supply of goods is

incidental to the contract then such procurement shall be handled as Procurement
of Services.

iv) In any case, rules for Procurement of Goods and Services are almost same.

v) The construction, fabrication, repair, maintenance, overhaul, renovation, decoration,

installation, erection, excavation, dredging, and so on, of Civil Assets should be
handled as Procurement of Works.

(Refer: DOE OM: No. F.6/2/2023 – PPD dt: 13.01.2023.)

2) Definition of OEM / OES / OPM / Proven Sources:

a) OEM – Means, Original Equipment Manufacturer.
b) OES – Means, the authorized supplier of Original Equipment Manufacturer. Only
those firms who have the current authorization and/or technical collaboration with
OEM for supply of their equipment and giving technical services would be treated as
OES.
c) OPM – Means, Original Parts Manufacturer falling under the following categories:
i) The original manufacturers of assemblies, sub-assemblies or component of the
original equipment.
ii) The original manufacturers of spare parts / items of assemblies, sub-assemblies
or component of the original equipment.
d) Proven Sources – Means sources who have manufactured and supplied tendered
Spare Parts, Assemblies, sub-assemblies or components in the past to NMDC or
other PSUs/Government Departments/Private Organizations and these items have
performed satisfactorily for a period of not less than one year from the date of
fitment/commissioning.

3) Annual PRs: PRs covering the annual requirements fo items.

4) Amendment: A document authorizing change in an earlier document issued.

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5) Capital PRs: PRs covering requirement of Capital items.

6) Capital Items/ Goods: Capital items/Goods means any plant, Machinery, Equipment
or Accessories required for manufacture or production either directly or indirectly, of
goods or for rendering services, including those required for replacement,
modernization, technical up gradation ore expansion.

7) Consumables: Which get consumed in the process and do not form part of end
product or general stores.

8) Competent Authority / Approving Authority: Competent Authority / Approving

Authority in respect of matters incidental to Purchase of stores, powers have been
delegated to the officers at different levels in NMDC. The officers os empowered are
defined as Competent Authority.

9) Capital and Revenue: The term Capital would mean items of capital nature involving
procurement. The term revenue would mean the expenses of revenue nature involved
in procurement of material required for running and maintenance of the plant and
machinery.

10) Delivery Period: Is the time allotted to a supplier for effecting the supply of items as
per purchase order.

11) Emergency PRs: PRs covering Break down/ Emergency requirements.

12) Inputs: The terms “in-puts” to the production system would mean all requirements
required for production of end product and included raw materials, components,
consumables, spares, capital equipment and any other requirement such as repairing
and reconditioning services required for production purposes.

13) Lead Time: The time required to make available an item at works from the time the
intimation for its requirement is received at Head Office.

14) Limited Tender: An Enquiry in which participation is limited to those who are invited to
quote. The enquiry will be sent to all those firms in particular category where
categorization has been done.

15) Negotiation: Negotiation is the process of discussion and arriving at mutual agreement
between the buyer and the seller.

16) Open Tender: A requirement in which the participation is opened to all who can satisfy
the requirement of supply

17) Purchase Requisition/Indent: Purchase Requisition/Indent are used as synonyms

and would mean the intimation of requirement for material in prescribed format.

18) Purchase Order: A The document requesting for supply of material issued to the
supplier. This is a legal document and constitutes an offer and constitutes a contract by
virtue of the offer of the supplier and acceptance by the buyer.

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19) Regular/ Routine PRs: The term “regular/routine indents” are used as synonyms
would mean requirement of regular/routine items.

20) Restricted Tender: An Enquiry in which participation is limited to those who are invited
to quote by issuing enquiries to a selected number of firms out of the registered list of
suppliers for the class of goods required.

21) Repeat Order: A Purchase Order issued on the same supplier for the same item.

22) Single Tender: An Enquiry sent to only one party seeking offer.

23) Specifications: The term “specifications” would mean a detailed description of the
requirement in terms of physical and chemical properties and functional requirements.

24) Standard: A standard specification would mean, a specification as per I.S or any other
international standard.

25) Spares, Components and Accessories: Those are the items required for smooth
and continuous operation of the plant and machinery.

.
26) The terms used as “Bidders”, “Tenderers”, “Vendors”, “Suppliers” etc. are all synonyms
and would mean sources from where the requirements are procured.

27) The terms used as “Offer”, “Tender”, “Bid” and “Quotation” are all synonyms and would
mean the same.

28) The terms used as “Finance” and “Accounts” are synonyms and would mean the
Department connected with financial matters.

29) The term “Destination Cost” would mean the cost inclusive of Packing & Forwarding,
Freight, Insurance, Taxes and Duties up to the destination point.

30) The terms used as “Accounting Unit (A/U)” / “Unit of Measurement” are synonyms and
would mean the same.

31) The term “rate, price and cost” are used as synonyms and would mean the cost at
which the item is ordered or procured.

32) The term “Authorised agent, Dealer/Distributor” are all used as synonyms and would
mean an authorized representative of manufacturer who sell the product manufactured
by them.

33) The term “Acceptance of Tender (AT)”, “Purchase Order” and “Supply Order” are all
used as synonyms and would mean the same.

34) “Excepted Matters” is defined as – “Arbitration Agreement terms consists of conditions

stating that disputes arising out of certain issues cannot be open for adjudication for
arbitration which are deemed as excluded from the scope of arbitration. These are called
‘Excepted Matters’.

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The following is list of “Excepted Matters” and on which clauses/issues the decision of owner /
Engineer in Charge / Site in Charge is final and binding, the Supplier shall not raise any dispute
on any such account (the decision owner/engineer in charge/site in charge) and the same shall
not be arbitrable”

1) Interpretation of Purchase Order documents

2) Special conditions of the Purchase Order
3) Submission of tender
4) Supplier’s onus and duties before filing tender document

APPENDIX -II
PROCUREMENT GLOSSARY:

AS PER DOE PROCUREMENT OF GOODS MANUAL SECOND EDITION (AUG -20224)

1) “Agent” is a person, or a legal entity employed to act for/ represent another (called the
Principal) in dealings with a third person or legal entity. In public Procurement, an
Agent is a representative participating in the Tender Process or the execution of a
Contract for and on behalf of its principals.

2) “Allied firm” (‘affiliates’/ ‘affiliated firm’, ‘sister concern’, ‘associated firm’, or ‘related
party’) of a bidder/ contractor (Principal firm, including Joint Venture Company) is a
firm/ concern (including Joint Venture Company) that comes within the sphere of
effective control/ influence of the principal firm, wherein the Principal Firm – i) being a
proprietary firm, owns the Allied Firm, ii) being a partnership firm, has common (all or
majority of) partners, or any one of its partners has profit share of 20% or more, in the
Allied Firm iii) has common Management (say majority of director) with the Allied firm;
iv) its partners or directors have a majority interest in the management of the Allied
Firm; v) has a controlling voice by owning substantial (20% or more) shares in the
Allied Firm; vi) directly or indirectly controls or is controlled by or is under common
control, by way of any agreement/ MoU or otherwise with the Allied Firm, v) has the
Allied Firm as its successor/ subsidiary or vice-a-versa; vii) has common offices/
manufacturing facilities with the Allied Firm.

3) "Bid" (‘tender,’ ‘offer,’ ‘quotation’ or ‘proposal’) means an offer to supply goods,

services or execution of works made in accordance with the terms and conditions set
out in a document inviting such Bids;
4) "Bidder" (‘bidder,’ ‘consultant’, ‘tenderer’, ‘contractor’ or ‘service provider’) means any
eligible person, firm, or company, including a consortium (that is, an association of
several persons, firms, or companies) participating in a procurement process with a
procuring entity;

5) "Bid security" (‘Earnest Money Deposit’(EMD), or ‘Bid Security Declaration’) means

security from a bidder securing obligations arising from its Bid, i.e., to avoid the
withdrawal or modification of its Bid within its validity, after the deadline for submission
of such Bids; failure to sign the resulting contract or failure to provide the required
security for the performance of the resulting contract after its Bid has been accepted;

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or failure to comply with any other condition precedent to signing the resulting contract
specified in the solicitation documents;
6) “Bill of Quantities” (Price Schedule, Financial Bid or BOQ) means the priced and
completed Bill of Quantities forming part of the bid.
7) “Central Public Sector Enterprise” means a body incorporated under the Companies
Act or established under any other act in which the Central Government directly or
indirectly owns more than 50 per cent of the issued share capital;

8) “Class-I local supplier” means a supplier or service provider, whose goods, services
or works offered for procurement, meets the minimum local content as prescribed
for ‘Class-
9) I local supplier’ under the Public Procurement (Preference to Make in India), Order
2017 ;
10) “Class-II local supplier” means a supplier or service provider, whose goods, services
or works offered for procurement, meets the minimum local content as prescribed
for ‘ClassII local supplier’ but less than that prescribed for ‘Class-I local supplier’
under the Public Procurement (Preference to Make in India), Order 2017 ;

11) “Competent authority” (Competent Financial Authority) in respect of the powers of

approval in a procurement process or execution of a resultant contract means an
authority to which such power is delegated.

12) “Consignee” means the person to whom the goods are required to be delivered as
stipulated in the contract. A contract may provide the goods to be delivered to an
interim consignee for further despatch to the ultimate consignee.

13) “Consultancy services” means a one-off (that is, not repetitive and not routine)
services involving project-specific intellectual and procedural processes using
established technologies and methodologies, but the outcomes – which are primarily
of a non-physical nature – may not be standardised and would vary from one
consultant to another. It may include small works or supply of goods that are
incidental or consequential to such services;

14) “Contract” (‘Procurement Contract', ‘Purchase Order’, ‘Supply Order’, ‘Withdrawal

Order,’ ‘Work Order’, ‘Consultancy Contract’, ‘Contract for Services’, ‘Rate Contract’,
‘Framework Agreement’, ‘Letter of Award, ‘Agreement’, ‘Repeat Order’, or a ‘Formal
Agreement’, ), means a formal legal agreement in writing relating to the subject
matter of Procurement, entered into between the Procuring Entity and the supplier,
service provider or contractor on mutually acceptable terms and conditions and
which are in compliance with all the relevant provisions of the laws of the Country;

15) “Contractor” (‘Supplier’ or ‘Service Provider’ or ‘Consultant’ or ‘Firm’ or ‘Vendor’ or

‘Manufacturer’ or ‘Successful Bidder’ ) means the person, firm, or company,
including a consortium (that is, an association of several persons or firms or
companies - Joint Venture/ consortium) with whom the contract is entered into and
shall be deemed to include the contractor's successors (approved by the Procuring
Entity), agents, subcontractor, representatives, heirs, executors, and administrators
as the case may be unless excluded by the terms of the contract;

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16) “e-Procurement” means the use of information and communication technology

(especially the internet) by the procuring entity in conducting its procurement
processes with bidders for the acquisition of goods (supplies), works and services
with the aim of open, nondiscriminatory, and efficient Procurement through
transparent procedures;

17) "Goods" (‘Stores’, Item(s) or ‘Material(s)’) includes all articles, materials,

commodities, livestock, medicines, furniture, fixtures, raw materials,
consumables, spare parts, instruments, hardware, machinery, equipment,
industrial plant, vehicles, aircraft, ships, railway rolling stock, assemblies, sub-
assemblies, accessories, a group of machines comprising an integrated
production process or intangible products (e.g. technology transfer, licenses,
patents, software or other intellectual properties) but excludes books,
publications, periodicals, etc., for a library, procured or otherwise acquired by a
procuring entity. Procurement of goods may include certain small work or some
services that are incidental or consequential to the supply of such goods, such as
transportation, insurance, installation, commissioning, training, and maintenance
(Rule 143 of GFR 2017).;

18) “Indentor” (‘User (Department)’) means the entity and its officials assessing the
need for procurement and initiating a procurement indent, that is, a request to the
procuring entity to procure goods, works, or services specified therein;

19) “Inspection” means activities such as measuring, examining, testing, analysing,

gauging one or more characteristics of the goods, services or works and
comparing the same with the specified requirement to determine conformity.
20) “Inspecting Officer” means the person or organisation stipulated for inspection
under the contract and includes his/ their authorised representative(s);

21) “Intellectual Property Rights” (IPR) refers to the owner’s rights against
unauthorised possession/ exploitation by others of its tangible or intangible
intellectual property. It includes rights to Patents, Copyrights, Trademarks,
Industrial Designs, and Geographical indications (GI).
22) “Inventory” means any material, component or product that is held for use later;
23) "Invitation to (pre-)qualify" means a document including any amendment thereto
published by the Procuring Entity inviting offers for pre-qualification from
prospective bidders;
24) “Letter of Award” (‘Letter of Intent’ or ‘Notification of Award’) means the letter or
memorandum communicating to the contractor the acceptance of his bid for
award of the contract;
25) “Local Content” means the amount of value added in India which shall, unless
otherwise prescribed by the Nodal Ministry, be the total value of the item
procured (excluding net domestic indirect taxes) minus the value of imported
content in the item (including all customs duties) as a proportion of the total
value, in percent.

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26) "Model Tender Document(s)" (‘Tender (Enquiry) Document(s)’, ‘Request for

Proposal Documents’, or ‘Standard Bidding Document(s)’) means a document
issued by the procuring entity, including any amendment thereto, that sets out the
terms, conditions of the given Procurement. A Model Tender Document is the
model template to be used for preparing a Tender Document after making
suitable changes for specific Procurement;
27) “Non-consultancy services” (‘Outsourcing of Services’) are defined by exclusion
as those services that cannot be classified as Consultancy Services. These
involve routine, repetitive physical, procedural, and non-intellectual outcomes for
which quantum and performance standards can be clearly identified and
consistently applied and are bid and contracted on such basis. It may include
small works or a supply of goods or Consultancy, which are incidental or
consequential to such services;
28) “Non-Local supplier” means a supplier or service provider, whose goods, services
or works offered for procurement, has local content less than that prescribed for
‘Class-II local supplier’ under the Public Procurement (Preference to Make in
India), Order 2017 ;
29) "Notice inviting Tenders" (‘Invitation to Bid’ or ‘Request for Proposals’) means a
document and any amendment thereto published or notified by the procuring
entity, which informs the potential bidders that it intends to procure the subject
goods, services, works or a combination thereof;
30) “Parties”: The parties to the contract are the Contractor and the Procuring Entity,
as defined therein;
31) “Performance Security” (‘Security Deposit’ or ‘Performance Bond’ or
‘Performance Bank Guarantee’ or other specified financial instruments) means a
monetary guarantee to be furnished by the successful Bidder or Contractor in the
form prescribed for the due performance of the contract;
32) “Place of Delivery” The place specified in the contract for delivery of the Goods
after approval by the Inspecting Officer (If provided in the contract). These can be
the following places as per the terms and conditions of the contract -
a) The consignee at his premises or
b) Where so provided, the interim consignee at his premises or
c) A carrier or other person named in the contract for transmission to the
consignee or
d) The consignee at the destination station, in case of a contract stipulating the
delivery of goods at the destination station.
33) "Pre-qualification (bidding) Procedure" means the procedure set out to identify,
prior to inviting bids, the bidders that are qualified to participate in the
Procurement;
34) "Pre-qualification Document" means the document, including any amendment
thereto issued by a procuring entity, which sets out the terms and conditions of
the prequalification bidding and includes the invitation to pre-qualify;

35) "Procurement" (or the terms "Public Procurement" or ‘Government Procurement/

Purchase’ including an award of Public-Private Partnership projects) means
acquisition by way of purchase, lease, license or otherwise, either using public

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funds or any other source of funds (e.g. grant, loans, gifts, private investment
etc.) of goods, works or services or any combination thereof, by a procuring
entity, whether directly or through an agency, but does not include any acquisition
of goods, works or services without consideration, and the term "procure" or
"procured" or “purchase”/ “purchased” shall be construed accordingly;

36) “(Public) Procurement Guidelines” means guidelines applicable to Public

Procurement, comprising a hierarchy of Statutory framework, Rules and
Regulations, Manuals of Procurement and Procurement Documents as detailed in
Annexure 1 of this Manual;
37) “Procurement Officer” means the officer signing the Letter of Award (LoA) and/ or
the contract on behalf of the Procuring Entity;
38) "Procurement Process" means the process of Procurement extending from the
assessment of need, Bid Invitation Process, Bid Evaluation and Award of Contract
to the Contract Management;
39) “Procuring Authority” means the officer who finally approves, as well as those
officials and committee members who submit the notes/ reports to approve any
decision.
40) "Procuring Entity" means the entity in any Ministry or Department of the Central
Government or a unit thereof or it's attached or subordinate office to which powers
of Procurement have been delegated and handles the entire procurement process,
ensuring efficiency, transparency, fair treatment of suppliers, and the promotion of
competition;
41) “Procuring Organisation” means the Organisation for which the procurement is done
to fulfil its stated objectives, assigned duties/ obligations/ responsibilities/ functions,
and activities in alignment with desired policy outcomes;
42) "Prospective bidder" means anyone likely or desirous to be a bidder;
43) "Public Private Partnership" means an arrangement between a public entity on one
side and a private sector entity on the other for the provision of public assets or
public services or both, or a combination thereof, through investments being made
or management being undertaken by the private sector entity, for a specified period,
where there is predefined allocation of risk between the private sector and the public
entity and the private entity receives performance-linked payments that conform (or
are benchmarked) to specified and predetermined performance standards,
deliverables or Service Level agreements measurable by the public entity or its
representative;
44) "Rate contract" (‘framework agreement’) means an agreement between a Central
Purchase Organisation or a procuring entity with one or more bidders, valid for a
specified period, which sets out terms and conditions under which specific
procurements can be made during the term of the agreement and may include an
agreement on prices which may be either predetermined or be determined at the
stage of actual Procurement through competition or a predefined process allowing
their revision without further competition;
45) “Registering authority” is an authority that registers bidders for various procurement
categories;
46) "Registered Supplier" means any supplier who is on a list of registered suppliers of
the procuring entity or a Central Purchase Organisation;

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47) "Reverse auction" (‘Electronic reverse auction’) means an online real-time

purchasing technique utilised by the procuring entity to select the successful bid,
which involves presentation by bidders of successively more favourable bids during
a scheduled period and automatic evaluation of bids;
48) "Scheduled Commercial Bank" means a bank listed in the Second Schedule of the
Reserve Bank of India Act, 1934.

49) "Service" means any subject matter of Procurement that has non-tangible outputs,
as distinguished from goods or works, except those incidental or consequential to
the service, and includes physical, maintenance, professional, intellectual, training,
Consultancy and advisory services or any other service classified or declared as
such by a procuring entity but does not include the appointment of an individual
made under any law, rules, regulations, or order issued in this behalf. It includes
‘Consultancy Services’ and ‘Other (Non-consultancy) Services;’

50) “Special Conditions of Contract” means Special Conditions that override the General
Conditions if and to the extent of the conflict between the two.
51) "Subject Matter Of Procurement" means any object of Procurement, whether in the
form of goods, services or works or a combination thereof;
52) ‘Tender Document’ means the document (including all its sections, appendices,
forms, formats, etc. and various terms prevalent for such documents) published by
the Procuring Entity to invite bids in a Tender Process. The Tender Document and
Tender Process may be generically called “Tender" or "Tender Enquiry", which
would be evident from context without ambiguity.

53) “Tender Process” is the entire process from the publishing of the Tender Document
to the resultant award of the contract.
54) ‘Total Cost of Owning’ - TCO (Life Cycle Costing - LCC, Whole of Life Costing -
WOL) encompasses all costs associated with acquiring (including the price paid to
the supplier), operating, maintaining, and disposing of a product or service.
Essentially, the three terms refer to the cost incurred on a product during its lifetime.
However, LCC has evolved beyond that to consider the cost of the impact of the
product on the environment and, therefore, is mostly used as a tool in Sustainable
Public Procurement. WOL is used mostly in capital-intensive assets, infrastructure
projects, and long-term investments, and TCO is used mostly in procurement of
Goods.

55) "Works" refer to any activity with a tangible and physical output sufficient in itself to
fulfil an economic or technical function involving construction, fabrication, repair,
overhaul, renovation, decoration, installation, erection, excavation, dredging, and so
on, which make use of a combination of one or more of engineering design,
architectural design, material and technology, labour, machinery, and equipment.
Supply of some materials or certain services may be incidental or consequential to
and part of such works. The term “Works” includes (i) civil works for roads, railways,
airports, shipping ports, bridges, buildings, irrigation systems, water supply,
sewerage facilities, dams, tunnels, and earthworks; and so on, and (ii) mechanical
and electrical works involving fabrication, installation, erection, repair, and
maintenance of a mechanical or electrical nature relating to machinery and plants.

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APPENDIX -III
FAQs ON PUBLIC PROCUREMENT POLICY FOR MSES ORDER, 2012

Question 1: What is the share of procurement from MSEs out of the total procurement made
by Central Government Ministries/ Departments/ Public Sector Undertakings?
Answer. Under amended Public Procurement Policy for MSEs, Order 2012 a minimum 25
per cent share out of the total annual procurement by Central Government Ministries /
Departments / Public Sector Undertakings are to be made from MSEs.

Question 2: Is there any reservation for MSEs owned by SC/ST/ Women entrepreneurs?
Answer. Yes, out of 25% target of annual procurement from MSEs (Not in the specific
tender), a sub target of 4% of annual procurement from MSEs is earmarked for procurement
from MSEs owned by Scheduled Caste (SC) / Scheduled Tribe (ST) entrepreneurs and 3%
of annual procurement from MSEs is earmarked for procurement from MSEs owned by
women entrepreneur. However, in event of failure of such MSEs to participate in tender
process or meet tender requirements and L1 price, 4% sub-target for procurement
earmarked for MSEs owned by SC/ST entrepreneurs and 3% earmarked to women
entrepreneur will also be met from other MSEs.

Question 3: Who is eligible for availing the benefits under the Public Procurement Policy?
Answer. As mentioned in Section 7(4) of Ministry of MSME's Notification No. S.O2119(E)
dated 26th June 2020, an enterprise registered with any other organization under the
Ministry of MSME shall register itself under Udyam Registration. With effect from 01.07.2020,
MSEs registered under Udyam Registration are eligible to avail the benefits under the Policy.
MSEs registered under Udyog Aadhaar Memorandum (UAM), validity of which is till
31.03.2022, are also eligible to avail the benefits under the Policy.

Question 4: What is the date of implementation of the policy?

Answer. The policy is applicable with effect from 1.4.2012 and became mandatory with
effect from 1.4.2015 onwards.

Question 5: Is the Policy transparent, competitive, and cost effective?

Answer. The Policy rests upon core principles of competitiveness, adhering to sound
procurement practices and execution of orders for supply of goods and services in
accordance with a system which is fair, equitable, transparent, competitive, and cost
effective.

Question 6: Is the policy implemented in parts or fully from its inception?

Answer. As per Gazette Notification (S.O. 5670(E) dated 8th November 2018, it is
mandatory for all Central Government Ministries / Departments/ CPSEs to procure at least
25% of their annual procurement from MSEs including 4% from MSEs owned by SC/ST
entrepreneur and 3% from MSEs owned by women entrepreneur.

Question 7: Is there any monitoring system for assessing the Government procurement from
MSEs?
Answer. To monitor the progress of procurement by Central Government Ministries/
Departments and CPSEs from MSEs, Ministry of MSME has launched the MSME Sambandh
Portal on 8th December 2017 for uploading procurement details by all CPSEs on a monthly
and an annual basis which is regularly monitored by the Ministry.

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Question 8: Is there a price matching facility for procurement from MSEs over large scale?
Answer.
(i) Price quotation in tenders: In tender, participating Micro and Small Enterprises, quoting
price within price band of L1+15 per cent shall also be allowed to supply a portion of
requirement by bringing down their price to L1 price in a situation where L1 price is from
someone other than a Micro and Small Enterprise and such MSE shall be allowed to
supply up to 25 per cent of total tender value.
(ii) In case of more than one such Micro and Small Enterprise, the supply shall be shared
proportionately (to tendered quantity).

Question 9: What steps are to be taken by the Central Government Ministries/ Departments/
CPSEs to develop MSE Vendors to achieve their targets for MSEs procurement?
Answer. The Central Government Ministries/ Departments/ Public Sector Undertakings shall
take necessary steps to develop appropriate vendors by organizing Vendor Development
Programmes (VDPs) or Buyer-Seller Meets focused on developing MSEs for procurement
through the GeM Portal. To develop vendors belonging to MSEs for Public Procurement
Policy, the Ministry of MSME is regularly organizing State Level VDPs and National Level
VDPs under the Procurement and Marketing Support Scheme.

Question 10: What steps are to be taken by the Central Government Ministries/
Departments/ CPSEs to develop vendors from MSEs owned by SC/ST/Women
entrepreneurs?
Answer. For enhancing the participation of MSEs owned by SCs / STs/ Women in
Government procurement, Central Government Ministries / Departments / CPSEs must take
the following steps:
i) Special Vendor Development Programmes/ Buyer-Seller Meets would be conducted by
Departments/ CPSEs for SC/STs and Women.
ii) Outreach programmes will be conducted by National Small Industries Corporation
(NSIC) to cover more and more MSEs from SC/STs under its schemes of consortia
formation; and iii. NSIC would open a special window for SCs/ STs under its Single Point
Registration Scheme (SPRS). iv. A National SC/ST hub scheme was launched in
October 2016, for providing handholding support to SC/ST entrepreneur which is being
coordinated / implemented by the NSIC under this Ministry.

Question 11: What are the other benefits /facilities available to the MSEs under the policy?
Answer. To reduce transaction cost of doing business, MSEs will be facilitated by providing
them tender sets free of cost, exempting MSEs from payment of earnest money deposit,
adopting e-procurement to bring in transparency in tender process. However, exemption
from paying of Performance Bank Guarantee is not covered under the policy. MSEs may
also be given relaxation in prior turnover and prior experience criteria during the tender
process.

Question 12: Is there any review mechanism for monitoring and reviewing of the policy?
Answer. A Review Committee has been constituted under the Chairmanship of Secretary,
Ministry of MSME for monitoring and reviewing of Public Procurement Policy for MSEs. M/O
MSME will review and/or modify the composition of the Committee as and when required.
This Committee will, inter alia, review the list of 358 items reserved for exclusive purchase
from MSEs on a continuous basis, consider requests from Central Government Departments,
CPSEs for exemption from 25% target on a case-to-case basis and monitor achievements
under the Policy.

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Question 13: What is the grievance redressal mechanism in case of non-compliance of the
Policy by any Government Department?
Answer. To redress the grievances of MSEs related to non-compliance of the Policy a
Grievance Cell named “CHAMPION Portal” has been set up in the Ministry of MSME.

Question 14: Whether there is any kind of purchase that has been kept out of the purview of
procurement under the Policy? If yes, how is the monitoring of the set goal done?
Answer. Given their unique nature, Defence armament imports will not be included in
computing 25% goal for M/o Defence. In addition, Defence Equipments like weapon
systems, missiles, etc. will remain out of purview of such policy of reservation. Monitoring of
goals set under the policy will be done, in so far as they relate to the Defence sector, by
Ministry of Defence itself in accordance with suitable procedures to be established by them.

Question 15: From where can the details of the Policy be obtained?
Answer. Policy details are available on the website of this office at www.dcmsme.gov.in.
Question 16: Is this policy mandatory under any Act?
Answer. Yes, the Policy is mandatory and notified under the MSMED Act, 2006.
Question 17: How many items are reserved for exclusive purchase from MSEs?
Answer. There are 358 items reserved for exclusive purchase from MSE Sector.

Question 18: Whether this policy is applicable for works/ trading activities also?
Answer. Policy is meant for procurement of only goods produced and services rendered by
MSEs. However, traders/ distributors/ sole agent/ Works Contract are excluded from the
purview of Public Procurement Policy for MSEs Order,2012.
Question 19: Whether the Policy is applicable for MSEs registered with NSIC?
Answer. The Policy is applicable for all MSEs registered under Udyam Registration and
Udyog Aadhar Memorandum (valid till 31.03.2022).

Question 20: Whether the Policy provides benefits for exemption from Security Deposit/
Performance Bank Guarantee to MSEs?
Answer. No, there is no exemption on Security Deposit/ Performance Bank Guarantee under
the Policy.
Question 21: Can MSEs quoting a price within the band L1+15% be given complete supply
to tender in case tender item cannot be split /divided?
Answer. In case of tender item cannot be split or divided, etc. the MSE quoting a price within
the band L1+15% may be awarded for full/ complete supply of total tendered value to MSE,
considering the spirit of the Policy for enhancing Govt. Procurement from MSEs.

Question 22: Which are the MSEs owned by SC/ST enterprises?

Answer. The definition of MSEs owned by SC/ ST is as given under:
(a) In case of proprietary MSE, proprietor(s) shall be SC /ST.
(b) In case of partnership MSE, the SC / ST partners shall be holding at least 51% shares in
the unit.
(c) In case of Private Limited Companies, at least 51% share shall be held by SC/ST
promoters.

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Question 23: Can the Central Government Ministries/ Departments/ CPSEs who have a
meagre value of total procurement be exempted from the Policy?
Answer. The Policy is applicable to all the Central Government Ministries / Departments /
CPSEs, irrespective of the volume and nature of procurement.

Question 24: Does the Policy have a provision for exemption from 25% procurement target?
Answer. The Review Committee may consider any request of Ministries / Departments /
CPSEs for exemption from the present 25% procurement targets on a case-to-case basis.
Question 25: Does laminated paper Gr. I, II and III fall under the paper conversion product
(Sl.No.202) and is a reserved item for exclusive procurement from MSEs?
Answer. As per Policy Circular No. 21(6)/2016-MA dt. 26th May 2016, it is clarified that only
paper bags, envelopes, ice-cream cups, paper cups and saucers and paper plates are
covered under the head "Paper Conversion products" at SI. No. 202 of the list of reserved
items under the Public Procurement Policy for MSEs Order-2012.Accordingly, the description
of SI. No. 202 as indicated in the English version of the Reserved List will be applicable.

Question 26: Are MSEs having Udyam Registration Certificate eligible for availing benefits
under the PP Policy?
Answer. Yes, Udyog Aadhar has been replaced with Udyam Registration Certificate w.e.f.
01.07.2020. Udyam Registered MSMEs can avail the benefits under the Public Procurement
Policy. The UAM will also remain valid till 31.03.2022.
Question 27: Does the Ministry give any certificate for MSEs having Udyam Registration?
Answer. The Erstwhile Udyog Aadhaar Memorandum (UAM valid till 31.03.2022) has been
replaced by Udyam Registration Certificate (w.e.f. 01.07.2020). As part of ease of doing
business, Udyam Registration Certificate (URC) has been introduced through a dedicated
portal on self-certification basis. An acknowledgement of URC is generated online instantly
which is accepted by all Central Government Ministries / Departments / CPSEs and State
Govts.

Question 28: Is the Public Procurement Policy applicable to State Governments/ State
Departments/ State PSEs?
Answer. The Public Procurement Policy for MSEs Order, 2012 is applicable to Central
Government Ministries/ Departments and CPSEs. This Policy is not applicable to State
Government Ministries/ Departments/ PSEs.
Question 29: Are the benefits of Public Procurement Policy applicable to MSEs who are not
registered for the tendered items?
Answer. The benefits of PPP should be given to all eligible MSEs irrespective of relevance
of product Category and as per Sl. No. 3 of FAQ.

Question 30: Can the relaxation of norms for start-ups and MSEs in Public Procurement
Policy in prior experience and prior turnover criteria be given to all MSEs?
Answer. It is clarified that all Central Government Ministries/ Departments/ Central Public
Sector Undertakings may relax conditions of prior turnover and prior experience with respect
to Micro and Annexure 32: FAQs About Public Procurement Policy for MSEs Order, 2012
Small Enterprises in all public procurement, subject to meeting of quality and technical
specifications (In exercise of Para 16 of Public Procurement Policy for Micro and Small
Enterprises, Order 2012). However, there may be circumstances (like procurement of items
related to public safety, health, critical security operations and equipment, etc.) where
procuring entity may prefer the vendor to have prior experience rather than giving orders to
new entities (O.M.No.F.20/2/2014PPD(Pt.) dated 20.09.2016 issued by DoE).

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Question 31: Has the Ministry clarified the sub target of procurement from SC/STs/Women
entrepreneurs under amended Public Procurement Policy for MSEs, Order 2012?
Answer. It is clarified that sub-targets of 4% (within 25% of annual procurement target) and
3% (within 25% of annual procurement target) have been earmarked for procurement from
MSEs owned by SC&ST and Women entrepreneurs, respectively under the amended Public
Procurement Policy for MSEs Order, 2012.

Question 32: Are Works Contracts a part of Services? What is the difference between Works
and Services?
Answer. Works Contracts are not covered under the purview of Public Procurement Policy
for MSEs. The definition is available in GFR Rules 130, 143, 177 & 197.
Question 33: Is there any provision to take action against the defaulting MSEs under the
Policy?
Answer. There is no such provision under the Policy. The procuring entity may take
appropriate action as per terms and conditions (T&C) of the tender documents and/or as per
GFR Rules.

Question 34: Are financial institutions/ autonomous bodies included in the PP Policy?
Answer. The Policy is applicable for all Central Government Ministries/ Departments and
CPSEs.
Question 35: Can the Ministry take action against the procuring agency for Delay in return of
the Security Deposit of the MSEs?
Answer. There is no such provision under the Policy. The matter can be referred to the
department concerned for taking appropriate action in the interest of the MSE complainant.
Question 36: Is it mandatory for MSEs to disclose their status as SC/ST/Women in Udyam
Registration Certificate (URC)?
Answer. Yes, it is mandatory to disclose the status as SC/ST/Women for in Udyam
Registration.
Question 37: Have the State Governments been asked to frame a Public Procurement
Policy for MSEs?
Answer. Yes, all the State Governments have been requested to frame the Public
Procurement Policy on similar lines.

Question 38: Have all the CPSEs been uploading their monthly and annual procurement
details, on MSME SAMBANDH Portal?
Answer. Most of the CPSEs are uploading their procurement details on the portal.
Question 39: Is there any provision to take action against the procuring agency for
noncompliance of PPP-MSE under the Policy?
Answer. No, there is no such provision in the Policy.
Question 40: What is the objective of the Policy?
Answer. The objective of the Policy is to promote Micro and Small Enterprises (MSEs) by
improving their market access and competitiveness through: - Increased participation in
Government purchase.
i) Encouraging relationship (including product development) between MSEs and Public
Sector Undertaking (PSEs).
ii) Increased share of supplies of MSEs to Central Government Ministries/ Departments and
CPSEs.
iii) Increased share of supplies of MSEs to Central Government Ministries/ Departments and
CPSEs.

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Question 41: What are the items or goods which can be procured from MSEs to achieve the
target of 25% from MSEs?
Answer. To achieve the target Government / CPSEs they can procure.
i) The items from the list of 358 items reserved for procurement from MSEs.
ii) Items which are being manufactured by MSEs, besides reserved items.

Question 42: How is the status of Enterprises as MSEs be verified?

Answer. The status of enterprises as MSEs can be verified through their Udyam Registration
Certificate or UAM certificate, which is valid till 31st March, 2022.As per notification No. S.O.
2119(E) dated
26.06.2020, in case of any discrepancy or complaint, the General Manager of the District
Industries Centre of the District concerned shall undertake an inquiry for verification of the
details of Udyam Registration/UAM submitted by the enterprise and thereafter forward the
matter with necessary remarks to the Director or Commissioner or Industry Secretary
concerned of the State Government who after issuing a notice to the enterprise and after
giving an opportunity to present its case and based on the findings, may amend the details or
recommend to the Ministry of MSME, Government of India, for cancellation of the Udyam
Registration Certificate/UAM.

Question 43: Can sub-contracting be considered under the procurement target from MSE?
Answer. Yes, if subcontract is given to MSEs, it will be considered as procurement from
MSEs. Question 44: If MSEs participate in tender but the procuring agency denies providing
benefits under the Policy, how can the problem be addressed?
Answer. The problem can be resolved through the Grievance Cell constituted to tackle such
situations and the matter may be referred to the procuring agency concerned to redress the
problem.

Question 45 What are the steps taken by the Ministry of MSME to promote marketing
through GeM portal for supply of Goods or rendering services from MSEs to Government
Departments and CPSEs?
Answer. CEO, GeM has been requested to make a provision in the GeM portal for
procurement of goods and services from MSEs through linking URC.
i). Udyam Registration Portal has a facility through which an entrepreneur can opt for
linking itself with Government e-market (GeM) place by selecting an option on Udyam
Portal. The enterprise will be linked to GeM portal and flow of information will start
between these two portals. With this facility, MSEs can link themselves with the
Government’s procurement system and can participate in Government’s mandatory
procurement programme from MSEs.
ii). All CPSEs have been requested to procure goods and services from MSEs, through
GeM portal only.
iii). The Ministry of MSME has signed an MOU with CEO, GeM, for mobilizing MSEs for
onboarding themselves on the GeM portal for supply of goods & services from MSEs.
iv). All UAM holders had been requested to register themselves on GeM portal for supply of
goods and services through GeM portal.

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Question 46: What is the difference between PPP-MII Order, 2017 and PPP-MSE Order,
2012?
Answer. The Public Procurement Policy for MSEs Order, 2012 is a delegated legislate
on deriving authority from the Act of Parliament. PPP-MII, Order, 2017 is an executive Order.

Question 47: Can Joint Ventures take the benefits of the Public Procurement Policy for
MSEs Order, 2012?
Answer. No, Under Udyam Registration (and earlier under UAM), there is no provision of
registration of Joint Ventures. As mentioned in S. No. 3 above, benefits of the Public
Procurement Policy for MSEs Order, 2012 can be availed by those MSEs which are
registered on the Udyam Registration portal.

Question 48: Can Consortiums with Foreign Company takes the benefits of the Public
Procurement Policy for MSEs Order, 2012?
Answer. No, Under Udyam Registration (and earlier under UAM), there is no provision of
registration of Consortium. As mentioned in S. No. 3 above, benefits of the Public
Procurement Policy for MSEs Order, 2012 can be availed by those MSEs which are
registered on the Udyam Registration portal.

Question 49: Can trader benefits from Public Procurement Policy, for MSEs Order, 2012?
Answer. No, as mentioned in O.M. No. 5/2(2)/2021-E/P & G/Policy dated 02.07.2021, Retail
and Wholesale traders can register on Udyam Registration Portal for the purpose of Priority
Sector Lending (PSL) only.

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APPENDIX -IV
FAQs ON PUBLIC PROCUREMENT (PREFERENCE TO MAKE IN INDIA) ORDER, 2017

Question 1. How to calculate Local Content?

Answer: Para 2 of the PPP-MII Order, 2017 (as amended on 16.09.2020) defines local
content as
Local content’ means the amount of value added in India which shall, unless otherwise
prescribed by the Nodal Ministry, be the total value of the item procured (excluding net
domestic indirect taxes) minus the value of imported content in the item (including all
customs duties) as a proportion of the total value, in percent. Mathematically,
Local content = (Sale price - Value of imported content) * 100/ Sale price
Where, “Sale price” means price excluding net domestic indirect taxes and “Value of
imported content” means price of imported content inclusive of all customs duties

Question 2. How to calculate Local Content in bids involving supply of multiple items from
single bidder?
Answer: In case of bids requiring supply of multiple items (say “X1”, “X2” and “X3”) by a single
bidder, the local content in the bid shall be
Local content = ((Sale price of “X1” - Value of imported content in “X1”) + (Sale price of “X2” -
Value of imported content in “X2”) + (Sale price of “X3” - Value of imported content in “X3”)) *
100/ (Sale price of “X1” + Sale price of “X2” + Sale price of “X3”)

Question 3. How to obtain Make in India “MII” certificate?

Answer: No such certificate issued by Government of India. As per para 9 (a) of PPP-MII
Order, 2017 (as amended on 16.09.2020), the bidders are required to self certify the local
content in their product for purchase value less than Rs.10 crore. For purchases more than
Rs.10 crore, as per para 9 (b) of PPP-MII Order, 2017, a certificate from the statutory auditor
or cost auditor of the company (in the case of companies) or from a practicing cost
accountant or practicing chartered accountant (in respect of suppliers other than companies)
is required to be submitted.

Question 4. What is the meaning of class-I local supplier, class-II local supplier and non-
local supplier?
Answer: PPP-MII Order, 2017 (as amended on 16.09.2020) classifies the suppliers into
following 3 categories:
a) ‘Class-I local supplier’ – Suppliers offering items with equal to or more than 50% local
content
b) ‘Class-II local supplier’ - Suppliers offering items with equal to or more than 20% but less
than 50% local content
c) Non-local supplier’ - Suppliers offering items with Less than 20% local content
d) Nodal Ministries/ Departments are authorized to notify a higher minimum local content
requirement for any item, i.e., higher than 50/20%, if they deem fit

Question 5. Details of product categories for which nodal Ministry have been notified by
DPIIT for PPPMII, Order 2017 may be provided?
Answer: DPIIT has notified 20 nodal Ministries for different product categories. The details of
such product categories and associated Ministry/ Department are available on DPIIT
website. Refer link:
https://dpiit.gov.in/sites/default/files/Approved%20product%20category%20list
%20as%20per%2012th%20SCM.pdf

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Question 6. Can an item be procured from non-local suppliers, if there are no Class-I/ Class-
II local suppliers in the country.
Answer: Non-local suppliers can only participate in global tender enquiry. Against domestic/
national tenders, only Class-I and Class-II local suppliers can participate in the bidding
process. Hence, in case item is not available locally from Class-I/ Class-II local suppliers,
global tender enquiry may be floated for procuring item after taking approval of competent
authority, as notified by Department of Expenditure under Rule 161(iv) of GFR.

Question 7. Are provisions of PPP-MII Order applicable only in procurement of the items for
which nodal Ministries have been notified and the items for which nodal ministries have
issued local content notification?
Answer: No. The provisions of PPP-MII Order are applicable on procurement of all the items
by Central Government procurement entities. For the items, for which nodal ministries have
not been designated Annexure 28: FAQs About PPP-MII Order, 2017 and the items for which
nodal ministries have not issued minimum local content notification, the default provision of
PPP- MII Order shall apply.

Question 8. Will the cost of transportation, insurance, installation, commissioning, training

and after sales service support like AMC/CMC etc. will be considered as a part of local
content?
Answer: The cost of transportation, insurance, installation, commissioning, training and after
sales service support like AMC/CMC etc. will not be taken into account for calculating local
content in any item. DPIIT OM No.P-45021/102/2019-BE-II- Part(1) (E-50310) dated
04.03.2021 refers, available on DPIIT Website. Refer link
https://dpiit.gov.in/sites/default/files/Letter%20to%20All%20Ministries030420
21_clarification.pdf

Question 9. Can administrative Ministries grant exemption/ relaxation for procurement of

imported items with the approval of Hon’ble Minister In-charge under Para 14 of PPP-MII
Order?
Answer: Procurement of imported item is governed by Rule 161 (iv) of GFR. Hon’ble
Minister In-charge of administrative Ministry is not the appropriate authority for any
exemption/waiver in GFR. As such, procuring entities are advised to follow the procedures as
prescribed in GFR Rule 161 (iv) for procurement of imported items. In this regard, minutes of
14th Standing Committee Meeting held on 20.09.2022 issued by DPIIT, refers. (Agenda point
Number 5.)

Question 10. Can administrative Ministry/Departments give exemption for wide range of
product categories for an extended period of time under Para 14 of PPP- MII Order with the
approval of Hon’ble Minister In- charge?
Answer: The administrative Ministries/ Departments shall grant only tender specific
exemptions under Para 14 of the Order. Exemptions granted shall remain valid for a period
of maximum 01 year only. If the same items are procured again within the aforesaid period of
01year, fresh approval of Minister-incharge is not required. If any administrative Ministry/
Department intends to grant exemption beyond a period of 01 year, it shall do so only with
prior written concurrence of concerned nodal Ministry. In this regard, minutes of 14th
Standing Committee Meeting held on 20.09.2022 issued by DPIIT, refers. (Agenda point
Number 5.)

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Question 11. How do I apply for DPIIT registration under Rule 144 (xi) GFR for entities
having beneficial ownership in land border sharing countries?
Answer: The application format for registration of bidders under Rule 144 (xi) GFR is
available on DPIIT website. Refer link: https://dpiit.gov.in/sites/default/files/Revised-Format-
Bidders-31March2021.pdf. Applicants are required to submit one hard copy in the prescribed
format along with soft copy (pdf), as detailed in the covering letter of the format. The
applicant shall be asked to submit additional hard copies, if required at the later stage.

Question 12. What will be the category of the local suppliers having exactly 20% and 50%
local content?
Answer: Vide its para 5, the Public Procurement (Preference to Make in India) Order, 2017
dated 16.09.2020 stipulates the minimum local content requirement as under:
“The ‘local content’ requirement to categorize a supplier as ‘Class-I local supplier’ is
minimum 50%. For ‘Class-II local supplier,’ the ‘local content’ requirement is minimum
20%. Nodal Ministry/Department may prescribe only a higher percentage of minimum
local content requirement to categorize a supplier as ‘Class-I local supplier’/’Class-II
local supplier.’ For the items, for which Nodal Ministry/Department has not prescribed
higher minimum local content notification under the Order, it shall be 50% and 20%
for ‘Class-I local supplier’/” Class-II local supplier’ respectively.”
Accordingly, the local suppliers having exactly 20% and 50% local content will be categorized
as "ClassII Local Supplier" and ‘Class-I Local Supplier’ respectively.

Question 13. Whether a Central Government/CPSE Buyer can take cognizance of open
undertakings/ futuristic declarations and treat bidder as Class I/ Class II local supplier
through the present level of local content of the bidder happens to be below 50%/ 20%
respectively?
Answer: Detailed Procedure for Verification of local content declared by suppliers
/vendors is elaborated on clause 9 of PPP-MII Order, 2017 dated 16.09.2020 and as per the
Order, futuristic declarations regarding local content is not allowed.

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APPENDIX -V
BASIC AIMS OF PROCUREMENT – THE FIVE R’S OF PROCUREMENT
In every procurement, public or private, the basic aim is to achieve just the right balance
between costs and requirements concerning the following five parameters called the Five
R’s of procurement. The entire process of procurement (from the time the need for an item,
facility or services is identified till the need is satisfied) is designed to achieve such a right
balance. The word ‘right’ is used in the sense of ‘optimal balance’.
i) Right Quality
Procurement aims to buy just the right quality that will suit the needs – no more and
no less with clear specification of the NMDC’s requirements, proper understanding of
functional value and cost, understanding of the bidder’s quality system and quality
awareness. The concept of the right balance of quality can be further refined to the
concept of utility/value. For the Right Quality, Technical Specification is the most
vital ingredient. In public procurement, it is essential to give due consideration to
Value for Money while benchmarking the specification.

ii) Right Quantity

There are extra costs and systemic overheads involved with both procuring a
requirement too frequently in small quantities or with buying large quantities for
prolonged use. Hence, the right quantity should be procured (in appropriate size of
contract) which balances extra costs associated with larger and smaller quantities.
iii) Right Price
It is not correct to aim at the cheapest materials/ facilities/ Services available. The
price should be just right for the quality, quantity and other factors involved (or should
not be abnormally low for a facilities/works/ services which could lead to a situation of
non performance or failure of contract). The concept of price can be refined further to
take into account not only the initial price paid for the requirement but also other
costs such as maintenance costs, operational costs and disposal costs.
iv) Right Time and Place
If the material (or facility or services) is needed by an organisation in three months’
time, it will be costly to procure it too late or too early. Similarly, if the vendor delivers
the materials/ facilities/ services in another city, extra time and money would be
involved in logistics. An unrealistic time schedule for completion of a facility may lead
to delays, claims and disputes.

v) Right Source
Similarly, the source of delivery of Goods, Works and Services of the requirement
must have just right financial capacity and technical capability for our needs
(demonstrated through satisfactory past performance of contracts of same or similar
nature). Buying a few packets of printer paper directly from a large manufacturer may
not be the right strategy. On the other hand, if our requirements are very large, buying
such requirements through dealers or middlemen may also not be right.

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APPENDIX -VI
FUNDAMENTAL PRINCIPLES OF PUBLIC PROCUREMENT
General Financial Rules, 2017 (Rule 144) lay down the Fundamental Principles of Public
Procurement. These principles and other additional obligations of procuring authorities in
public Procurement can be organised into five fundamental principles of public Procurement,
which all procuring authorities must abide by and be accountable for:

1) Transparency Principle:
All procuring authorities are responsible and accountable for ensuring transparency,
fairness, equality, competition, and appeal rights. This involves simultaneous, symmetric,
and unrestricted dissemination of information to all likely bidders, sufficient for them to
know and understand the availability of bidding opportunities and actual means,
processes and time limits prescribed for completion of registration of bidders, bidding,
evaluation, grievance redressal, award, and management of contracts. It implies that
such officers must ensure that there is consistency (absence of subjectivity), predictability
(absence of arbitrariness), clarity, openness (absence of secretiveness), and equal
opportunities (absence of discrimination) in processes. In essence, the Transparency
Principle also enjoins upon the Procuring Authorities to do only that which they professed
to do as pre-declared in the relevant published documents and not to do anything that
had not been so declared.’ As part of this principle, all procuring entities should ensure
that offers are invited following a fair and transparent procedure and ensure publication of
all relevant information on the Government e-Marketplace (GeM) and GeM-Central Public
Procurement Portal (CPPP).

2) Professionalism Principle:
i) As per these synergic attributes, the procuring authorities have a responsibility
and accountability to ensure professionalism, economy, efficiency,
effectiveness, and integrity in the procurement process. They must avoid
wasteful, dilatory, and improper practices violating the Code of Integrity for
Public Procurement (CIPP) mentioned in Chapter 3 of this Manual. They
should, at the same time, ensure that the methodology adopted for
Procurement is reasonable and appropriate for the cost and complexity and
that it effectively achieves the planned objective of the Procurement. As part of
this principle, the Government may prescribe professional standards and
specify suitable training and certification requirements for officials dealing with
procurement matters.

ii) In reference to the above two principles - Transparency and Professionalism

Principle, It may be useful to refer to the following provisions in the General
Financial Rules, 2017: General Financial Rules, 2017, Rule 144. Fundamental
principles of public buying (for all procurements, including Procurement of
works): Every authority delegated with the financial powers of procuring goods
in the public interest shall have the responsibility and accountability to bring
efficiency, economy, and transparency in matters relating to public
procurement and for fair and equitable treatment of suppliers and promotion of
competition in public procurement.

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iii) The procedure to be followed in making public Procurement must conform to

the following yardsticks (Rule 144 GFR, 2017): -
a) offers should be invited following a fair, transparent, and reasonable
procedure;
b) the procuring authority should be satisfied that the selected offer adequately
meets the requirement in all respects;
c) the procuring authority should satisfy itself that the price of the selected offer
is reasonable and consistent with the quality required;

3) Broader Obligations Principle:

i) Over and above transparency and professionalism, the procuring authorities

also have the responsibility and accountability to conduct public Procurement
in a manner that facilitates the achievement of the broader objectives, social
policies and programme objectives (for example, economic growth,
strengthening of local industry - make-in-India, Ease of Doing Business, job,
and employment creation, and so on) of the Government - to the extent these
are specifically included in the ‘Procurement Guidelines’. These policies are
detailed in para 1.11 below.

ii) To support social policies, reservation of Procurement of specified goods from

MSEs, weaker sections, backward regions, and reservation of Procurement of
certain goods from MSEs,

iii) To strengthen local industry and job/ employment creation, preferential

Procurement of locally manufactured goods or services (Rule 153 (iii) of GFR,
2017) and support to Startup enterprises (Rule 170(i), 173 (i) of GFR, 2017);

iv) To achieve programme objectives, reservation of Procurement of specified

class of goods from or through certain nominated CPSEs or Government
Organisations;

v) On the grounds of defence of India or matters directly or indirectly related

thereto, including national security, impose restrictions, including prior
registration and/ or screening, on Procurement from bidders from, or bidders
having commercial arrangements with an entity from, certain country or
countries, or a class of countries. Rule 144(xi) of GFR, 2017

vi) Facilitating broader objectives of other Departments of Government (for

example, ensuring tax or environmental compliance by participants, Energy
Conservation, accessibility for People with Disabilities, etc., Procurement
policies and procedures must comply with accessibility criteria that the
Government may mandate from time to time.

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4) Extended Legal Responsibilities Principle:

Procuring authorities must fulfil additional legal obligations in public Procurement, over
and above mere conformity to the mercantile laws (which even private sector
procurements must comply with). The Constitution of India has certain provisions
regarding fundamental rights and public Procurement. Courts have, over time, taken a
broader view of public Procurement as a function of the ‘State,’ interpreting these to
extend the responsibility and accountability of public procurement Authorities. Courts in
India thus exercise additional judicial review (beyond contractual issues) over public
Procurement in relation to the manner of decision-making with respect to fundamental
rights, fair play, and legality. Similarly, procuring authorities also have the responsibility
and accountability to comply with the laws relating to Governance Issues like the Right
to Information (RTI) Act and Prevention of Corruption Act, and so on. Details of such
extended legal obligations are given in Appendix 2.

5) Public Accountability Principle:

1) Procuring authorities are accountable for all the above principles to several
statutory and official bodies in the Country – the Legislature and its
Committees, Central Vigilance Commission, Comptroller and Auditor
General of India, Central Bureau of Investigations and so on– in addition to
administrative accountability. As a result, each individual public
procurement transaction is liable to be scrutinised independently and in
isolation, besides judging the overall outcomes of the procurement process
over a period. Procuring authorities thus have responsibility and
accountability for compliance with rules and procedures in each individual
procurement transaction, as well as the achievement of overall procurement
outcomes.

2) The procuring authority, at each stage of Procurement, must, therefore,

place on record, in precise terms, the considerations that weighed with it
while making the procurement decision from need assessment to fulfilment
of need (Rule 144 (viii), GFR 2017).

3) Such records must be preserved, retained in easily retrievable form, and

made available to such oversight agencies on demand. The procuring entity
shall, therefore, maintain and retain audit trails, records and documents
generated or received during its procurement proceedings in chronological
order (refer to para 7.7.6 below). The files shall be stored in an identified
place and retrievable for scrutiny whenever needed without wasting time.

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APPENDIX -VII
STANDARDS (CANONS) OF FINANCIAL PROPRIETY

Public Procurement, like any other expenditure in Government, must conform to the
Standards (also called Canons) of Financial Propriety. It may be useful to refer to the
relevant provisions in the General Financial Rules, 2017:
Rule 21. Standards of Financial Propriety: Every officer incurring or authorising expenditure
from public moneys should be guided by high standards of financial propriety. Every officer
should also enforce financial order and strict economy and see that all relevant financial rules
and regulations are observed, by his own office and by subordinate disbursing officers.
Among the principles on which emphasis is generally laid are the following: -

i) Every officer is expected to exercise the same vigilance in respect of expenditure incurred
from public moneys as a person of ordinary prudence would exercise in respect of
expenditure of his own money. ii) The expenditure should not be prima facie more than
the occasion demands.
iii) No authority should exercise its powers of sanctioning expenditure to pass an order
which will be directly or indirectly to its own advantage.
iv) Expenditure from public moneys should not be incurred for the benefit of a particular
person or a section of the people, unless -
a) a claim for the amount could be enforced in a Court of Law, or
b) the expenditure is in pursuance of a recognised policy or custom.

APPENDIX -VIII

REFINED CONCEPTS OF COST AND VALUE – VALUE FOR MONEY

The concept of price or cost has been further refined into Total Cost Of Ownership (TCO) or
Life Cycle Cost (LCC) or Whole-of-Life (WOL) to take into account not only the initial
acquisition cost but also cost of operation, maintenance and disposal during the lifetime of
the external resource procured.

Similarly, the concept of quality is linked to the need and is refined into the concept of utility/
value. These two, taken together, are used to develop the concept of Value for Money (VfM,
also called Best Value for Money in certain contexts).

VfM means the effective, efficient, and economic use of resources, which may involve the
evaluation of relevant costs and benefits, along with an assessment of risks, non-price
attributes (e.g. in goods and/or services that contain recyclable content, are recyclable,
minimize waste and greenhouse gas emissions, conserve energy and water and minimize
habitat destruction and environmental degradation, are non-toxic etc.) and/or life cycle costs,
as appropriate.

Price alone may not necessarily represent VfM. In public procurement, VfM is achieved by
attracting the widest competition by way of optimal description of need; development of
value-engineered specifications/ Terms of Reference (ToR); appropriate packaging/ slicing of
requirement; selection of an appropriate mode of procurement and bidding system. These
advanced concepts are explained in Appendix 1.

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APPENDIX -IX SAP T- CODES

PURCHASE REQUISITION
1 ME51N Create Purchase Requisition
2 ME52N Change Purchase Requisition
3 ME53N Display Purchase Requisition
4 ME54N Release Purchase Requisition
5 ME5A List of Purchase Requisition
6 ZMM026 Purchase Requisition Print
7 MMBE Stocks Overview
8 MB5B Stocks For Posting Date
9 MB51 Material doc. List - Consumption
10 MB52 List of ware house stocks on hand - Inventory
PURCHASE ORDER
1 ME21N Create PO
2 ME22N Change PO
3 ME23N Display PO
4 ME29N Release PO
5 ME2S Services Per PO
6 ME2M PO's by Material
7 ME2N PO's by PO Number
8 ME9F/ME23N PO Print
9 ME2L PO’s by Supplier
SERVICE ENTRY SHEET/GR/GI
1 ML81N Create Service Entry Sheet
2 MIGO Goods Receipt/ Goods Issue
3 ML85 Collective Release 0f Entry Sheets
4 ZMM023 GRR Print
5 ZMM036 Issue Voucher Print
QUALITY INSPECTION
1 QA32 Change data for inspection lot
2 QA03 Display Inspection Lot
3 ZQM013 Concerned HODs worklist for GRN assignment
4 ZQM014 Quality Inspector worklist for UD

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RESERVATION
1 MB21 Crate Reservation
2 MB22 Change Reservation
3 MB23 Display Reservation
4 MB25 Reservation List
5 ZMM037 Reservation Dash Board/Issue Voucher Print
6 ZMM072 Reservation print
CONTRACT
1 ME31K Create Contract
2 ME32K Change Contract
3 ME33K Display Contract
4 ME35K Release Contract
5 ME3M Outline agreements by material
6 ME3N Outline agreements by agreement no.
7 ME3L Outline agreements per supplier
GATE ENTRY
1 ZMM016 Gate Pass Request Creation
2 ZMM018 Gate Pass Request Approval
3 ZMM017 Gate Pass Creation
4 ZMM019 Gate Pass Approval
5 ZMM050 Gate Pass Report
EMD /BG ENTRY
1 FTRTBG01 EMD/BG Master Creation
2 FTRTBG02 EMD/BG Master Change
3 FTRTBG03 EMD/BG Master Display
4 FTRTBG04 EMD/BG Master Settlement
5 FTRTBG06 EMD/BG Master Termination
6 FTRTBG09 EMD/BG Master Roll-Over
7 ZFI0011 EMD/BG Master Report
MISC.
1 ZMM002 Purchase Register
2 ZMM015 Material List
3 ZMM031 Scrap Process – Non Moving

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4 ZMM048 PO upload
5 ZMM052 Billing Schedule Upload
6 ZMM058 ARS Critical items Report
7 ZMM059 PR uploading
8 ZMM061 Discrepancy Register
9 ZMM069 Vendor Master
10 ZMM075 List of Pending PRs
11 ZMM076 List of Pending POs
12 MM03 Display Material
13 ZGE Gate Entry
14 MMSC Storage Location Maintenance
15 ME2DP Down Payment
SRM
1 ZMM047 PR transfer to SRM
2 ZMM066 Report for PR transfer to SRM

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APPENDIX -X

ABBREVIATIONS

S.NO ABBREVIATION DESCRIPTION

1 AMC ANNUAL MAINTENANCE CONTRACT

2 AMR ADDITION/MODIFICATION/REPLACEMENT
3 ARS AUTOMATIC REPLENISHMENT SYSTEM
4 BB BAILADILA-BACH ELI
5 BG BANK GUARANTEE
6 BK BAILADILA- KIRANDUL
7 C/A COMPETENT AUTHORITY
8 CIF COST-INSURANCE-FRIEGHT
9 CPRI CENTRAL POWER RESEARCH INSTITUTE
10 CCS COMMERCIAL COMPARATIVE STATEMENT
11 CST COMPARATIVE STATEMENT
12 CVC CHIEF VIGILANCE COMMISSION
13 CWS CENTRAL WORKSHOP
14 DDO DIRECT DEALING OFFICER
15 DGMS DIRECTORATE GENERAL OF MINES SAFETY
16 DNM DONIMALAI
17 DoE DEPARTMENT OF EXPENDITURE
18 EOI EXPRESSION OF INTEREST
19 EMD EARNEST MONEY DEPOSIT
20 ERP ENTERPRISE RESOURCE PLANNING
21 FIFO FIRST IN FIRST OUT
22 FOB FREE ON BOARD
23 FOR FREE ON RAIL/ROAD
24 GM GENERAL MANAGER
25 GoI GOVERNMENT OF INDIA
26 GOVT GOVERNMENT
27 GRN GOODS RECEIPT NOTE
28 GT GLOBAL TENDER
29 GTE GLOBAL TENDER ENQUIRY
30 HEM HEAVY EARTH MOVING
31 HO HEAD OFFICE
32 HoD HEAD OF THE DEPARTMENT
33 IV ISSUE VOUCHER
34 JO JUNIOR OFFICER
35 LOI LETTER OF INTENT
36 LPR LAST PURCHASE RATE

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37 LR LORRY RECEIPT
38 LT LIMITED TENDER
39 LTE LIMITED TENDER ENQUIRY
40 MARC MAINTENANCE AND REPAIR CONTRACT
41 MC MATERIAL CONTROL
42 MM MATERIALS MANAGEMENT
43 MoF MINISTRY OF FINANCE
44 MRP MATERIAL REQUIREMENT PLAN
45 NIT NOTICE INVITING TENDER
46 NEFT NATIONAL ELECTRONIC FUNDS TRANSFER
47 OEM ORIGINAL EQUIPMENT MANUFACTURER
48 OT OPEN TENDER
49 OTE OPEN TENDER ENQUIRY
50 OTR OFF THE ROAD
51 PO PURCHASE ORDER
52 PBG PERFORMANCE BANK GUARANTEE
53 PCS PRICE COMPARATIVE STATEMENT
54 PDI PRE-DISPATCH INSPECTION
55 PG PERFORMANCE GUARANTY
56 POL PETROL-OIL-LUBRICANTS
57 PR PURCHASE REQUISITION
58 PROJ PROJECT
59 PSU PUBLIC SECTOR UNDERTAKING
60 PVC PRICE VARIATION CLAUSE
61 R&D RESEARCH & DEVELOPMENT
62 RC RATE / RUNNING CONTRACT
63 REF REFERENCE
64 REGD REGISTERED
65 RO REGIONAL OFFICE
66 RTGS REAL TIME GROSS SETELLEMENT
67 RV RECEIPT VOUCHER
68 SD SECURITY DEPOSIT
69 SRS STORE RECEIPT SERIAL
70 ST SINGLE TENDER
71 STE SINGLE TENDER ENQUIIRY
72 TCS TECHNICAL COMPARATIVE STATEMENT
73 TSC TENDER SCRUTINY COMMITTEE
74 VDC VENDOR DEVELOPMENT CELL
75 VRC VENDOR REGISTRATION COMMITTEE

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NOTES

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