Draft Manual On Policies and Procedures For Procurement in Egovernance

DRAFT MANUAL ON POLICIES AND
PROCEDURES FOR PROCUREMENT IN

EGOVERNANCE
2016
Ministry of Electronics & Information Technology (DeitY)

Government of India
6, CGO Complex, Delhi
Manual on Policies and Procedures for Procurement in eGovernance
List of Abbreviations
A&M Approach & Methodology
A/T Acceptance of Tender
AMC Annual Maintenance Contract
ATS Annual Technical Support
BG Bank Guarantee
CCN Change Control Notes
CD Custom Duty
COTS Commercially Off The Shelf
CPO Central Purchase Organization
CPSU Central Public Sector Undertaking
CSC Common Service Centre
CVC Central Vigilance Commission
DD Demand Draft
DeitY Department of Electronics and Information Technology
DP Delivery Period
DR Disaster Recovery
ED Excise Duty
EMD Earnest Money Deposit
EMS Enterprise Management System
EOI Expression of Interest
FM Force Majeure
GFR General Financial Rules
GIS Geographical Information System
GoI Government of India
ICT Information and Communication Technology
INR Indian National Rupee
IP/IA Implementation Partner
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IT Information Technology
LC Letter of Credit
LD Liquidated Damages
LoA Letter of Award
LoI Letter of Intent
MIS Management Information System
MSDG Mobile Service Delivery Gateway
NeGP National eGovernance Plan
NSDG National Services Delivery Gateway
O&M Operations and Maintenance
OEM Original Equipment Manufacturer
PBG Performance Bank Guarantee
PO Purchase Order
PSU Public Sector Undertaking
QCBS Quality Cum Cost Based Selection
RC Rate Contract
RFP Request for Proposal
SDC State Data Centre
SI System Integrator
SLA Service Level Agreement
SO Supply Order
SOA Service Oriented Architecture
SOW Scope of Work
SSDG State Service delivery Gateway
ST Sales Tax
STI Single Tender Inquiry
SWAN State Wide Area Network
ToR Terms of Reference
TPC Tender Purchase Committee
UAT User Acceptance Test
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VAT Value Added Tax
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The purpose of this Manual is to define the Government of India’s broad policies and procedures for
selection, contracting and monitoring of eGovernance Suppliers (i.e. Implementation Agency, Contractor,
Hardware supplier, Software developer, Data Entry Service provider etc.) and other services providers
financed from Govt. of India’s resources. Projects funded partially or in whole by loan/grant from
International organizations like International Bank for Reconstruction and Development (IBRD),
International Development Association (IDA) or grant from the Bank or trust funds would normally be
governed by guidelines agreed to in the respective loan/credit agreement with them.
This manual is supplemented by Model RFP, Guidance Notes and draft contract (available at
http://deity.gov.in/content/rfp-standardization-model-rfps-and-guidance-notes) which comply with the
provision of this manual and which should be used and customised in conjunction with the provisions of
this manual.
…………..
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Table of Contents
1 PREAMBLE ...........................................................................................................................................10
1.1 Introduction ..................................................................................................................................10
1.2 Aim....................................................................................................................................................10
1.3 Scope ................................................................................................................................................10
1.4 Present Manual............................................................................................................................11
1.5 Guidelines for eGovernment Procurement .......................................................................11
1.6 Best Practices for IT Procurement: ......................................................................................12
1.7 Terminology and Abbreviations ............................................................................................14
2 EGOVERNANCE ARCHITECTURE, STANDARDS & SPECIFICATIONs ...................16

2.1 Basic Guidelines .........................................................................................................................16
2.2 Essential Technical Particulars ............................................................................................16
2.3 eGovernment requirement and architecture ...................................................................17
2.4 Incorporation of eGov standards and Policies ................................................................18
3 MODES OF PURCHASE, RECEIPT AND OPENING OF TENDERS .............................28

3.1 General .............................................................................................................................................28
3.2 Approval of the competent authority to the purchase ..........................................................28
3.3 Purchase of eGovernance Goods without Quotation ............................................................28
3.4 Purchase of eGovernance Goods by Purchase Committee .................................................28
3.5 Purchase of Rate Contracted eGovernance Goods ...............................................................29
3.6 Purchase of eGovernance Goods financed by International Agencies ............................29
3.7 Purchase of eGovernance Goods by obtaining Tenders .....................................................29
3.8 Open Tender...................................................................................................................................30
3.9 Text of Tender Notice ...................................................................................................................30
3.10 Cost of Tender Documents .........................................................................................................31
3.11 Sale of Tender Documents ..........................................................................................................31
3.12 Limited Tender Enquiry (LTI) ....................................................................................................32
3.13 Pre-bid Conference ........................................................................................................................33
3.14 Format of Tender ..........................................................................................................................33
3.15 Sealing and Marking of Tenders ...............................................................................................33
3.16 Extension of Tender Opening Date..........................................................................................34
3.17 Amendments / Modifications to Tenders ..............................................................................34
3.18 Receipt and Custody of Tenders ...............................................................................................34
3.19 Late Tender.....................................................................................................................................35
3.20 Single Stage and Two Stage Bidding ........................................................................................35
3.21 Opening of Tenders ......................................................................................................................36
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3.22 Responsibility of the Tender Opening Officials....................................................................37

3.23 Single Tender Enquiry (STI) .......................................................................................................37
4 EARNEST MONEY AND PERFORMANCE SECURITY ......................................................39

4.1 Earnest Money Deposit (EMD) ..............................................................................................39
4.2 Forfeiture of EMD .......................................................................................................................39
4.3 Refund of EMD ............................................................................................................................39
4.4 Performance Security ................................................................................................................40
4.5 Forfeiture of Performance Security ......................................................................................40
4.6 Refund of Performance Security ...........................................................................................40
4.7 Verification of the Bank Guarantees ..................................................................................40
4.8 Safe Custody of EMDs, Performance Securities & Other Instruments ................40
5 DEFINING PRE-QUALIFICATION AND TECHNICAL EVALUATION CRITERION 42

5.1 Expression of Interest ...............................................................................................................42
5.2 Pre-Qualification .........................................................................................................................42
5.3 Designing Pre-Qualification (PQ) / Eligibility Criteria .................................................42
5.4 Designing Technical Evaluation Criteria...........................................................................45
6 KEY CONTRACTUAL TERMS & CONDITIONS ....................................................................47

6.1 Extension of Delivery Period ..................................................................................................47
6.2 Performance Notice ....................................................................................................................47
6.3 Insurance .......................................................................................................................................47
6.4 Warrantee ......................................................................................................................................48
6.5 Intellectual Property Rights ....................................................................................................48
6.6 Limitation of Liability ................................................................................................................51
6.7 Resale of Bandwidth ..................................................................................................................51
6.8 Integrity Pact ................................................................................................................................52
6.9 Remedies to Purchaser for delay in Supply / Non-Supply ........................................53
6.10 Liquidated Damages ..................................................................................................................54
6.11 Service Level Agreement...........................................................................................................54
6.12 Force Majeure ...............................................................................................................................55
6.13 Conflict of Interest ......................................................................................................................56
6.14 Cancellation of Contract for Default ...................................................................................58
6.15 Termination of Contract for insolvency .............................................................................59
6.16 Termination of Contract for Convenience .........................................................................59
7 ELEMENTS OF PRICE AND TERMS OF PAYMENT ..........................................................61

7.1 Introduction ..................................................................................................................................61
7.2 Currency .........................................................................................................................................61
7.3 Firm Price vis-à-vis Variable Price ............................................................................................62
7.4 Duties and Taxes on Domestic Goods .....................................................................................64
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7.5 Octroi and Local Taxes ................................................................................................................65

7.6 Advance Payment to Supplier....................................................................................................65
7.7 Documents for Payment.............................................................................................................66
7.8 Modes of Payment ........................................................................................................................66
7.9 Deduction of Income Tax, Service Tax etc.at Source from Payments to Suppliers........67
8 FINAL TESTING AND CERTIFICATION ..................................................................................68

8.1 Introduction ..................................................................................................................................68
8.2 Final testing and certification ................................................................................................68
9 EVALUATION OF TENDERS AND PLACEMENT OF CONTRACT................................70

9.1 Introduction ..................................................................................................................................70
9.2 Designing Technical Evaluation ................................................................................................70
9.3 Technical Evaluation Models and Methods ...........................................................................70
9.4 Preliminary Examination............................................................................................................77
9.5 Qualification Criteria ..................................................................................................................79
9.6 Conversion of Currencies ...........................................................................................................80
9.7 Evaluation and Ranking .............................................................................................................80
9.8 Award of Contract .........................................................................................................................81
9.9 Publication of Tender Result .....................................................................................................81
9.10 Return of EMD to Unsuccessful Tenderers ............................................................................81
9.11 Tenderer’s Right to question Purchaser ..................................................................................81
9.12 Extension of Tender Validity Period .......................................................................................82
10 CONTRACT MANAGEMENT..........................................................................................................83
10.1 Introduction ..................................................................................................................................83
10.2 Text of Contract ...........................................................................................................................83
10.3 Performance Security ................................................................................................................83
10.4 Acknowledgement of Contract...............................................................................................83
10.5 Coordination .................................................................................................................................83
10.6 Amendment to Contract...........................................................................................................84
10.7 Payment to the Implementation Agency ............................................................................84
10.8 Monitoring of Securities and other Instruments ...........................................................84
10.9 Closure of Purchase File ..........................................................................................................84
11 CHANGE REQUESTS .......................................................................................................................86

11.1 Change Requests ........................................................................................................................86
11.2 What constitutes a Change request : .................................................................................87
11.3 Institutional structure proposed to implement the Change Control ...............................87
11.4 Procedure to affecting the Change Request............................................................................88
12 SETTLEMENT OF DISPUTES ......................................................................................................90

12.1 General............................................................................................................................................90
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12.2 Mode of Settlement .......................................................................................................................90

12.3 Venue of Arbitration ....................................................................................................................94
12.4 Applicable Law .............................................................................................................................94
12.5 Legal Advice ...................................................................................................................................95
13 RATE CONTRACT..............................................................................................................................96
13.1 Definition........................................................................................................................................96
13.2 Merits of Rate Contract ................................................................................................................96
13.3 Rate Contracts concluded by Central Purchase Organisation ............................................97
13.4 Goods/Services for which Rate Contracts are carried out by CPO..................................97
13.5 Bringing more and more common user items on the Rate Contract .................................98
13.6 Period of Rate Contract ................................................................................................................98
13.7 Criteria for award of Rate Contract ..........................................................................................98
13.8 Special Conditions applicable for Rate Contract ...................................................................99
13.9 Parallel Rate Contracts ..............................................................................................................100
13.10 Conclusion of Rate Contracts including Parallel Rate Contracts ................................100
13.11 Price Negotiation/Counter-Offer........................................................................................100
13.12 Cartel Formation / Pool Rates .............................................................................................101
13.13 Fall Clause .................................................................................................................................101
13.14 Implementation of fall clause ..........................................................................................102
13.15 Performance Security ............................................................................................................102
13.16 Renewal of Rate Contracts....................................................................................................102
13.17 Placement of Supply Orders................................................................................................103
14 STRATEGIC EMPANELMENT OF OEMs ...............................................................................104
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1 PREAMBLE
1.1 Introduction
Every Ministry / Department spends a sizeable amount of its budget for procuring
eGovernance systems and services like Implementation agency, System Integrator,
Hardware, Software, Data entry services, AMC services to implement eGovernance
projects. It is imperative that these procurements are made following a uniform,
systematic, efficient and cost effective procedure, in accordance with the relevant rules
and regulations of the Government. The Ministries / Departments have been delegated
powers to make their own arrangements for procurement of goods and services under
the Delegation of Financial Power Rules, which have to be exercised in conformity with
the orders and guidelines issued by competent authorities coverings financial,
vigilance, security, safety, counter-trade and other regulatory aspects.
While there are manuals prescribed by various other Ministries/Departments, this

manual specifically addresses the nuances of procurement related to
eGovernance/Information Technology so as to streamline the procurement processes
and thereafter contract management. Without purporting to be a comprehensive
compendium of all statutory provisions, rules, regulations, orders and guidelines on the
subject of public procurement, this Manual is intended to provide guidance to the
procurer in the field of eGovernance / Information Technology to enable him to take an
educated decision during the procurement processes.
1.2 Aim
The objective of this procurement manual is to standardize the procurement procedure for e-
Governance Projects in terms of Scope, Requirement, Bidding, Contract Management, SLA’s,
Payments etc in order to optimally utilise the allocated budgetary resources. While achieving
the same, the manual will also ensure the highest degree of probity and public accountability,
transparency in operations, free competition and impartiality. In addition, the manual will also
help in realizing the objectives of ambitious “Digital India Program”of Government of India.
1.3 Scope
The Manual on Policies and Procedures for Procurement in eGovernance will cover all e-
Governance / IT Procurement undertaken by all Ministries / Department of Government of
India both from indigenous sources and ex-import. States & UT Governments /PSU may, ,
continue to follow their own procedures for procurement as long as they are in-sync with the
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broader objectives of Transparency, impartiality and free competition supported by this

manual.
1.4 Present Manual
This Manual has been drafted on the basis of General Financial Rules (2005), Manual on Policies
and Procedures for Purchase of Goods (2006) and Manual of Policies and Procedure of
Employment of Consultants (2006), prepared by Department of Expenditure, Ministry of
Finance, Government of India.
This procurement manual should be read in conjunction with Model RFP Guidelines and
templates prepared by DeitY for procurement of System Integrators, PPP, and Consulting
Agencies. These guidelines are available at
http://deity.gov.in/content/rfp-standardization-model-rfps-and-guidance-notes
This manual contains guidelines and directives concerning purchase of eGovernance

Products and services with public funds as well as some allied areas such as AMC, Data
Entry, Training, Change management etc. Relevant aspects of purchase management
techniques have been incorporated in proper sequence under separate chapters. The
text incorporated in each chapter has been highlighted with appropriate sub-heads.
This arrangement will help the users to readily locate the desired subjects/sub-subjects.
1.5 Guidelines for eGovernment Procurement
At the apex of the legal framework governing eGovernment procurement is Article 299
of the Constitution, which stipulates that contracts legally binding on the Government
have to be executed in writing by officers specifically authorized to do so. Further, the
Indian Contract Act, 1872 and the Sale of Goods Act, 1930 are major legislations
governing contracts of sale/ purchase of goods in general. There is no existing law
exclusively governing public procurement of goods. However, comprehensive rules
and directives in this regard are available in the General Financial Rules (GFR), 2005,
especially chapter 6; Delegation of Financial Powers Rules (DFPR); and the guidelines
issued by the Central Vigilance Commission to increase transparency and objectivity in
public procurement. These provide the regulatory framework for the public
procurement system.
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1.6 Best Practices for IT Procurement:
This manual aims to ensure Transparency, Competition, Fairness and Elimination of

Arbitrariness in eGovernance procurement.. The following are some important
measures to achieve the same and, thus, secure best value for money:
(a) The text of the tender document should be user-friendly, self- contained,
comprehensive, unambiguous, and relevant to the objective of the
purchase. The use of terminology used in common parlance in the industry
should be preferred. The specifications of the required e-Governance
System should be framed giving sufficient details in such a manner that it is
neither too elaborately restrictive as to deter potential tenderers or increase
the cost of purchase nor too sketchy to leave scope for sub-standard supply.
The specifications must meet the essential requirements of the user
department. Efforts should also be made to use standard specifications,
which are widely known to the industry (A template of draft Scope of work
is provided in Section 2.7 of Guidance Notes of Model RFP templates for
Implementation Agencies http://deity.gov.in/content/rfp-
standardization-model-rfps-and-guidance-notes).
(b) The tender document should clearly mention the eligibility criteria to be
met by the tenderers such as minimum level of experience, past
performance, technical capability, solution proposed, certifications,
resources proposed etc. (refer Section 2.4 and 2.5 of Guidance Notes and
Section 2.6 of Model RFP templates for Implementation Agencies
http://deity.gov.in/content/rfp-standardization-model-rfps-and-
guidance-notes).
(c) Restrictions on who is qualified to tender should conform to extant

Government policies and be judiciously chosen so as not to stifle
competition amongst potential tenderers.
(d) The procedure for preparing and submitting the tenders; deadline for
submission of tenders; date, time & place of public opening of tenders;
requirement of earnest money and performance security; parameters for
determining responsiveness of tenders; evaluating of tenders and criteria
for acceptance of tender and conclusion of contract should be incorporated
in the tender in clear terms.
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(e) Tenders should be evaluated in terms of the criteria already incorporated in

the tender document, based on which tenders have been received. Any new
condition, which was not incorporated in the tender document, should not
be brought into consideration while evaluating the tenders.
(f) Sufficient time should be allowed to the tenderers to prepare and submit
their tenders.
(g) Suitable provisions should be kept in the tender document allowing the
tenderers reasonable opportunity to question the specifications
proposed, tender conditions, tendering process, and/or rejection of its
tender and the settlement of disputes, if any, emanating from the resultant
contract.
(h) It should be made clear in the tender document that tenderers are not
ordinarily be permitted to alter or modify their tenders after expiry of the
deadline for receipt of tender till the date of validity of tenders and if they
do so, their earnest money will be forfeited.
(i) Negotiations with the tenderers must be severely discouraged. However, in

exceptional circumstances, where price negotiations are considered
unavoidable, the same may be resorted to, but only with the lowest
evaluated responsive tenderer, and that too with the approval of the
competent authority, after duly recording the reasons for such action.
(j) The name of the successful tenderer to whom the supply contract is
awarded should be appropriately notified by the purchase organization for
the information through various channels but specifically on website and
also should be communicated to all the bidders on email.
(k) The time frame for submission of Expression of Interest (EOI) document
submission is a minimum of 15 days. The timelines for submission of a bid
is a minimum of 21 days1 and can be extended depending on the
complexity of the bids and the number of OEMs the tenderer may have to
reach out to put together the entire bid. The conclusion of contract should
1 For Global Tenders, this time period is 28 days
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ordinarily be within the original validity of the tenders unless explicitly

stated in the original bid. Adequate time should be budgeted for the
procurement process for the replacement of the Implementation Agency
(IA). For complex services, the Department should budget in for overlap in
the time for the incumbent IA and new IA so that there is adequate
Knowledge Transfer. Extension of tender validity must be discouraged and
resorted to only in absolutely unavoidable, exceptional circumstances with
the approval of the competent authority after duly recording the reasons for
such extension.
(l) The Central Purchase Organizations of GoI (i.e. DGS&D or any other new
created by any Department of GoI) have published a rate contract system
wherein more and more common user items, which are frequently needed
in bulk by various Ministries / Departments are listed.
This Manual is intended to serve this objective.
1.7 Terminology and Abbreviations
1.7.1 Standard terminology has been adopted in this Manual. In certain areas, there
may be two or more widely used terminologies bearing the same meaning as
mentioned below:
i) Tender, Bid, Quotation. (Meaning: offer received from a supplier)
ii) Tenderer, Bidder. (Meaning: an entity who seeks to supply eGovernance

Goods by sending tender/bid)
iii) Tender Enquiry Document, Tender Document, Bidding Document.

(Meaning: a detailed document issued by the purchaser specifying his
needs and the requirements that a potential tenderer/bidder must meet).
iv) Notice Inviting Tenders, Invitation for Bids (Meaning: advertisement

containing brief details of the requirement).
v) Earnest Money Deposit, Bid Security. (Meaning: monetary guarantee

furnished by a tenderer along with its tender) Security Deposit,
Performance Security. [Meaning: monetary guarantee furnished by
the successful tenderer for due performance of the contract concluded
with it.]
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vi) Security Deposit, Performance Security. [Meaning: monetary guarantee

furnished by the successful tenderer for due performance of the contract
concluded with it.]
vii) Nodal Agency, Purchaser, Procurer, Department, Customer. (Meaning :

The Purchaser which is responsible for executing the project and assists
the Department in carrying out the tendering. In case the Government
department itself decides to carry out the tendering and execute the
project, then the term “Purchaser” and the “Department” are the same.
viii) Department. (Meaning: The ultimate “owner” of the project. The

eGovernance is carried out within the domain of the department).
ix) Implementation Agency, System Integrator, Contractor, Supplier

(Meaning : The successful bidder which has signed the contract with the
Purchaser for the supply of IT products and services posting winning the
tender)
x) eGov Goods/ eGovernance Goods (Meaning : All goods and services

covered under the domain of eGovernance which includes Hardware,
Software, Networking, Data entry services, change management, training
etc.)
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2 EGOVERNANCE ARCHITECTURE, STANDARDS & SPECIFICATIONs
2.1 Basic Guidelines
The important aspects to be kept in view while formulating the specifications and other
technical particulars of eGovernment Procurement are indicated in the following
paragraphs.
The specifications of the eGovernment Procurement shall meet only the actual and
essential needs of the user because “over-specification” will unnecessarily increase the
cost and may stifle competition. Specifications should aim at procuring the latest
technology (generally N-1 version, i.e. one version older than the latest as it is a “value
for money” product) and avoid procurement of obsolete eGovernance goods and
services. Specifications should have emphasis on factors like processing speed, memory,
security, scalability, reliability, efficiency, interoperability, performance, availability,
ease of implementation, low maintenance cost etc. Further, the specifications should not
be too restrictive as the aim should be to attract reasonable number of competitive
tenderers. The specifications should also take care of the mandatory and statutory
regulations, if any, applicable for the eGovernance Goods to be purchased.
2.2 Essential Technical Particulars
Technical particulars to be specified in the tender document shall include the following
to the extent applicable for a particular purchase:
i) Scope of supply including quantity required and, also, end use of the required
eGovernance Goods.
ii) Specifications, technical parameters and product requirements expressing a

detailed tabular functional and non –functional requirements.
iii) Technical Architecture Drawings.
iv) Requirements of acceptability criterion, if any.
v) Requirement of type approval for compliance of statutory requirements w.r.t.

security
vi) Training, technical support, after sales service and annual maintenance contract
requirements, if any.
vii) Warranty requirements.
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viii) Any other aspects peculiar to the eGovernance Goods in question like shelf life of
the equipment etc.
The technical and legal particulars have been provided in Model RFP templates for
Implementation Agencies http://deity.gov.in/content/rfp-standardization-model-
rfps-and-guidance-notes)
2.3 eGovernment requirement and architecture
To realize its full benefit, an eGovernment procurement system has to be interoperable

with multiple external systems (such as those of legacy application, certification
authorities, etc.) and internal back-office systems (such as those of the treasury). The
exchange of information between the eGovernment procured system and the external
systems during different phases of procurement should be seamless. Technical
considerations related to eGovernment procurement include information security,
interoperability, reliability, scalability, and availability.
Apart from ensuring reliability, it is also recommended that governments establish

mechanisms to handle potential system disruptions by applying business continuity
planning (BCP) and disaster recovery (DRs). Key system components of eGovernment
procurement should be included in any risk management strategy include content
management, access control management, workflow management, and system
integration. The information issues of authentication, authorization, confidentiality,
integrity, and non-repudiation also need to be addressed within the risk management
framework, along with virus protection and other security threats.
Additional technical requirements to be considered include use of single sign-on (SSO)

capability so that users log on once and are able to access all appropriate services in
eGovernment Procurement based on authorizations created for them in the system, use
of server certificates supporting secure communication over an encrypted Secure
Sockets Layer (SSL) session, and extensive audit trail facilities implemented for every
electronic procurement and administration activity performed through the system.
By applying a service-oriented architecture (SOA) paradigm to the design of core

components, eGovernment Procurement system implementers can ensure a significant
improvement in system flexibility, while leveraging the benefits of reuse at the same
time. Online help can be offered, providing assistance at any time to users performing
activities in the system through means such as in-context sensitive help, user manuals,
wizards, walkthroughs, and online demonstrations.
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The eGovernment Procurement system should also include performance measures to

assist with administration, establish maintenance criteria, and generate performance
standards.
An illustrative technology architecture which provided linkages to the various

artifacts/infrastructure created for eGovernance in India is presented below. The same
should be leveraged.
The cloud services (as being drafted by DeitY, GoI) can also be used for SaaS (Software
as a service), PaaS (Platform as a service) and IaaS (Infrastructure as a service) to
suitably replace the components of the above technical architecture.
2.4 Incorporation of eGov standards and Policies
A standard is defined as a technical specification, recommended practices or guidelines

available to the public, drawn up with the cooperation and consensus or general
approval of all interests affected by it, based on the consolidated results of science,
technology and experience, aimed at the promotion of optimum community benefits
and approved by a body recognized at the national, regional or international level.
eGovernance standards prescribe set of rules, conditions or requirements that play an
important role in building the architecture of eGovernance.
The essential requirements of interoperability, security, usability and reduction in cost

can only achieved through standardization and use of standards. The table below
provides a brief description of the eGovernance standards approved by Department of
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Electronics and IT (DeitY) and also provides mentions their relevance and usage in
RFPs for various eGovernance projects.
Mandatory/
# Standard Description Target stakeholders
Recommended
1 Standards and This standard aims at providing  Security Recommended
Specifications for guidelines for all central and state Architects standard
e-Pramaan: ministries, departments and  Technical
Framework for e- government agencies towards Consultants
Authentication adopting an appropriate  Application
authentication model for online Developers
and mobile based delivery of
public services. It describes broad
level specifications for
developing the e-Pramaan
authentication system. It
elucidates the rationale, use cases
and process flows to be used for
detailed design. It also elucidates
the standards that will be used to
develop the components, APIs as
well as the protocols for the
framework.
2 Biometric The Indian Government  All eGovernance Specifications
Standards encourages use of biometric data projects of the mentioned under
for identification and verification Central and these standards are
of individuals in eGovernance State mandatory for all
applications. The biometric data Government or eGovernance projects
includes fingerprint image, any other in India, using any of
minutiae, face image and iris organization these Biometric
data. which need to technologies.
comply with this However, its best
Face Image Data Standards: standard for the practices are
This standard includes capture purpose of recommended for all
and storage specifications of face interoperability such projects.
images for human visual  All Integrators/
inspection and verification of the Service
individuals in Indian providers for
EGovernance applications. A Indian
possible future use of these eGovernance
images for computer based face applications.
recognition is kept in view
during the capture and storage. It Face Image
specifies a format to store face Standards:
image data within a biometric  eGovernance
data record compliant to the projects rolled
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Mandatory/
Recommended
Common Biometric Exchange out by Central
Formats Framework (CBEFF), and State
given in ISO 19785-1. It also Governments or
includes best practices any other
recommended for organization
implementation of the using face
specifications in different images or face
categories of eGovernance photographs.
applications.  organization
using face
This biometric Standards would images or face
be applicable to all eGovernance photographs.
applications in India as per the  Photographers,
Government’s Policy on Open who capture
Standards. facial images for
eGovernance
Fingerprint Image Data applications.
Standards  All
eGovernment applications using Integrators/Bio
fingerprinting technology deal metric Service
with fingerprint data at multiple providers.
stages. It is possible that different
fingerprint capturing devices and
software (compression Fingerprint Image
algorithms and matching Data Standards
algorithms) are used at different
stages. The purpose of this  Vendors of
standard is to ensure fingerprint
interoperability among various devices or
fingerprint sensors and software
algorithms by which the developers for
fingerprint images are captured/ conversion of
stored by standardizing the images to
specifications for fingerprint different
devices, fingerprint image,  Standard
storage/transmission and formats, quality
minutiae. evaluation
software,
Iris Image Data Standards minutiae
This standard ensures extraction and
interoperability among the matching
eGovernance applications algorithms etc.
requiring iris recognition, by
standardizing iris specifications
including the storage and Iris Image Data
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Mandatory/
Recommended
transmission formats. It specifies Standards
Iris image data specifications,  All those
acquisition, storage and eGovernance
transmission formats. It also projects where
includes best practices for identity
implementation of the Standard management is
specifications in different an important
categories of eGovernance issue e.g., cyber
applications, based on the security,
volume of data and verification/ defence, counter
accuracy requirements. Thus, to terrorism etc.
allow the application developer  Vendors of Iris
maximum flexibility in usage of image
algorithms and devices from acquisition
different vendors and to address devices or
interoperability requirements, the software
iris image must be captured and developers for
stored as per standard conversion of
specifications. images as per
the Standardised
format
Iris Image Data Standards  All those

This standard ensures eGovernance
interoperability among the projects where
eGovernance applications identity
requiring iris recognition, by management is
standardizing iris specifications an important
including the storage and issue e.g., cyber
transmission formats. It specifies security,
Iris image data specifications, defence, counter
acquisition, storage and terrorism etc.
transmission formats. It also  Vendors of Iris
includes best practices for image
implementation of the Standard acquisition
specifications in different devices or
categories of eGovernance software
applications, based on the developers for
volume of data and verification/ conversion of
accuracy requirements. Thus, to images as per
allow the application developer the Standardised
maximum flexibility in usage of format
algorithms and devices from
different vendors and to address
interoperability requirements, the
21
Mandatory/
Recommended
iris image must be captured and
stored as per standard
specifications.
3 Digital The eGovernance standard for  E-record Use of Digital
Preservation Preservation Information producers and Preservation Standard
Standard: Documentation (eGOV-PID) of data managers is a mandatory for all
eGovernance electronic records provides  Departmental eGov projects.
Standards for standard metadata dictionary Record Officers
Preservation and schema for describing an (DROs) record
Information electronic record. The e-records keepers,
Documentation have to be preserved in such way archivists and
of e-Records that it should be possible to find, preservation
(Metadata & read, represent, render and officers
Schema) interpret them accurately as  All stakeholders
original along with all the in central and
associated information necessary state
for its comprehension in distant government, as
future. Most of the preservation well as public
information (metadata) can be and private
automatically captured using this organizations
schema after the final e-record is involved in
created, as most of the required execution,
information is already present in design,
an eGovernment system. Such development
preservation information and
documentation is necessary only implementation
for those e-records that need to of eGovernance
be retained for long durations applications.
(e.g. 10 years, 25 years, 50 years  Central, state,
and beyond) and the e-records district level
that need to be preserved archiving
permanently. The organizations
implementation of this standard
helps in producing a valid input
i.e. Submission Information
Package (SIP) for archival and
preservation purpose.
4 Localisation & Character Encoding Standard  eGovernment This is a mandatory
Language Character Encoding standard Services standard to be
Technology aims at facilitating global data providers in all followed by
Standard interchange in all constitutionally Constitutionally eGovernance service
recognized Indian languages and recognized providers.
addresses specific areas of Indian
Localisation issues. Languages
Fonts Standard
22
Mandatory/
Recommended
Fonts standard aims at providing
a single International Standard to
comply with UNICODE data
storage. This ensures data
portability across various
applications and platforms. It
mandates use of ISO/IEC 14496-
OFF (Open Font Format) font
standard for all 22
constitutionally recognized
languages.
It resolves the issues faced when
mutually incompatible
proprietary fonts of different
standards are used in
Government Offices, causing
serious problems in information
exchange amongst offices.
5 Metadata and The objective of Metadata and  All stake holders This Standard would
Data standards Data standards is to define in Central and be mandatorily
standards to enable semantic State Govt., as applicable to all
interoperability and management well as Public eGovernance
of data. These Standards provide and Private applications in India
a way for information resources  Organizations, as per the
in electronic form to involved in Government’s Policy
communicate their existence and execution, on Open Standards.
their nature to other electronic design,
applications (e.g. via HTML or development
XML) or search tools and to and
permit exchange of information implementation
between applications. Their of eGovernance
adoption will enable easier, applications.
efficient exchange and processing  Administrative
of data. It will also remove Governance
ambiguities and inconsistencies providers
in the use of data.  Development
schemes
Providers
 Welfare Scheme
Providers
 Disaster
Management
Groups etc.
6 Quality The purpose of the eGovernance  Policy makers  Each project
23
Mandatory/
Recommended
Assurance Quality Assurance Framework is  Administrators mandatorily
Framework to provide assurance that work  Implementing required to clear
(QAF) products (solutions) and agencies the essential QG
processes comply with  Project regardless of scope
predefined provisions and plans. managers or duration.
It outlines a standard for use by  Private sector
senior administrators, project contractors  Desirable QGs can
management personnel, external  Consultants. be incorporated
consultants and vendors  into project
involved in eGovernance planning based on
implementation. It indicates the complexity, risk
general operational principles and resource
and technical aspects that a availability.
quality assurance exercise should
incorporate when customized to
the requirements of a specific
eGovernance project. The QAF is
linked to the project lifecycle and
integrates quality assurance
requirements for all the necessary
phases that a project goes
through. The three principal
objectives of quality assurance in
eGovernance are:
 Ensuring system (in terms of
processes, products and
services) requirements are
defined (Definition)
 Ensuring the system
conforms to requirements
(Verification)
 Ensuring user satisfaction
with the system, once it goes
‘live’ (Validation)
The 3 objectives of quality
assurance in an eGovernance
project lifecycle can be achieved
through the identification and
application of Quality Gates (QG)
at various phases of the
project. Each QG consists of a set
of quality baselines relevant to
that project phase and is aligned
with relevant IS/ ISO standards.
QGS are categorized into
24
Mandatory/
Recommended
essential and desirable.
The essential QGs relate to four
key areas:
 Quality Processes in the
Organisation (Gate 1)
 Software Quality (Gate 2)
 Information Security (Gate 3)
 IT Service Quality (Gate 4)
Desirable QGs relate to such
aspects as project documentation,
use of recognised standards and
architectures, risk management,
business continuity planning etc.
The QAF will help in developing
and maintaining sound
relationship between private and
public partners in case of
Public‐Private‐Partnerships
(PPP). It is also expected to
facilitate greater clarity and
granularity in RFP and contract
conditions as QAF provisions are
based on internationally
recognised standards.
7 Conformity Conformity Assessment provides  RFP Writers  CARE is a
Assessment an indicator of the degree of  Solution mandatory
Requirement compliance of the solution to its providers/ standard to be
(CARE) for requirements. For the purpose of vendors followed in all
eGovernance eGovernance, Conformity eGovernance
applications assessment includes activities like projects.
sampling and testing; inspection,
review, certification,
management system assessment
and registration etc. CARE
outlines an approach to achieve
the objectives of Quality
Assurance through:
a. mapping the solution
architecture of an
eGovernance system with
CARE
b. identifying the Component
of Interest in the architecture,
c. applying a relevant Quality
25
Mandatory/
Recommended
Gate to the “Component of
Interest” and finally
d. assessing conformity of
“Component of Interest” to
the quality standards
comprising that Quality
Gate.
The entire process of identifying
Components of Interest and
applying Quality gates is termed
as Conformity Assessment.
The “Component of Interest” is
any module of the architecture of
an eGovernance system that is
intended to undergo a
conformity assessment exercise.
These modules are defined in the
eGovernance Architecture
consisting of the user layer,
technology layer and
organization layer. The level of
assurance required on a
particular module is based on the
needs of the organization.
A Quality Gate (QG) is a
supporting set of processes which
enables controls and assurance to
achieve the desired level of
confidence. The Quality Gates
should be identified in the RFP/
contract document by the project
leader and may be used for
objective evaluation to ensure
that the “Components of
Interest” are capable of achieving
predefined goals.
8 Technical The purpose of these standards is  Project Teams of  It is a mandatory
Standards for to provide a framework for the eGovernance standard for all
Interoperability selection of Standards to facilitate applications in eGovernance
Framework for interoperability between systems all Departments projects.
eGovernance developed by multiple agencies. at Central /
(IFEG) It provides organizations the State
flexibility to select different Government
hardware and software for level
implementing cost-effective  Contractual
26
Mandatory/
Recommended
eGovernance solutions. It, Policy framing
therefore, promotes technology agencies for
choice, and avoids vendor lock- development of
in. In Interoperability Framework eGovernance
for eGovernance (IFEG), the Applications
'Areas' for eGovernance  All integrators /
applications have been service
categorized under 7 broad providers for
domains: Indian
 Presentation and eGovernance
Archival Applications
 Process
 Data Integration
 Meta-data
 Data Interchange
 Network Access and
Application
 Security
The Technical standards for IFEG
in India describes technical
standards to be adopted for
eGovernance application under
each of the domain covered
under IFEG, as per the Policy on
Open standards of eGovernance.
The above standards (as applicable for the IT Products & Services being procured)
should be incorporated as a part of the tender document. Any exception to the above
should be recorded in writing.
27
3 MODES OF PURCHASE, RECEIPT AND OPENING OF TENDERS
3.1 General
Depending on the nature of the required eGovernance Goods, the quantity & value
involved and the period of supply, the purchase organization is to decide the
appropriate mode of purchase. The various modes of purchase to be adopted for this
purpose are indicated in the subsequent paragraphs.
3.2 Approval of the competent authority to the purchase
Demand for eGovernance Goods should not be divided into smaller quantities for
making piece meal purchases for the sole purpose of avoiding the necessity of obtaining
the sanction of higher authority required with reference to the estimated value of the
total demand.
3.3 Purchase of eGovernance Goods without Quotation
Purchase of eGovernance Goods upto a value of Rs 15,0002/- (Rs Fifteen Thousand

only) on each occasion may be made without inviting quotations/bids by the
competent authority on the basis of a certificate to be recorded by him in the following
format:
"I, am personally satisfied that these IT goods and/or product and/or services
purchased are of the requisite quality and specification and have been purchased from a
reliable supplier at a reasonable price."
3.4 Purchase of eGovernance Goods by Purchase Committee
Purchase of eGovernance goods costing above Rs. 15,000/- (Rs. Fifteen Thousand only)
and upto3 Rs. 1,00,000/- (Rs. One lakh only) on each occasion may be made on the
recommendations of a duly constituted Local Purchase Committee consisting of three
members of an appropriate level as decided by the Head of Department. The
committee will survey the market to ascertain the reasonableness of rate, quality
and specifications and identify the appropriate supplier. Before recommending
2 DoE(MoF) is considering revision of this range
28
placement of the 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 eGovernance 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 eGovernance goods in question."
3.5 Purchase of Rate Contracted eGovernance Goods
The Central Purchase Organization will conclude rate contracts with the suppliers, for
eGovernance Goods and items of standards types which are identified as common user
items and are needed on recurring basis by various Ministries / Departments. The
Central Purchase Organization are expected to post the specifications, prices and other
salient details of different rate contracted items, appropriately updated, on its web site
for use by the procuring Ministries/Departments. The Ministries/Departments are to
operate those rate contracts to the maximum extent possible. The Ministry /
Department shall make its own arrangement for inspection and testing of such
eGovernance Goods where required.
The limits mentioned in Section 3.3 and 3.4 does not apply for Purchase of Rate
Contracted EGovernance Goods as these rates have been discovered through a Open
Tender process.
3.6 Purchase of eGovernance Goods financed by International Agencies
The Articles of Agreement with the International Agencies, like the World Bank, Asian
Development Bank etc. stipulate specific procurement procedures to be followed by the
borrowers. The procurement procedures, as finalized and incorporated in the
Agreements after consideration and approval of the Ministry of Finance are to be
followed accordingly.
3.7 Purchase of eGovernance Goods by obtaining Tenders
Except for the purchase of eGovernance goods through the methods given in the
preceding paragraphs, Ministries/ Departments shall procure eGovernance Goods
within their delegated powers by following the standard method of obtaining tenders
as follows:
(i) Open Tender
(ii) Limited Tender Enquiry (LTI)
29
(iii) Single Tender Enquiry (STI)
3.8 Open Tender
Subject to exceptions incorporated for Limited Tender Enquiry and Single Tender
Enquiry below, invitation to tenders by advertisement should be used for procurement
of eGovernance goods of estimated value of Rs. 25 lakhs (Rupees Twenty Five Lakhs
only)3 and above.
Advertisement (in the form of a Tender Notice) relating to Open Tender should be
given in at least in one national daily having wide circulation and one in local
newspaper. Further, an organization having its own web site is also to publish all its
tender notices (relating to Open Tenders) on its own web site and provide a link with
NIC web site. Additionally, for wider publicity, all Ministries / Departments should
also publish their tender notices in the web site of Central Purchase Organization (e.g
eProcurement through Central Procurement Portal at http://eprocure.gov.in/cppp/).
Where the Ministry / Department feels that the eGovernance Goods of the required
quality, specifications etc., may not be available in the country and/or it is also
necessary to look for suitable competitive offers from abroad, the Ministry/ Department
may send copies of the tender notice to the Indian Embassies abroad as well as to the
Foreign Embassies in India requesting them to give wide publicity of the requirement in
those countries. They may also be requested to put the tender notice in their web sites.
The selection of the embassies will depend on the possibility of availability of the
required eGovernance goods in such countries. Publicizing the requirement globally as
above is also known as Global Tender Enquiry.
3.9 Text of Tender Notice
The tender notice for an Open tender should be carefully drafted. It should contain all
the salient features of the requirement in brief to give a clear idea to the prospective
tenderers about the requirements. Superfluous or irrelevant details should not be
incorporated in the tender notice, as it will increase the cost of the advertisement.
The Tender Notice should at least contain:
3 DoE(MoF) is considering revision of this limit
30
 Brief about the project
 Last date of submission of RFP
 How to get copy of RFP document
 Contact person name and contact details
The detailed information should be available in the Fact sheet of the RFP and should
contain at the minimum:
 Method of selection
 Cost of the tender/bidding document
 Amount & Form of Bid Security / Earnest Money Deposit
 Period and terms of delivery
 Place(s) and timing of sale of tender documents
 Place and deadline for receipt of tenders
 Any other important information
3.10 Cost of Tender Documents
Price of the tender document should take care of the preparation and delivering cost
only. If it is too high, it will discourage the prospective bidders to purchase the
document and participate in the bidding process.
3.11 Sale of Tender Documents
The organization should also post the complete tender document in the web site and
permit prospective tenderers to make use of the document downloaded from the web
site. If the tender document is a priced one, there should be clear instructions for the
tenderers in the document (which has been downloaded) to pay the amount by demand
draft etc. along with the tender, prepared in the downloaded document. In case the
tender documents are not put on the website (for e.g. when the RFP is to be sold against
signing of a Non-Disclosure Agreement (NDA) by the prospective bidder), then the
Tender documents should be sold at least upto one day prior to date of opening of
tenders and the same should be clearly indicated in the documents.
31
Under normal circumstances (i.e. cases where signing of NDA is not required) the sale
of tender documents should not be restricted and should be available on its website.
The purchase organization shall maintain proper records about the number of tender
documents sold, list of parties to whom sold, details of the amount received through
sale and, also, the number of unsold tender documents, which are to be cancelled after
the opening of the tenders. The RFP documents uploaded on CPP portal also provides
the name of the parties who downloaded the tender which can be used for
communication pertaining to the tender processes.
3.12 Limited Tender Enquiry (LTI)
This method may be adopted when estimated value of the eGovernance goods to be
procured is up to Rs. 25 lakhs4. Copies of the bidding document should be sent, free of
cost, directly by speed post/registered post/courier/e-mail, simultaneously to all
the firms, which are borne on the list of a relevant empanelment. The number of
supplier firms in LTI should be more than three. Purchase through LTI may be
adopted even when the estimated value of the procurement is more than Rs. 25 lakh5, in
the following circumstances:
(a) The competent authority in the Ministry / Department certifies that the demand
is urgent and any additional expenditure involved by not procuring through
Open Tender is justified in view of urgency. The Ministry / Department should
also put on record the nature of the urgency and reasons why the procurement
could not be anticipated earlier.
(b) When the empanelment has been carried out by an Open Tender processes
(c) There are sufficient reasons, to be recorded in writing by the competent

authority, indicating that it will not be in public interest to procure the
eGovernance goods through advertised tender enquiry.
(d) The sources of supply are definitely known and possibility of fresh source(s)
beyond those being tapped is remote.
32
(e) Nature of items to be procured is such that pre-verification of competence of

firm is essential, hence requires registration of firms. Sufficient time should be
allowed for submission of bids in Limited Tender Enquiry cases.
3.13 Pre-bid Conference
In case of turn-key contract or contract of special nature for purchase of sophisticated

and costly equipment, a suitable provision is to be kept in the tender enquiry document
for a pre-bid conference for clarifying issues and clearing doubts, if any, about the
specification and other allied technical details projected in the tender enquiry
document. The date, time and place of pre-bid conference should be indicated in the
tender enquiry document for information of the interested tenderers. This date should
be sufficiently ahead of tender opening date. In case the pre-bid conference results in an
issuance of a corrigendum/amendment/modification, appropriate extension of the bid
submission date should be provided to the bidders.
3.14 Format of Tender
The tenderers are to furnish their quotations as per the prescribed format and also as
per the instructions incorporated in the tender documents. Quotations sent by email or
facsimile are to be ignored and rejected.
3.15 Sealing and Marking of Tenders
DeitY encourages the tendering processes by leveraging etendering infrastructure for

having an objective, open, transparent and compliant bidding processes. All
Departments are encouraged to use the Central Public Procurement Portal (at
http://eprocure.gov.in/cppp/) for carrying out the etendering processes.
However in case, the department is using the physical copies for submission of the
tender document, then
a) the tender document is to indicate the total number of tender sets (e.g., in
duplicate or in triplicate etc) required to be submitted.
b) The tenderer is to seal the original and each copy of the tender in separate
envelopes, duly marking the same as “original”, “duplicate” and so on and also
putting the address of the purchase office and the tender reference number on
the envelopes.
c) Further, the sentence ‘’NOT TO BE OPENED” before (due date & time of tender
opening) are also to be put on these envelopes. The inner envelopes are then to
33
be put in a bigger outer envelope, which will also be duly sealed marked etc. as
above. If the outer envelope is not sealed and marked properly as above, the
purchaser will not assume any responsibility for its misplacement, premature
opening, late opening etc.
All the above instructions are to be suitably incorporated in the tender documents.
3.16 Extension of Tender Opening Date
Sometimes, situations may arise necessitating modification of the tender documents

already issued (LTI case) or already put on sale (Open Tender case). Also, after
receiving the documents, a tenderer may point out some genuine mistakes necessitating
amendment in the tender documents. In such situations, it is necessary to
amend/modify the tender documents suitably prior to the date of submission of bids.
Copies of such amendment / modification should be simultaneously sent to all the
selected suppliers by publishing on the website where the tender document was
originally hosted/ registered/speed post/courier/e-mail or a combination thereof.
When the amendment/modification changes the requirement significantly and /or

when there is not much time left for the tenderers to respond to such amendments, and
prepare revised tender, the time and date of submission of tenders are also to be
extended suitably, along with suitable changes in the corresponding time-frames for
receipt of tender, tender validity period etc and validity period of the corresponding
EMD/bid security. Depending on the situation, such an amendment may also need
fresh publication adopting the same procedure as for publication of the original tender
enquiry.
3.17 Amendments / Modifications to Tenders
The tenderer, after submitting its tender, is permitted to submit

alterations/modifications to its tender so long such alterations/modifications are
received duly sealed and marked like original tender, upto the date & time of receipt of
tender. Any amendment/modification received after the prescribed date & time of
receipt of tenders are not to be considered.
3.18 Receipt and Custody of Tenders
Receipt and custody of tenders shall be done in a transparent manner. This issue is well
addressed for tender received on the eTendering platform wherein the digital
signatures are to be used for the opening of the bid.
34
However for the Tenders are to be received physically though tender box and, in its
absence, by hand delivery to the nominated officials of the purchase department. The
information about these officials should also be displayed at the entrance / reception of
the premises where tenders are to be deposited. The officer receiving a tender is to give
the bearer of the tender a receipt duly signed by him with date and time of receipt of the
tender. A separate register is to be maintained for keeping records of the bids, received
by hand. Such bids will be kept in safe custody with the head of the office or his
authorized representative till the date & time of bid opening and then such bids will be
handed over to the bid opening.
Sometimes, tenders are also received by post. Such tenders shall be received and
documented in identical manner as applicable for tenders received through hand
delivery.
3.19 Late Tender
In the case of Open Tender or limited tender enquiry, late tenders (i.e., tenders received
after the specified date and time for receipt of tenders) should not be considered.
3.20 Single Stage and Two Stage Bidding
For tender which involve simple procurement of a product a single stage bidding is to
be followed. In this process, the tender contains the response and the price in one single
envelope. The tender is to be awarded to the lowest bidder which meets all the bidding
requirements
For procurement of complex products & services, normally a two stage bidding is to be
followed. The first part is to contain the relevant technical specifications and allied
commercial details (without the price quotation) as required in terms of the tender
enquiry documents and the second part should contain only the price quotation. The
first part is commonly known as ‘Technical Bid’ and the second part ‘Financial Bid’.
The technical bid and the financial bid should be sealed by the tenderer in separate
covers duly super scribed and both these sealed covers are to be put in a bigger cover
which should also be sealed and duly super scribed. The technical bids are to be opened
in the first instance, at the prescribed time & date and the same will be scrutinized and
evaluated by the competent committee/authority with reference to parameters
prescribed in the tender documents and the offers received from the tenderers.
Thereafter, in the second stage, the financial bids of only the technically acceptable
offers (as decided in the first stage above) are to be opened for further scrutiny,
evaluation, ranking and placement of contract.
35
3.21 Opening of Tenders
All the tenders received on time shall be opened in the presence of authorized
representatives of the tenderers (who have submitted regular tenders) at the prescribed
time, date and place. The authorized representatives, who intend to attend the tender
opening, are to bring with them letters of authority from the corresponding tenderers.
Tenders should be opened immediately after the deadline of receipt of tenders with
minimum time gap in between. At least two duly authorized officials of the purchase
department should jointly open the tenders.
The tender opening officials are to announce the salient features of the tenders against
the checklist, which may include separate sealed envelopes for Pre-qualification,
Technical Bid, and Commercial bid, EMD and Bid purchase costs, validity period for
EMD and any other special feature of the tender for the information of the
representatives attending the tender opening.
The opening of the bid should be as per the process laid down in the tender document.
In case of a two stage bid, the envelopes containing the prequalification, EMD and Bid
costs should be opened. The other envelopes containing the technical bid and
commercial bid should be identified for each bidder and kept with the officials in safe
custody till the results of pre-qualification are announced. After opening of envelope
containing the pre-qualification document, every tender shall be numbered serially,
initialed, and dated on the first page by all the officials authorized to open the tenders.
Each page of the pre-qualification shall also be initialed by them with date. Prima facie
gaps (if any), found against the pre-qualification checklist will be noted by the officials
at this stage.
The original, duplicate, triplicate copies in a tender set are to be marked accordingly by
the tender opening officials.
Alterations in tenders, if any, made by the tenderers, shall be initialed with date & time
by the officials opening the tenders to make it perfectly clear that such alterations were
present on the tenders at the time of opening. Wherever any erasing or cutting is
observed, the substituted words should also be encircled and initialed with date & time
to make clear that such erasing/cutting of the original entry was present on the tender
at the time of opening.
The above process is to be followed in the same manner for opening of Technical bid
and Commercial bid in subsequent stages for a two stage three envelop bids.
36
3.22 Responsibility of the Tender Opening Officials
In addition to what has been mentioned above, the tender opening officials will prepare
a list of the representatives attending the tender opening and obtain their signatures on
the same. The list will also contain the representatives’ names and the corresponding
tenderers’ names & addresses. The authority letters brought by the representatives will
be attached with this list. This list will be signed by both the tender opening officials
with date & time.
An on-the-spot report containing the names of the tenderers (serial number wise)
salient features of the tenders, as read out during public opening of tenders will be
prepared by the tender opening officers duly signed by them with date & time.
The tenders, which have been opened, the list of the representatives attending the
tender opening and the on-the spot report are to be handed over to the nominated
purchase officer and acknowledgement obtained for the same.
3.23 Single Tender Enquiry (STI)
Obtaining quotation by issuing single tender enquiry to a selected source amounts to

purchase without generating competition. Therefore this mode of purchase should be
resorted to only in unavoidable situations. Purchase through STI may be adopted when:
i) It is in the knowledge of the user department that only a particular firm is the
manufacturer of the required eGovernance goods. The reason for arriving to
this conclusion is to be recorded and approval of the competent authority
obtained.
ii) In a case of emergency, the required eGovernance goods are necessarily to be

purchased from a particular source subject to the reason for such decision being
recorded and approval of the competent authority obtained.
iii) For standardization with an existing solution across the organization or buying
consumables of an existing product which had been bought through a
competitive processes (on the advice of a competent technical expert and
approved by the competent authority), the required eGovernance goods are to
be purchased only from a selected firm.
Note: Proprietary Article Certificate in the following form is to be provided by the Ministry /
Department before procuring the eGovernance goods from a single source under the provision of
sub-para (i) & (iii) above as applicable:
37
1 The indented eGovernance goods are manufactured by

M/s………………………
2 ii) No other make or model is acceptable for the following reasons:
a) …………………………..
b) …………………………..
c) …………………………..
3 iii) Concurrence of finance wing to the proposal has been obtained vide :……
4 iv) Approval of the competent authority has been obtained vide :

……………..
(Signature with date and designation of the procuring officer)
Suitable tender document, containing required terms & conditions are to be issued to
the selected firm for preparing and sending its quotation.
The question of ‘late tender’ as well as elaborate process of receipt & opening of tender,
as applicable for Open Tender and LTI will not apply in case of procurement through
single tender enquiry.
The purchase STI may be made on the recommendations of a duly constituted Purchase
Committee consisting of five members of having a mix of experts, academics and the
department at an appropriate level as decided by the Head of Department. The
committee will survey the market to ascertain the reasonableness of rate, quality
and specifications and identify the appropriate supplier. Before recommending
placement of the 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 eGovernance 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 eGovernance goods in question."
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4 EARNEST MONEY AND PERFORMANCE SECURITY
4.1 Earnest Money Deposit (EMD)
Earnest Money Deposit (EMD) is also known as Bid Security. To safeguard against a
bidder’s withdrawing / altering its bid during the bid validity period in the case of
advertised or limited tender enquiry, EMD is to be obtained from the bidders except
those who are registered/empanelled with Central Purchase Organization. The bidders
are required to furnish EMD along with their bids. Amount of EMD should ordinarily
be between 2% to 5 % of the estimated value of the contract/Purchase Order.
Depending on the type of eGovernance goods to be purchased, total value of purchase
and urgency of requirement, the exact amount of EMD should be decided by the
Ministry / Department and indicated in the tender enquiry document.
Submission of EMD is not necessary for a contract value upto Rs. 1 lakh5. The EMD may
be accepted in the form of Demand Draft, Banker’s Cheque or a Bank Guarantee in
acceptable form from any of the commercial Banks, safeguarding the purchaser’s
interest in all respects. (A model format of Bank Guarantee for obtaining EMD has been
provided at Section 6.15 of Model RFP templates for Implementation Agencies
http://deity.gov.in/content/rfp-standardization-model-rfps-and-guidance-notes).
The EMD should remain valid for a period of 45 days beyond the final tender validity
period.
4.2 Forfeiture of EMD
EMD of a tenderer will be forfeited, if the tenderer withdraws or amends its tender or
impairs or derogates from the tender in any respect within the period of validity of its
tender. Further, if the successful tenderer fails to furnish the required performance
security within the specified period, its EMD will be forfeited.
4.3 Refund of EMD
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EMD furnished by all unsuccessful tenderers should be returned to them without any
interest whatsoever, at the earliest but not later than 30 days after conclusion of the
tender process. EMD of the successful tenderer should be returned, without any interest
whatsoever, after receipt of performance security from it as called for in the tender.
4.4 Performance Security
To ensure due performance of the contract, Performance Security is to be obtained from

the successful bidder awarded the contract. Performance Security is to be obtained from
every successful bidder irrespective of its registration status etc. Performance Security
should be for an amount of five to ten percent of the value of the contract. Performance
Security may be furnished in the form of a Demand Draft or Bank Guarantee from a
Commercial bank in an acceptable form safeguarding the purchaser’s interest in all
respects. Performance Security is to be furnished by a specified date (generally 21 days
after notification of the award) and it should remain valid for a period of at least 60
days beyond the date of completion of all contractual obligations of the supplier,
including warranty obligations. (A model format of Performance Bank Guarantee has
been provided at Appendix III, Form I of Model RFP templates for Implementation
Agencies http://deity.gov.in/content/rfp-standardization-model-rfps-and-guidance-
notes). Submission of Performance Security is not necessary for a contract value upto
Rs. 1 lakh.
4.5 Forfeiture of Performance Security
Performance security is to be forfeited and credited to the purchase organization in the

event of a breach of contract by the supplier, in terms of the relevant contract.
4.6 Refund of Performance Security
Performance Security should be refunded to the supplier without any interest,

whatsoever, after it duly performs and completes the contract in all respects but not
later than 60 days of completion of all such obligations under the contract.
4.7 Verification of the Bank Guarantees
Bank Guarantees submitted by the tenderers / suppliers as EMD / Performance

Security need to be immediately verified from the issuing Bank before acceptance.
4.8 Safe Custody of EMDs, Performance Securities & Other Instruments
Suitable mechanism for safe custody, etc. and monitoring of EMDs and Performance
Securities and other Instruments should be evolved and implemented by each
Ministry/Department. The Ministries/Departments shall also make institutional
40
arrangements for taking all necessary actions on time for extension or encashment or
refund of EMDs and Performance Securities, as the case may be. Monitoring should also
include a monthly review of all Bank Guarantees and other instruments expiring after 3
months, along with a review of the progress of the corresponding contracts. Extension
of Bank Guarantees and other instruments, where warranted, should be sought
immediately and implemented within their validity period.
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5 DEFINING PRE-QUALIFICATION AND TECHNICAL EVALUATION CRITERION
5.1 Expression of Interest
The objective of issuance of EOI document is to shortlist a potential list of bidders who
have the basic competency, capacity and understanding of the solution required by the
Government. An EOI should be issued under the following typical circumstances:
 Scope of work is not clear, hence, an EOI could help enter a process to define and refine
it through discussions with potential Systems Implementation Agencies/System
Integrators
 Multiple solutions are possible and the Purchaser is not clear on the technology or
solution. Hence Purchaser wants to conduct a market assessment for possible (related)
Solutions, Technologies and Vendors
 Budget estimates are unclear (or flexible)
 For all SI Contract where the value of the contract is more than INR 25 Lakhs
5.2 Pre-Qualification
At times, the Purchaser does not have sufficient time to carry out the EOI, in that case the
objectives of carrying EOI are largely met with having a Pre-Qualification in two Stage bidding.
5.3 Designing Pre-Qualification (PQ) / Eligibility Criteria
The Eligibility / Pre-Qualification (PQ) criteria set out in any EOI document basically
aims to invite proposals from only the genuine contenders and solution providers. The
criteria should be set so as to encourage competition and quality responses/bidding.
The guidelines to keep in mind when establishing a set of Eligibility Criteria are:
 Ensure that the criteria/PQs or conditions to participate in the bidding process are
flexible and practical; allowing international bidders too
 PQs have direct and perceptible linkage with scope of work, project’s financial worth
and risk
 PQs are focused towards quality of solution and bidder competence
 Prequalification criteria guidelines for different types of Vendors (software OEM’s and
hardware OEM’s should be considered separately) as many points requiring support,
spare parts, manufacturing needs will be different.
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If the Government entity/Purchaser wishes to limit the number of suppliers responding to the
EOI, in case the market assessment resulted in too many suppliers, then the following
additional PQ criteria may be utilized:
 Suggested Solutions (one or more than one)

 Bidder’s Experience in “Similar” Projects (for which Work Order / Completion
Certificates can be provided)
 Bidder’s Competence
5.3.1 Scope of work6 Related business or revenue
This criterion is important for the Purchaser as it ensures a free and fair competition by
encouraging eligible bidders. The Purchaser should ensure that any of the shortlisted bidders
should have the ability to execute the assignment. As a thumb rule, one can keep the minimum
Scope of Work related Turnover as ten (10) times the estimated value of the assignment being
tendered for Implementation agencies and five (5) times the estimated value of the assignment
being tendered for Consulting organizations.
5.3.2 Sales Turnover
Sales Turnover requirement does not add value in increasing the competition or encouraging
bidders who can provide quality solution. Hence it is suggested that this condition should NOT
be generally put as a PQ criterion in the EOI. To mitigate a risk of eliminating the PQ criterion
on financial strength of the bidder, it is suggested that the PBG may be increased.
However the Purchaser may still like to retain this PQ criterion for large projects (suggested Rs.
20 crores or more) where significant initial financial investments are required and large cash
flows are needed for operating them.
5.3.3 Networth Requirements
This PQ criterion should generally NOT be used as it does not add any incremental value to the
profile of bidders and may restrict competition. However this may be useful for high risk and
6 Purchaser should keep in mind that the “Nature of Work” is not too specific as the Bidders may not be keeping their books of
accounts if the nature of work is too specific. Typically “System Implementation” or “Consulting” is a term which most of the
bidders would be able to back it up with in the Annual Reports or be able to provide the statement / certificate. However in case the
Purchaser wants to use some specific turnover requirement, it should check with the potential bidders if they would be able to
provide the Auditor certificate. In any case, the Purchaser should be cautious that this is not used to restrict competition.
43
large CapEx and OpEx projects. In those cases, it helps the Government de-risk itself from
choosing a partner who might default. Hence this criterion should be used in the following
situation :
 It is a long term project (more than 3 years)

 The payment terms are of the nature that the bidder would have to keep on having
significant negative cashflows for more than half the project period
The above situations would generally be applicable for the PPP projects (and not for System
Integrator or Consulting work) and hence the networth requirements should be a PQ criterion
for all the PPP projects, given the risks involved in these projects.
5.3.4 Project Experience: Number and Value of Projects
The PQ for project experience required from the bidder with reference to the context of the
solution to be delivered, as defined in the tender document, should aim to achieve the
following:
a) One project of similar nature costing not less than the amount equal to 80 – 100% of the
estimated value1 of assignment to be awarded
b) Two projects of similar nature costing not less than the amount equal to 50 – 60%% of
the estimated value1 of assignment to be awarded
c) Three projects of similar nature costing not less than the amount equal to 40-50% of the
estimated value1 of assignment to be awarded
The following should also be ensured:
 Definition of “similar” work should be clearly defined with references to domain, sector or
industry and functional area of scope of work
 Also anything more specific than this requirement, may result in restricting competition and
should be done when only for cases when there is significant justification for its requirement.
5.3.5 Power of Attorney
The POA of a listed company should be accepted in the format available with the bidding
agency, as long as it authorizes the signatory to sign on the bid documents on behalf of the
company.
5.3.6 Manpower Strength
In general, the RFP for SI Projects, should not have a PQ criterion pertaining to Manpower
strengths. This clause does not add any incremental vale to the process. However this
44
requirement may be introduced as a pre-qualification (as an exception) ONLY when there is a

large and complex project.
For IT Consulting Manpower requirements (numbers) this criterion should generally not be
applicable unless it is a case of full time onsite deployment of more than five (5) consultants.
5.3.7 Certifications
The requirement of any certification as a part of Pre-Qualification criterion in an EOI should

only be encouraged when it is relevant to the Scope of work. Further it should be clear to the
Purchaser on how these certifications would affect the quality of the Deliverables and what
checks and balances have been designed to ensure that such certifications would add value.
5.3.8 Registered Legal Entity
Companies registered under companies Act 1956 is one of the Pre-qualifications criterion in the
Consulting tenders. This may limit the competition to a few Indian firms for assignments of
specific size or may not generate response from firms which have a niche in a specific area.
Several of the government reforms in India / developing countries are directly led by foreign
firms with local offices in respective countries. Hence the Purchaser should assess the
requirement of the legal entity being registered under the Companies Acts. It is suggested that
the Purchaser should look at allowing partnership firms registered under Limited Liability
Partnerships (registered under LLP Act, 2008) to participate in bid process for eGovernance
projects in India.
5.3.9 Consortiums
Since part of the objective during the EOI stage to get a good understanding of the possibilities
of the solution (through experience, best practices and suggestions of the bidders), allowing the
consortiums for the EOI may add value to the process.
5.3.10 Conflict of Interest
At the EOI stage, conflict of interest clause should generally not be put in the Pre-Qualification
criterion unless the scope of work and its outcomes are clear and certain.
5.4 Designing Technical Evaluation Criteria
Technical Evaluation Criteria are the bid response parameters on which the evaluation is
carried out to arrive at a final (technical) score for each qualified agency.
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Hence, the Technical Evaluation Criteria should:
 Be as objective as possible, breaking the scoring down to individual identifiable

components
 Have direct and perceptible linkage to nature and scope of work
 Use the most relevant scoring / weighting scheme to evaluate; weighting should be
basis their importance to the Government or project’s outcomes. The weightings must be
disclosed in the tender document.
 Establish the scoring guidelines prior to contacting vendors/creating the RFP. Then,
when the proposals are received, score them based on the criteria established in the RFP
 Have scoring for each component of the solution rather than an overall score for the
solution
 Provide weights / maximum marks for each Technical evaluation criterion; weights
should be as per their importance to the project or project’s outcomes and must be
disclosed in the tender document.
 In case of a software solution, evaluate the coverage of or degree of match to functional
and technical requirements by the solution
(Templates for various types of Technical evaluation criterion have been provided in the Model
RFP documents).
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6 KEY CONTRACTUAL TERMS & CONDITIONS
6.1 Extension of Delivery Period
If the supplier is unable to complete the supply (or attain “Go-Live”) within the
stipulated delivery period for which the supplier is responsible, it (supplier) is
required to request for extension of delivery period. If the purchaser agrees to
extend the contractual delivery schedule, the same may be done by issue of an
amendment to the contract. The amendment letter is to mention (wherever relevant),
inter alia, imposition of liquidated damages; or no extra price ; or additional cost for
any reason whatsoever beyond the contractual cost will be paid to the
Implementation agency/supplier for the delayed supply.
6.2 Performance Notice
A situation may arise where the supply/services has not been completed within the
stipulated period due to negligence / fault of the supplier; however the supplier has
not made any request for extension of delivery period but the contracted eGovernance
goods/services are still required by the purchaser and the purchaser does not want to
cancel the contract at that stage. In such a case, a Performance Notice (also known as
Notice-cum-Extension Letter) may be issued to the supplier by suitably extending the
delivery date and by imposing liquidated damages with denial clauses etc. on identical
lines as in mentioned above. Supplier’s acceptance, etc. of the performance notice and
further action thereof should also be processed in the same manner as mentioned
above.
6.3 Insurance
In connection with the provision of the Services, the Procurer should look at the
possible risks and explicitly put the Insurance requirement in the tender. The insurance
can be maintained by the Implementation Agency for a Turnkey solution or
provisioning of the Hardware should normally have and maintain:
(a) for the Agreement Period, valid and enforceable insurance coverage for:
(i) public liability;

(ii) either professional indemnity or errors and omissions;
(iii) product liability;
(iv) workers’ compensation as required by law; and
(v) any additional types explicitly specified in the tender; and
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(b) for a period specified following the expiry or termination of the

Agreement, valid and enforceable insurance policies
The Insurance Cover amount should be explicitly stated and should cover all the
foreseeable risks of delivery for the Implementation agency.
6.4 Warrantee
During the procurement process, segregation should be made between the Warrantee
and Annual Maintenance Contract. The Warrantees are provided by the OEM for
rectification of any manufacturing defect whereas AMCs are for normal wear and tear
of the equipments. Hence the Warrantee provisions in the tender document should be
based on the understanding of the project requirements. Getting Warrantee from OEMs
for Hardware may involve high costs and hence, unless there are reasons to the
contrary, normally the following warrantee provisions should be sought in the tender
document:
Post Warranty Period but within the

Component Warranty
tender duration
Hardware Standard as provided by Warranty may not be taken from OEM.
OEM However, the AMC services should be
taken from Supplier/ IA/other service
providers
COTS Software Standard as provided by Warranty needs to be taken from OEM
OEM (no option available as it is a Software) to
avoid situations wherein the IA commits
to provide Warrantee without any
backend support from OEM.
Bespoke Software Covers the entire the tender duration
6.5 Intellectual Property Rights
6.5.1 Products and fixes
All products and related solutions and fixes provided as a part of tender should be
licensed according to the terms of the license agreement packaged with or otherwise
applicable to such product. Implementation Agency would be responsible for
arranging any licenses associated with products. “Product” in this sub-section means
48
any computer code, web-based services, or materials comprising commercially released,

pre-release or beta products (whether licensed for a fee or no charge) and any
derivatives of the foregoing which are made available to Purchaser for license which is
published by product owner or its affiliates, or a third party. “Fixes” means product
fixes that are either released generally (such as commercial product service packs) or
that are provided to the licensee when performing services (such as workarounds,
patches, bug fixes, beta fixes and beta builds) and any derivatives of the foregoing.
In this case, the IPR rests with the concerned Original Equipment Manufacturer and the
tender should incorporate this understanding.
6.5.2 Bespoke Application Development
There are a broad spectrum of options that the Purchaser (procurer) can adopt
regarding Intellectual Property Rights in Custom Software (and in Custom Materials).
Option-1: The Procurer retains all Intellectual Property Rights and tightly restricts
Supplier’s rights to Custom Software and information related to it. This approach may
be apt when the Purchaser has highly sensitive procedures embedded in the Custom
Software (e.g., a central bank’s settlement system) or commercial competitive concerns
regarding wider use of the Software, designs, or information, or where the Purchaser
considers that it is contributing valuable know-how to the development of the Custom
Software and wishes to share in future profits with the Supplier that derives from
exploitation of that know-how.
Option-2: The Purchaser retains no Intellectual Property Rights in the Custom Software
and only licenses its use from the Supplier. This approach is appropriate when the
Supplier wants to take advantage of the potential cost reduction in allowing the
Supplier to commercialize the Custom Software (rather than sharing in future profits)
and where the Purchaser has no proprietary or commercial concerns regarding its
reuse.
A wide variety of intermediate arrangements can be adopted, depending on the

circumstances. These would involve variations of what the Purchaser is entitled to do
with the software, designs, and related information (and under what conditions). These
rights and obligations include the following:
a) duplicating and using the software on other equipment, such as backups,

additional computers, replacements, upgraded units, etc.;
b) transferring the license or sublicensing the software for other entities to use,
modify, develop, commercialize, etc.;
49
c) sharing proprietary information regarding the Custom Software with various

parties.
The Procurer’s obligations and rights (and the conditions under which those rights and
obligations apply) can vary substantially. These include:
(i) what the Purchaser must and can do with the Source Code, and executable
code of the Custom Software;
(ii) sharing, reselling, and otherwise providing access to the software, designs
and related information; and
(iii) auditing for license compliance
The Supplier’s rights in relation to the Custom Software may:
 Be limited to use in order to support the Purchaser; or
 Extend to commercial exploitation by re-licensing to third party customers.
If the Supplier’s rights extend to commercial exploitation, they may be limited as

follows:
 There may be an interim period, defined to protect the Purchaser’s competitive

edge, during which the Supplier is not permitted to exploit commercially;
and/or
 The Supplier may be prohibited from licensing the Custom Software to certain
categories of customer (for example, direct competitors of the Purchaser) or in
certain territories (for example, the Purchaser’s Country), either for a limited
period or indefinitely; and/or
 The Supplier may be required to provide all the fixes, updates and upgrade of
the application
 The Supplier may be required to pay royalties to the Purchaser when it licenses
third parties to use the Custom Software. The first two of these categories of
limitation are intended to protect the Purchaser’s competitive edge.
Option-3: Allow the Purchaser to share in future profits made by the Supplier through
exploitation of the Custom Software. Royalty arrangements will have to be backed up
by obligations to report to the Purchaser regarding future sales of products to which
royalties apply and audit rights so that the Purchaser can check that the Supplier’s
50
reports are accurate. This option should rarely be used due to operational challenges
involved.
6.5.3 Pre-existing work:
All IPR including the source code and materials developed or otherwise obtained
independently of the efforts of a either the procurer or the Implementation Agency
outside the concerned tender (“pre-existing work”) including any enhancement or
modification shall ordinarily remain the sole property of that party. During the
performance of the services for the tender, each party will grant to the other party (and
their sub-contractors as necessary) a non-exclusive license to use, reproduce and modify
any of its pre-existing work provided to the other party solely for the performance of
such services for duration of the tender. Except as may be otherwise explicitly agreed to
in a statement of services, upon payment in full, the Implementation Agency should
grant Purchaser a non-exclusive, perpetual, fully paid-up license to use the pre-existing
work in the form delivered to Purchaser as part of the service or deliverables only for its
internal operations. Under such license, either of parties will have no right to sell the
pre-existing work of the other party to a Third Party.
6.6 Limitation of Liability
As per GFR rule 204 “The terms of contract must be precise, definite and without any
ambiguities. The terms should not involve an uncertain or indefinite liability, except in the case
of a cost plus contract or where there is a price variation clause in the contract.”
The aggregate liability of the IA to the purchaser organization shall not exceed the total
contract price (or an estimated contract price where the contract price is not easily
determinable). However, the liability cap shall exclude any indemnity obligations the
IA carries under contract.
6.7 Resale of Bandwidth
Purchase of network bandwidth should not be included in the scope of work of System
Integrator as it is a case of resale of bandwidth which is illegal as per TRAI guidelines.
When Purchaser wants to delegate the complete project to the System Integrator, then a
Tripartite Agreement can be signed between Purchaser, Implementation Agency and
ISP (A template for Tripartite Agreement has been provided in model RFP for System
Integrators) wherein the responsibility allocation is done in a manner which helps the
Implementation Agency have the necessary flexibility pertaining to the selection of ISP
to meet its SLAs and the procurer to comply with TRAI regulations.
51
Alternatively, the procurer can procure the bandwidth directly from the Internet Service
Providers.
A template of the Tripartite Agreement has been provided in the Model RFP templates
for Implementation.
6.8 Integrity Pact
Integrity Pact is essentially a vigilance tool to bring about greater transparency and
competition in procurement/ award of tender. The Pact envisages an agreement
between the prospective vendors/ bidders and the buyer committing the persons/
officials of both the parties, not to exercise any corrupt influence on any aspect/stage of
the contract. The essential ingredients of the Pact include:
 Promise on the part of the principal not to seek or accept any benefit, which is
not legally available;
 Principal to treat all bidders with equity and reason;
 Promise on the part of bidders not to offer any benefit to the employees of the
Principal not available legally;
 Bidders not to enter into any undisclosed agreement or understanding with other
bidders with respect to prices, specifications, certifications, subsidiary contracts,
etc.
 Bidders not to pass any information provided by Principal as part of business

relationship to others and not to commit any offence under PC/IPC Act
 Foreign bidders to disclose the name and address of agents and representatives
in India and Indian Bidders to disclose their foreign principals or associates;
 Bidders to disclose the payments to be made by them to agents/ brokers or any

other intermediary
 Bidders to disclose any transgressions with any other company that may
impinge on the anti-corruption principle.
Central Vigilance Commission
Circular No.24/8/08
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The relevant extracts of the Order are provided below
The Commission has examined these issues and suggested the following guidelines:
i) Adoptlon of Integrity Pact in an organization is voluntary but once adopted, it
should cover all tenders/procurements above a specified threshold value, which
should be set by the organization itself.
ii) IP should cover all phases of the contract i.e. from the stage of Notice lnviting Tender
(NlT)/pre-bid stage to the stage of last payment or a still later stage, covered through
warranty, guarantee etc.
iii) IEMs are vital to the implementation of IP and atleast one IEM should be invariably
cited in the NIT. However, for ensuring the desired transparency and objectivity in
dealing with the complaints arising out of any tendering process, the matter should
be referred to the full panel of IEMs, who would examine the records, conduct the
investigation and submit a report to the management giving joint findings.
iv) A maximum of three lEMs would be appointed in Navratna PSUs and upto two
IEMs other Public Sector Undertakings. The organizations may, however, forward a
panel of more than three names for the Commission’s approval. For the PSUs having
a large territorial spread or those having several subsidiaries, the commission may
consider approving a large number of lEMs but not more than two lEMs would be
assigned to any one subsidiary'
v) Remuneration payable to the lEMs may be similar to the Independent Directors in
the organization
vi) ln view of limited procurement activities in the Public Sector Banks, Insurance
companies and Financial institution they are exempted from adopting IP.
The IP envisages a panel of Independent External Monitors (IEMs), who would review
independently and objectively, whether and to what extent parties have complied with
their obligations under IP.
A customized template of the Integrity pact has been provided in the Model RFP
templates for Implementation Agencies.
6.9 Remedies to Purchaser for delay in Supply / Non-Supply
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The purchaser has the following remedies for delay in Supply / Non-Supply for which
Supplier is responsible depending upon the circumstances of the case:
i) Extend the delivery with imposing of liquidated damages and other

denial clauses
ii) Forfeit the performance security
iii) Cancel the contract
iv) Impose other available sanctions/penalties
6.10 Liquidated Damages
There should be a suitable provision in the terms & conditions of the contract for
claiming liquidated damages of appropriate amount from the supplier to take care of
delays in supplies and performance, for which the supplier is responsible. Such
recovery through liquidated damages should be without prejudice to the other
remedies available to the purchaser under the terms of the contract. Depending on the
nature and value of the eGovernance goods to be ordered and the urgency of the
requirement, a specific percentage of the delivered price of the delayed goods (or
delayed services) for each week or part thereof delay, is to be incorporated in the
contract terms. Generally, the percentage is 0.5% per week or part thereof. There
should also be an appropriate maximum limit of such deduction, to be shown as a
specific percentage of the contract value of delayed supplies/services and incorporated
in the contract terms. This percentage is generally 10%. Any lower ceiling should be
clearly justified while formulating the contract.
There may be situations when charging Liquidated Damages may not be justified as the
reasons for delay in delivery by the supplier may be largely due to circumstances well
beyond under his control. Under these circumstances, the Procurer may waive off
liquidated damages altogether or a part thereof.
6.11 Service Level Agreement
SLAs define the quality, efficiency and timeliness of service being delivered as part of a
eGovernance project. For large turnkey projects, they help the Government sustain the
planned outcomes from the solution deployed on a continued basis over a long period
of time.
54
Some of the guidelines which should be followed for drafting the Service Level
Agreement are as follows:
 SLAs should be performance and service outcome driven and should be largely
be within the control of the Implementation agency
 SLAs should be realistic, solution specific/compatible and evolving in nature
 SLAs should be consistent with and match the functional and technical
specifications of application software, hardware, network and other
installations’– it should not be developed in isolation
 SLA penalty must not be applied cumulatively by counting each equipment that
has/had failed due to a single problem. In such cases, the penalty should be
calculated on each SLA item and only one penalty of the highest value should be
levied. However the cause & effect should clearly be established in such cases
 SLA penalties must be applied on services only (post Go-Live of the Turnkey
solution), and not on capital expenditure items already supplied and (most
likely) owned by the customer
 The period of application of Liquidated Damages and Service Levels should be

exclusive to each other
 There should also be an appropriate maximum limit of such SLA penalties

incorporated in the contract terms. This percentage is generally 10% for each
payment cycle/performance monitoring cycle. Any lower ceiling should be
clearly justified while formulating the contract.
 Penalties should be articulated in a manner in which it drives a behaviour of the

Implementation agencies. In case, the maximum limit of the penalty is reached
early on during the performance monitoring period, the Implementation agency
will have little incentive to rectify the performance. Hence, there should be an
inbuilt mechanism for the Implementation agency to recover the penalty for
good performance during the balance period of the performance cycle.
6.12 Force Majeure
Force Majeure means an event beyond the control of the supplier and not involving the
supplier’s fault or negligence and which is not foreseeable. Such events may include,
but are not restricted to, acts of the purchaser either in its sovereign or contractual
capacity, wars or revolutions, hostility, acts of public enemy, civil commotion, sabotage,
55
fires, floods, explosions, epidemics, quarantine restrictions, strikes, lockouts, and freight
embargoes.
If there is delay in performance or other failures by the supplier to perform its

obligation under its contract due to event of a Force Majeure, the supplier shall not be
held responsible for such delays/failures.
If a Force Majeure situation arises, the supplier shall promptly notify the purchaser in
writing of such conditions and the cause thereof within twenty-one days of occurrence
of such event. Unless otherwise directed by the procurer in writing, the supplier shall
continue to perform its obligations under the contract as far as reasonably practical, and
shall seek all reasonable alternative means for performance not prevented by the Force
Majeure event.
If the performance in whole or in part or any obligation under this contract is prevented
or delayed by any reason of Force Majeure for a period exceeding sixty days, either
party may at its option terminate the contract. Both sides will try and minimize the
financial impact to the other party. However, in case the supplier has incurred any
expenditure or will incur any expenditure for closure of existing contract with the third
party, the same will be compensated by the Purchaser.
There may be a Force Majeure situation affecting the purchase organization only. In
such a situation the purchase organization is to take up with the supplier on similar
lines as above for further necessary action.
6.13 Conflict of Interest
Care should be taken that during the bidding stage, the “Conflict of interest” situation
should not arise. The concerned agencies / individuals are required to give an
undertaking that there is no conflict of interest situation. In case there is a conflict of
interest situation, the concerned agency/individual should not be involved /
considered for that particular activity. The below paragraphs detail out the situations
where conflict of interest situation exists.
For a Systems Implementation Agency / System Integrator
Conflict of interest would exist if:
 There are existing contracts of the bidder with the concerned Purchaser /
Government entity/department.
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 There is clear and certain possibility that the services executed / delivered by the
bidder as part of the scope of work would lead to outcomes wherein the bidder
can have vested business interests / benefits
The following Guidance Notes further explain and illustrate the provisions of conflict of
interest for Engaging “System Integrators/Implementation Agencies” for eGovernance
Projects.
a. The process for selection of System Integrators/Implementation Agencies should

avoid both actual and perceived conflict of interest. System
Integrators/Implementation Agencies should be deemed to be in a conflict of
interest situation if it can be reasonably concluded that their position in a
business or their personal interest could improperly influence their judgment in
the exercise of their duties. Hence, the System Integrators/Implementation
Agencies should not be allowed to take up the directly derived SI work in the
same area of department/agency (area of influence).
b. Conflict of interest may arise between the Purchaser and a SI or between SI and
present or future Contractors/ System Integrators/ Implementation Agencies.
Some of the situations that would involve conflict of interest are identified
below:
i. Purchaser and SI vendor:
(i) Potential SI vendor should not be privy to information from the

Purchaser/Government Department which is not available to others.
(ii) Potential SI vendor should not have recently worked for the Purchaser
overseeing the project in a role which is even perceived as “influential
role” for drafting of SOW and evaluation criterion.
ii. SI vendor and Consultants:
(i) No SI vendor should have an ownership interest or a continuing

business interest or an on-going relationship with an existing
Consultant working with the Purchaser under the same “Program” or
“Scheme” and interacting with the same officials of the Purchaser.
(ii) No SI vendor should be involved in owning or operating entities

resulting from the project (unless upfront indicated in case an SPV is
required to be formed).
c. One of the normal ways to identify conflicts of interest is through self-declaration

by Implementing Agency (it is expected that wherever a conflict exists, which
has not been declared, competing companies are likely to bring this to the notice
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of the Purchaser, for which the Purchaser should seek clarification). All conflicts
must be declared as and when the SI become aware of them.
For the Purchaser & Proposal Evaluation Committee
A conflict of interest or the appearance of a conflict of interest may occur if member(s)

of the Evaluation team are directly or indirectly involved with an organization that has
submitted a proposal for evaluation.
Prior to reviewing any proposals, member(s) of the Evaluation team must inform the
Purchaser of any potential conflicts of interest or the appearance thereof. If members of
the Evaluation team become aware of any potential conflict of interest as they review a
proposal, they must immediately notify the Proposal Evaluation Committee chairman.
Member(s) of the Evaluation team may withdraw as an RFP evaluator if they find
themselves in a way that could create the appearance of bias or unfair advantage with
or on behalf of any competitive bidder, potential bidder, agent, subcontractor, or other
business entity, whether through direct association with contractor representatives,
indirect associations, through recreational activities or otherwise.
It is suggested that the members of Proposal Committee should sign a self-declaration.

A sample Self-Declaration Proforma, for this case, can be of the following form:
“I have read the RFP document and understand my obligations as explained in the document.
I declare that myself or any of my family members are part of the organizations which have bid
for the proposal. I further understand that I must advise the Purchaser if such a situation
currently exists or arises during my term of service as a Proposal evaluator.
I further understand that I must sign and deliver this statement to the Purchaser prior to
participating in the evaluation process.
Date:
RFP#:
Evaluator Signature:
Evaluator Name (Printed)”
6.14 Cancellation of Contract for Default
The purchaser may, without prejudice to any other remedy for breach of contract, by
written notice of default sent to the supplier, terminate the contract in whole or in part:
a) If the supplier fails to deliver any or all of the stores within the time
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period(s) specified in the contract, or any extension thereof granted by

the Purchaser; or
b) If the supplier fails to perform any other obligation under the

contract within the period specified in the contract or any extension
thereof granted by the purchaser.
In the event the purchaser terminates the contract in whole or in part; the purchaser
may take recourse to any one or more of the following action.
a) the Performance Security is to be forfeited;
b) the purchaser may procure, upon such terms and in such manner as it
deems appropriate, stores similar to those undelivered, and the
supplier shall be liable for all available actions against it in terms of
the contract.
c) however, the supplier shall continue to perform the contract to the

extent not terminated.
Before cancelling the contract and taking further action, it may be desirable to obtain
legal advice from the Legal Wing of the Ministry/Department or from the Ministry of
Law.
6.15 Termination of Contract for insolvency
If the supplier becomes bankrupt or otherwise insolvent, the purchaser may, at any
time, terminate the contract, by giving written notice to the supplier, without
compensation to the supplier provided that such termination will not prejudice or
affect any right of action or remedy which has accrued or will accrue thereafter to the
purchaser.
6.16 Termination of Contract for Convenience
After placement of contract, there may be some unforeseen situation compelling

the purchaser to cancel the contract. In such a case, the purchaser is to send a suitable
notice to the supplier for cancellation of the contract, in whole or in part, for its
(purchaser’s) convenience, inter alia, indicating the date with effect from which the
termination is to become effective. Depending on the merits of the case, the purchase
organization may have to suitably compensate the supplier on mutually agreed terms
for terminating the contract.
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Suitable provisions to this effect are to be incorporated in the tender document as

well as in the resultant contract.
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7 ELEMENTS OF PRICE AND TERMS OF PAYMENT
7.1 Introduction
The elements of price included in the quotation of a tenderer depend on the nature of
the scope of work and the allied services to be performed, location of the supplier,
location of the user, terms of delivery, penalties, Service Levels, ambiguity in the scope
of work, risks involved, extant rules and regulations about taxes, duties, etc. of the
seller’s country and the buyer’s country.
In case of indigenous goods, the main elements of price are cost of the product sourced
from OEM, cost of providing the services, overhead, margin of profit, transit insurance,
excise duty, contingencies for service levels, penalties, other risks and other taxes and
duties as applicable. In case of imported Hardware, Software or other Services sourced
from outside the country, there may be elements of contingency for Exchange rate
variations, custom duty, import duty, landing and clearing charges and commission to
Indian agents. Further, depending on the nature of the eGovernance goods (whether
domestic or imported), there may be cost elements towards installation &
commissioning, operator’s training etc.
It is, therefore, necessary that, to enable the tenderers to frame their financial bid
properly in a meaningful manner, the tender documents should clearly specify the
desired details on the scope of work, terms of delivery and, also the duties and
responsibilities to be performed by the Implementation Agency.
Where the price has several components like price of the eGovernance goods, costs for
installation & commission, training, change management, data entry, Data Centre,
Disaster recovery, Be-Spoke software Development, Solution stack etc. the tenderers
should be asked to furnish the cost break-up indicating the applicable prices for each
such component (as specified and desired in the tender enquiry document) along with
the overall price.
7.2 Currency
The tender documents are to specify the currency (currencies) in which the tenders are
to be priced. As a general rule, domestic tenderers are to quote and accept their
payment in Indian currency; costs of imported eGovernance goods, which are directly
imported against the contract, may be quoted in foreign currency (currencies) and paid
accordingly in that currency; and the portion of the allied work and services, which are
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to be undertaken in India (like installation & commissioning of equipment) are to be

quoted and paid in Indian currency.
7.3 Firm Price vis-à-vis Variable Price
7.3.1 For short term contracts where delivery period does not extend beyond 18
months, contract should be concluded with firm and fixed price by inviting
tenders accordingly. Where it is decided to conclude the contract with variable
price, an appropriate clause incorporating, inter alia, suitable price variation
formula should also be provided in the tender enquiry documents. In the price
variation clause, the price agreed upon should specify the base level viz, the
month and year to which the price is linked, to enable variations being calculated
with reference to the price levels prevailing in that month and year. A formula
for calculation of price variation that has taken place between the base level and
the scheduled delivery date is to be included in the price variation clause. The
variations are to be calculated by using indices published by Governments
mentioning exact source. Suitable weights are to be assigned to the applicable
elements viz. capital expenditure, salaries in the price variation formula. If
required, input cost may be further sub-divided for different categories, for
which cost indices are published. The price variation formula is also to stipulate
a minimum percentage of variation of the contract price, only above which the
price variation will be admissible (e.g., where the resultant increase is lower than,
say, 2% of the contract price, no price adjustment will be made in favour of the
Implementation agency).
7.3.2 The price variation formula, as and if necessary, should be formulated by a

competent authority before incorporating the same in the tender enquiry
document.
7.3.3 Exchange Rate Variation (ERV)
In case of a contract involving substantial import content(s) as a component or as a

whole of items in the Bill of Material and having a long delivery period (exceeding one
year from the date of contract), an appropriate Foreign Exchange Variation clause may
be formulated and incorporated in the Tender Enquiry Document. In that clause, the
tenderers are to be asked to indicate import content(s) and the currency(ies) used for
calculating the value of import content(s) in their total quoted price, which (i.e. the total
quoted price) will be in Indian Rupees. The tenderers may be asked to indicate the Base
Exchange Rate for each such foreign currency used for converting the FE content into
Indian Rupees and the extent of foreign exchange rate variation risk they are willing to
bear.
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Option 17
To work out the variation due to changes (if any) in the exchange rate(s), the base date
for this purpose will be the due date of opening of tenders/seven days prior to the due
date of opening of tenders (the purchase organization is to decide and adopt a
particular suitable date). The variation may be allowed between the above base date
and the date of remittance to the foreign principal/mid-point of manufacture of the
foreign component/or the actual purchase schedule provided by the bidder (the
purchase organization is to choose the appropriate date). The applicable exchange rates
as above will be according to the TT Selling Rates of Exchange as quoted by authorized
Exchange Bankers approved by the Reserve Bank of India on the dates in question. No
variation in price in this regard will be allowed if the variation in the rate of exchange
remains within the limit of plus/minus 2.5 percent. Any increase or decrease in the
Customs Duty by reason of the variation in the rate of exchange in terms of the contract
will be to the buyer’s account. In case Delivery period is refixed/ extended, ERV will
not be admissible, if this is due to default of the supplier. The following documents
should be furnished by the supplier for claiming ERV:
(a) A bill of ERV claim enclosing working sheet (may be taken as a part of the
financial bid)
(b) Schedule for placing order from OEM for the component
(c) Copies of import order placed on supplier
(d) Invoice of supplier for the relevant import order
(e) Banker’s Certificate/debit advice detailing F.E. paid, date of remittance

and exchange rate
Option 2
To work out the variation due to changes (if any) in the exchange rate(s), the base date
for this purpose will be the due date of opening of tenders/seven days prior to the due
7 This option needs to be finalized before publishing of this document
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date of opening of tenders (the purchase organization is to decide and adopt a

particular suitable date).
The variation reimbursed to the vendor shall be calculated on the difference between (a)
the invoice value based on the previous three months average exchange rate; and (b)
invoice value based on the price quoted by the vendor on the bid submission date. The
applicable exchange rates as above will be according to the TT Selling Rates of
Exchange as quoted by authorized Exchange Bankers approved by the Reserve Bank of
India on the dates in question. No variation in price in this regard will be allowed if the
variation in the rate of exchange remains within the limit of plus/minus <2.5> percent.
Any increase or decrease in the Customs Duty by reason of the variation in the rate of
exchange in terms of the contract will be to the buyer’s account. In case Delivery period
is refixed/ extended, ERV will not be admissible, if this is due to default of the supplier.
(No additional documents are to be provided in this option)
7.4 Duties and Taxes on Domestic Goods
The duties and taxes including excise duty and VAT (or the GST as expected shortly)
levied by the Government on domestic goods vary from product to product. As a
general policy, the statutory variations in such duties & taxes are to be allowed during
the period from the date of tender to the date of acceptance of the tender (i.e. placement
of contract) and during the original/ re-fixed delivery period of the contract so that
both the supplier and purchaser are equally compensated for rise or fall in the prices of
the goods on account of such statutory variations.
(Note: Re-fixed delivery period means the fresh delivery period which is arrived at by
recasting the original contractual delivery period after taking care of the lost period, for
which the supplier was not responsible.)
In the tender enquiry conditions, the tenderers, wherever applicable, should be asked to
specifically state in their offer whether they intend to ask for the duties and taxes as
extra over and above the prices being quoted. In the absence of any indication to this
effect by the tenderers, it is to be assumed that the prices quoted include these elements
and no claim for the same will be entertained after opening of tenders and during the
currency of the resultant contract. However, where the tenderer in its quotation
mentions that the prices are exclusive of statutory duties & taxes and the same will be
payable extra, this condition should be incorporated in the resultant contract in clear
terms.
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However to avoid any confusion, it is recommended that the tenderer should explicitly
mention that its quotation includes current rates of taxes and duties as applicable and
statutory variations, if any at the time of supply will be applicable/payable on actuals.
However, correctness of the taxes and duties quoted by a tenderer as applicable during
that period is to be verified while considering its tender. Also, only statutory variations,
and not any other type of variations are allowed.
Note: Sales tax is not leviable on transactions of sale in the course of import. Categories
of cases constituting sale in course of Import are:
a) Where the movement of goods from the foreign country to India is

occasioned directly as a result of the sale.
b) Where there is a privity of contract between the foreign supplier and the
purchase organization.
c) Where the Indian supplier acts as the agent of the foreign

manufacturer in the agreement of the sale.
7.5 Octroi and Local Taxes
The goods supplied against contracts placed by Ministry / Department are generally
exempted from levy of Town Duty, Octroi Duty, Terminal Tax and other Levies of local
bodies. The suppliers should be informed accordingly by incorporating suitable
instructions in the tender enquiry document and in the resultant contract. Wherever
required, the suppliers should obtain the exemption certificate from the purchase
organization to avoid payment of such levies and taxes. In case, where the municipality
or the other local bodies insist upon such payments (in spite of purchase organization’s
exemption certificate), the supplier should make the payment to avoid delay in supplies
and forward the receipt of the same to the purchase organization for reimbursement
and, also, for further necessary action by the purchase organization.
7.6 Advance Payment to Supplier
Ordinarily, payments for supplies made or services rendered should be released to the
Implementation agency only after the Hardware has been commissioned or services
have been rendered. However, it may become necessary to make advance payments in
the following types of cases: -
(i) Advance payment demanded by firms holding Operations and

Maintenance contracts, AMC etc.
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(ii) Advance payment demanded by firms against turn-key contracts etc.
Such advance payments should not exceed the following limits:
(i) Thirty per cent of the contract value to private firms;
(ii) Forty per cent of the contract value to a State or Central Government
agency or a Public Sector Undertaking;
(iii) In case of maintenance contract, the amount should not exceed the
amount payable for six months under the contract.
In exceptional cases, the Ministries or Departments may, in consultation with their

Financial Advisers, relax the ceilings mentioned above. However, while making any
such advance payment, adequate safeguards in the form of bank guarantee etc. should
be obtained from the supplier. Further, such advance payments should be generally
interest bearing, suitable percentages for which are to be decided on case to case basis.
The advance made to the Implementation agencies have to be recovered in subsequent

payment schedules.
7.7 Documents for Payment
The documents, which are needed from the supplier for release of payment, are to be
clearly specified in the contract. The paying authority is also to verify the documents
received from the supplier with corresponding stipulations made in the contract before
releasing payment. The important documents, which the supplier is to furnish while
claiming payment, are:
a) Original Invoice (which can be a digitally signed electronic invoice

carrying the details for making electronic payment)
b) Proof of achieving the payment milestone as per the RFP terms
While claiming payment, the supplier is also to certify in the bill that the payment being
claimed is strictly in terms of the contract and all the obligations on the part of the
supplier for claiming this payment has been fulfilled as required under the contract. The
Department should encourage making electronic payments to the Implementation
agencies.
7.8 Modes of Payment
7.8.1 Payment to Domestic Suppliers
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Payments to domestic suppliers are usually made by cheque/demand draft drawn on a

Government treasury or branch of the Reserve Bank of India or State Bank of India
transacting government business.
7.8.2 Payment to Foreign Suppliers
Payment to foreign suppliers are ordinarily made by Letters of Credit (LC) opened by
the State Bank of India or any other scheduled/authorized Bank as decided by the
purchasing Ministry/Department. While opening the Letters of Credit, the
Ministry/Department should follow the provision of Uniform Customs and Practices
for Documentary Credit (UCPDC). If Letter of Credit is not opened, payment can also
be made to the seller through Direct Bank Transfer for which buyer has to ensure that
payment is released only after the receipt of prescribed documents.
7.8.3 E - Payment
E - Banking and E - Payments are now used by various banks by adopting Electronic
Clearing System (ECS) and Electronic Fund Transfer (EFT) procedure. Payments to
suppliers may be made through such mechanism where such facilities are available.
7.9 Deduction of Income Tax, Service Tax etc.at Source from Payments to Suppliers
This will be done as per the existing law in force during the currency of the contract.
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8 FINAL TESTING AND CERTIFICATION
8.1 Introduction
In eGovernance projects, there are essentially two types of tenders. The first type of
contract is wherein the supplier supplies the IT hardware and software as per the
requirements specified in the RFP. In this case the supplier cannot be held responsible
for meeting any Service Levels of the solution. In this case, the Government Department
/ Purchaser is responsible in ensuring that the items supplied by the supplier meet the
specifications / models desired by the procurer. The subsequent sections elaborate on
approach to be followed for quality control and inspection of the ordered eGovernance
goods.
The second type of contract is wherein the supplier is responsible for meeting the
Service levels. In this case, the supplier is essentially responsible for meeting the Service
Levels and other requirements (which may not have SLAs linked to it, for e.g. security
components and other functional / non-functional requirements) as mentioned in the
tender documents. In this case, the Purchaser generally may not get into a quality
control of the solution stack as long as the functional and non-functional requirements
are being met by the solution implemented.
8.2 Final testing and certification
The Project shall be governed by the mechanism of final acceptance testing and
certification to be put into place by the Purchaser and Implementation Agency and shall
be prescribed in the tender as under:
(a) Final testing and certification criteria will lay down a set of guidelines
following internationally accepted norms and standards for testing and
certification for all aspects of project development and implementation
covering software, hardware and networking including the processes
relating to the design of solution architecture, design of systems and
sub- systems, coding, testing, business process description,
documentation, version control, change management, security, service
oriented architecture, performance in relation to compliance with SLA
metrics, interoperability, scalability, availability and compliance with all
the technical and functional requirements of the tender;
(c) Final testing and certification criteria will be finalized from the
development stage to ensure that the guidelines are being followed and to
avoid large scale modifications pursuant to testing done after the
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application is fully developed;
(d) Final testing and certification criteria will consider conducting specific
tests on the software, hardware, networking, security and all other aspects
by the Purchaser or through a third party (for e.g. STQC)
(e) Final testing and certification criteria will establish appropriate processes
for notifying the Implementation Agency of any deviations from the
norms, standards or guidelines at the earliest instance after taking
cognizance of the same to enable the Implementation Agency to take
corrective action; etc.
The Parties shall each ensure that the range of the Services under the SLA shall not be
varied, reduced or increased except with the prior written agreement between the
Purchaser and Implementation Agency.
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9 EVALUATION OF TENDERS AND PLACEMENT OF CONTRACT
9.1 Introduction
Evaluation of tenders is one of the most significant areas of Purchase Management. The
entire process of tender evaluation and placement of contract must be transparent. All
the aspects, which are to be taken into account for evaluating the tenders including the
method to be adopted for evaluation of tenders and the techniques for determining the
most responsive tender for placement of contract are to be incorporated in the tender
enquiry document in clear and comprehensive manner without any ambiguity and/or
confusing stipulations therein, so that the interested tenderers can formulate their
competitive offers in a meaningful manner and participate in the tendering process with
confidence.
9.2 Designing Technical Evaluation
As a part of the design for Technical evaluation, the Purchaser has to make
decisions/choices on the following things, but not limited to:
- Evaluation model: lowest price/weighted attribute etc.
- Develop Rating Scale to guide evaluation panel scoring
- Determine panel decision making process: mathematical average/panel

moderation
- Identify the information required from suppliers: supplier details/response to

requirements/pricing/format etc.
- Identify any required additional steps: interview/presentation/site

visit(s)/Proof of Concept etc.
- Identify any optional additional steps: reserve the right to

interview/presentation/site visit )/Proof of Concept etc.
- The need for Government department, Ministry due diligence requirements (if
any).
The potential evaluation models are detailed out subsequently:
9.3 Technical Evaluation Models and Methods
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Technical Evaluation Methods define the process that would be adopted to select the
most competent and bidder with the best value solution offering. The Purchaser could
choose any of the following procuring model after establishing the rationale for the
same. These will still follow the same Model RFP templates with minor modifications in
the procedure to identify the most responsive bidder.
Snapshot of few Evaluation Methods
Criterion Scenarios where it should be used
Cost8 Based Selection This method of selection may be used for the assignments of following
(CBS) nature:
i. Assignment where any experienced Systems Implementation
Agency / System Integrator can deliver the services without
requirement of specific expertise.
ii. Under this category, the RFP is for projects where there is high
level of clarity on the technology and the solutions. These
would be typical implementation of COTS/ERP projects OR
any State MMPs. In eGovernance space, these projects would
be applications which have a simple citizen application
workflow. In such projects, the risk of technology feasibility is
less. In such RFP technical evaluation should emphasize on
a. The solution should provide clarity and should provide
a Bill of Material in the RFP document
b. The Evaluation should focus on the customer
satisfaction in the past projects.
Quality and Cost Under QCBS / CQQCBS, the technical proposals will be allotted
Based Selection weightage of 70% while the financial proposals will be allotted
(QCBS) weightages of 30%.
The following points may be noted :
1. Under this category, the RFP is for projects where there is
inadequate clarity on the solution.
2. In such projects a due diligence should be done on the critical
8 Wherever “cost” is a factor for evaluation, it should be noted that the “lifecycle” costs should be
considered as the factors for evaluation where the other life cycle costs are significant. For e.g. a Printer
could be the tendered out to a bidder/OEM with the lowest cost but if the cost of the cartridges (supplied
by the same bidder/OEM) are considered, then it may not be the most price competitive proposal. In
such scenarios the assumptions should be put for estimated usage and corresponding items either as a
part of the scope of work of the bidder or a similar “load” factor should be applied on the costs of the
item. In either case, it should be explicitly mentioned in the tender.
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parameters of the project covering System Functionality,

Technology, Specific implementation experience, Training
methodology, performance in Proof of concept (in case PoC is
planned), Certifications, Past experience of the vendor in executing
similar assignments, size of those assignments, profile of team
members and Project Methodology.
3. The Proposal Evaluation Committee in this case should have
expertise or should have access to expertise to objectively evaluate
& compare the various solutions components proposed by the
bidders.
Fixed Budget The RFP shall indicate the available budget and request the Systems
Selection (FBS) Implementation Agencies / System Integrators to provide their best
technical and financial proposals in separate envelopes, within the
budget.
The Points as mentioned in QCBS, are applicable in this case also.
Quality Based Under QBS method, the Systems Implementation Agency / System
Selection (QBS) Integrator who has secured first rank in technical evaluation alone shall
be called for further negotiation after opening and evaluation of its
financial proposals. The QBS method is not to be used under normal
circumstances.
However this should be preferred before going for “Nomination” based
procurement decision and vendor selection. The Points as mentioned in
QCBS above, are applicable in this case also.
Value for Money In such a procurement asking the following questions assists to assess
Procurement (VfM) value for money:
• Which option will contribute the most to advancing particular
Government priorities?
• What non-cost factors can benefit the Government and affect
value for money?
• What is the real cost of the eGovernance goods and/or services
versus that being offered?
The Points as mentioned in QCBS, are applicable in this case also.
Swiss Challenge The prospective purchaser shall provide an in-principle approval after
examination of the proposal received and if prima-facie merit to be
acceptable, it requests for a detailed proposal from the project
proponent. The purchaser must exercise necessary diligence of the
detailed proposal before proceeding further to evaluate:
i. Whether the project falls into the purview of the department’s
development plans
ii. Whether "Public Need" is established
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iii. Whether there is any ongoing process (PPP or otherwise), that

is addressing the same public need
iv. If response to (i) & (ii) above are in the affirmative and response
to (iii) is negative, examine whether the project is “innovative”
or “suo-moto”;
v. social impact
vi. Total investment required
vii. Project financials; and
viii. Bidding parameters
ix. Whether the proposal prima facie satisfies the public need;
Open bidding: An open bidding shall be done by the concerned

authority inviting bids from various organizations and contract
awarded to the bidder providing the best financial offer. However, the
project proponent shall be given an opportunity to match the counter
proposal received by the lowest bidder.
9.3.1 Cost Based Selection
This method will be used when the assignment is simple and can be precisely defined,
and when the budget is fixed. The RFP should indicate the available budget and request
the Systems Implementation Agencies / System Integrators to provide their best
technical and financial proposals in separate envelopes, within the budget. TOR should
be particularly well prepared to make sure that the budget is sufficient for the Systems
Implementation Agencies / System Integrators to perform the expected tasks.
In this case, the Purchaser should be cautious about the risk that bidders who have not
understood the scope of work OR may be targeting to get the work order without
having the technical competence to execute the project. This risk can be mitigated by
having a rigorous evaluation of the technical bid and fixing a high score as minimum
qualification for opening of financial bid.
Evaluation of all technical proposals shall be carried out first. Then all the bidders
meeting the minimum technical scores shall be announced as qualified in public before
opening the price proposal. The financial bid of the disqualified bidder shall not be
opened and returned post the tendering process. In the similar manner, the price
proposals shall be opened in public and prices shall be read out aloud. The Systems
Implementation Agency / System Integrator who has the minimum value of the
financial bid will be declared as the most responsive bidder for the award of the tender.
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9.3.2 Quality Cum Cost Based Selection
QCBS uses a competitive process among firms that takes into account the knowledge
/expertise of the firm reflected through quality of the proposal and the cost of the
services in the selection of the successful firm. Cost, as a factor of selection, is to be used
judiciously. The relative weight to be given to the quality and cost will be determined
for each case, depending on the nature of the assignment.
The weight associated with Quality i.e. Technical Proposal may be as high as 80% and
that associated correspondingly with cost i.e. Financial Proposal may be 20%. However
the most common & effective QCBS which may be used in 70:30 (Technical Score
weightage: Financial Score Weightage).
Evaluation of all technical proposals shall be carried out first. Then the technical scores
shall be announced in public before opening the price proposal. In the similar manner,
the price proposals shall be opened in public and prices shall be read out aloud. The
Systems Implementation Agency / System Integrator who has the maximum combined
score of Technical and Financial scores will be declared as the most responsive bidder
for the award of the tender.
9.3.3 Selection under A Fixed Budget (FBS)
This method is appropriate only when the assignment is simple and can be precisely
defined and when the budget is fixed. The RFP shall indicate the available budget and
request the Systems Implementation Agencies / System Integrators to provide their
best technical and financial proposals in separate envelopes, within the budget.
Evaluation of all technical proposals shall be carried out first as in the QCBS method.
Then the price proposals shall be opened in public and prices shall be read out aloud.
Proposals that exceed the indicated budget shall be rejected. The Systems
Implementation Agency / System Integrator who has submitted the highest ranked
technical proposal among the rest shall be selected and invited to negotiate a contract.
This is relevant for the situations in which eGovernance procurements are done
wherein the DPR and the funding gets approved prior to the tendering process.
9.3.4 Quality Based Selection
QBS is used in the following types of assignments:
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a. Complex or highly specialized assignments for which it is difficult to

define precise TOR and the required input from the Systems
Implementation Agencies / System Integrators, and for which the client
expects the Systems Implementation Agencies / System Integrators to
demonstrate innovation in their proposal
b. Assignments that have a high downstream impact and in which the

objective is to deploy the services of the most eminent expert; and
c. Assignments that can be carried out in substantially different ways, such

that proposals will not be comparable
Evaluation of all technical proposals shall be carried out first. Then the technical scores
shall be announced in public before opening the price proposal. In the similar manner,
the price proposals shall be opened in public and prices shall be read out aloud. The
Systems Implementation Agency / System Integrator who has the maximum Technical
scores is invited for discussions and possible negotiation on scope of work and costs.
The Financial bids of other bidders are not opened.
9.3.5 Value for Money Based Selection
This is an advanced and mature way of procurement, where the focus in on the
comparison of the total cost/benefit. In such procurement asking the following
questions assists to assess value for money:
 Which option will contribute the most to advancing particular

Government priorities?
 What non-cost factors can benefit the Government and affect value for
money?
 What is the real cost of the eGovernance goods and/or services versus
that being offered?
 What is the Overall Power Consumption (in both ideal and running
condition).
 What is the Overall TCO (including all the licensing cots)
 What is the Ruggedness/quality of solution used
 What is the processing speed used in the solution
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 What is the max up-time quoted by OEMs for servers
 What is the future roadmap of quoted product by OEMs.
In this manner of procurement, the technical and financial bids are open simultaneously
and evaluated. This should be applied in selective cases for large & complex projects
and where the exact budget is yet to be finalized.
All the tenders are to be evaluated strictly on the basis of the terms & conditions
incorporated in the tender enquiry document (based on which offers have been
received) and the terms, conditions etc. stipulated by the tenderers in their tenders. No
new condition should be brought in while evaluating the tenders. Similarly, no tender
enquiry condition (specially the significant/essential ones) should be over looked while
evaluating the tenders. Aim should be to ensure that no tenderer gets undue advantage
at the cost of other tenderers and/or at the cost of the purchaser.
9.3.6 Swiss Challenge
Swiss challenge is a form of public procurement which entails a private sector

enterprise in identifying a project and then submitting the proposal to the government.
Considering the increasingly proprietary nature of technology projects, the procedure
for handling unsolicited proposals should follow a four stage method wherein:
a) Receipt of unsolicited/innovative proposal: To be considered as a swiss
challenge, the proposal submitted by the project proponent should be (a) an
unsolicited proposal and (b) innovative in the nature of services or eGovernance
goods to be provided.
b) Approval from the concerned authority: The prospective purchaser shall provide
an in-principle approval after examination of the proposal received and if prima-
facie merit is found request for a detailed proposal from the project proponent.
The purchaser must exercise necessary diligence of the detailed proposal before
proceeding further to evaluate:
i. Whether the project falls into the purview of the department’s
development plans
ii. Whether "Public Need" is established
iii. Whether there is any ongoing process (PPP or otherwise), that is
addressing the same public need
iv. If response to (i) & (ii) above are in the affirmative and response to (iii) is
negative, examine whether the project is “innovative” or “suo-moto”;
v. Whether the proposal prima facie satisfies the public need;
vi. social impact
vii. Total investment required
viii. Project financials; and
ix. Bidding parameters
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c) Open bidding: An open bidding shall be done by the concerned authority

inviting bids from various organizations and contract awarded to the bidder
providing the best financial offer. However, the project proponent shall be given
an opportunity to match the counter proposal received by the lowest bidder.
9.4 Preliminary Examination
The purchase officer nominated for handling the tenders for initial scrutiny etc. will
receive the tenders along with other documents from the tender opening officials in a
manner as described earlier in this manual. In this context, it should be ensured that no
tender is rejected by the tender opening officials at the tender opening stage; they are to
open all the tenders as received and send them to the purchase officer as prescribed
above.
9.4.1 All the tenders so received will first be scrutinized (as per the processes laid
down for the Single or Two Stage bidding) to see whether the tenders meet the
basic requirements as incorporated in the tender enquiry document. The tenders,
who do not the meet the basic requirements, are to be treated as unresponsive
and ignored.
The following are the important points which can be discovered at any stage of the
evaluation of the bids, for which a tender may be declared as unresponsive and to be
ignored, during the initial scrutiny:
(i) The tender is unsigned.
(ii) The tenderer is not eligible.
(Example: The tender enquiry condition says that the bidder has to be a CMMI Level 5
certified; but the tenderer is a, say, ISO 9000 Certified).
(iii) The tender validity is shorter than the required period.
(iv) Required EMD has not been provided.
(v) The tenderer has quoted for goods manufactured by a different firm or without
the required signed Manufacturer Authority Form (MAF) from the proposed
manufacturer.
(vi) Tenderer has not agreed to give the required performance security.
(vii) The products/technology quoted are sub-standard and does not meeting the
required specification etc.
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(viii) Against a schedule in the List of Requirement/unpriced Bill of Material

(incorporated in the tender enquiry), the tenderer has not quoted for the entire
requirement as specified in that schedule.
(Example: In a schedule, it has been stipulated that the tenderer will implement a
solution and also conduct training for the employees for using the system. The tenderer
has however, quoted only for implementation of the solution).
(ix) The tenderer has not agreed to some essential condition(s) incorporated in the
tender enquiry. (Example: Some such important essential conditions are – terms
of payment, liquidated damages clause, warranty clause, dispute resolution
mechanism, applicable law and any other important condition having
significant bearing on the cost/utility/performance of the required goods, etc.
9.4.2 During the above preliminary examination, the purchaser may also find some
minor informality and/or irregularity and/or non-conformity in some tenders.
The purchaser may waive the same provided the same does not constitute any
material deviation and financial impact and, also, does not prejudice or affect the
ranking order of the tenderers. Wherever necessary, the purchaser is to convey
his observation on such ‘minor’ issues (as mentioned above) to the tenderer by
email etc. asking the tenderer to respond by a specified date also mentioning
therein that, if the tenderer does not confirm the purchaser’s view or does not
respond at all by that specified date, its tender will be liable to be ignored.
Depending on the outcome, such tenders are to be ignored or considered further.
(Example : A tender enquiry stipulates, as an essential condition, that the tenderer,

along with its quotation, must also submit a certified copy of its annual turnover as a
certificate or as Audited Financial Statement . If a tenderer does not provide this
document, the purchaser may ask for it with target date as above. If, the tenderer does
not respond by that target date, its offer will be liable to be ignored).
9.4.3 Non-conformities between the figures and words of the Quoted Prices –
Sometimes, non-conformities/errors are also observed between the quoted prices
in figures and that in words. The same is to be taken care of as indicated below:
(a) If, in the price structure quoted for the required eGovernance goods, there is
discrepancy between the unit price and the total price (which is obtained by
multiplying the unit price by the quantity), the unit price shall prevail and the
total price corrected accordingly, unless in the opinion of the purchaser there
is an obvious misplacement of the decimal point in the unit price, in which
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case the total price as quoted shall govern and the unit price corrected
accordingly.
(b) If there is an error in a total corresponding to the addition or subtraction of

subtotals, the subtotals shall prevail and the total shall be corrected; and
(c) If there is a discrepancy between words and figures, the amount in words
shall prevail, unless the amount expressed in words is related to an arithmetic
error, in which case the amount in figures shall prevail subject to (a) and (b)
above.
If there is such discrepancy in an offer, the same is to be conveyed to the tenderer with
target date on the above lines and if the tenderer does not agree to the observation of
the purchaser, the tender is liable to be ignored.
9.4.4 Discrepancies between original and additional copies of a Tender - Sometimes

discrepancies are also observed between the original copy and the other copies of
the same tender set. In such a case, the text etc. of the original copy will prevail.
Here also, this issue is to be taken up with the tenderer in the same manner as
above and subsequent actions taken accordingly.
9.4.5 All the actions mentioned in abovementioned paragraphs should have the
approval of the competent authority at appropriate stages.
9.4.6 Details of all the tenderers, which have been declared unresponsive and to be
ignored as per above analysis and, also, the grounds for their becoming
unresponsive are to be accurately recorded in the purchase file.
9.5 Qualification Criteria
After completing the stage as per above, it is to be examined whether the remaining
tenderers (i.e. other than the unresponsive tenderers) meet the required qualification
criteria incorporated in the tender enquiry document. The tenderers, which do not meet
the required qualification criteria are to be declared unresponsive and not to be
considered further. Details of such tenderers, which do not meet the required
qualification criteria are also to be recorded in the purchase file along with the grounds
for their becoming unresponsive.
Note: However, in case of Two Stage Bid System, the technical acceptability of the offers
are first determined and, thereafter, the financial bids of only the technically acceptable
offers are opened for further scrutiny and processing for placement of contract. In most
of the bids, the technical evaluation (and qualification) happen in two Steps :
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Step 1 : The evaluation of the bidder is carried out against a pre-qualification

requirement. The Technical bids of the bidders who meet the pre-qualification
requirements are opened.
Step 2 : Post evaluation of Technical bids, the bidder who meet the minimum threshold
marks are considered as eligible for further evaluation as per the evaluation
methodology specified in the tender enquiry document.
9.6 Conversion of Currencies
Depending on the terms of delivery and the projected requirement, all the applicable
components of the costs, as quoted in the responsive tenders, are to be added to work
out the ultimate evaluated costs of the tenders. The evaluation is also to include
applicable taxes, duties etc. in the tender prices.
If offers have been received containing different currencies (as in the case of purchasing
imported eGovernance goods), all the quoted prices (with different currencies) are to be
converted into a single currency for evaluation and comparison of offers on equitable
basis. For this purpose, all such quoted prices are to be converted into Indian rupees, as
per the selling exchange rates established by a competent authority (like RBI/SBI) as
prevailing on a particular date to be specified in the tender enquiry. Generally, this date
is the date of tender opening.
9.7 Evaluation and Ranking
9.7.1 The responsive tenders (i.e. after ignoring all the unresponsive tenderers as
above) are to be evaluated and ranked as per the procedure indicated above
depending on the manner of evaluation – CBS, QCBS, FCS, QBS and VfM.
9.7.2 After completing the entire evaluation process for the responsive tenders on
equitable basis as above, they are to be entered into a ranking statement in
ascending order of the responsiveness (which has been clearly mentioned in the
RFP and the manner for calculation of the same depending on whether it is CBS,
QCBS, FCS or VfM) so that a clear picture of their standing.
9.7.3 Lack of Competition – Sometimes the purchase organization may not receive
sufficient number of tenders. A situation may also arise where, after analyzing
the tenders, the purchase organization ends up with one responsive tenderer. In
such situations, the purchase organization is first to check whether, while
floating/issuing the tender enquiry, all necessary requirements like standard
tender enquiry conditions, industry friendly specification, wide publicity,
sufficient time for formulation of tenders, etc. were fulfilled. If not, the tender is
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to be re-issued/re-floated after rectifying the deficiencies. However, if after

scrutiny it is found that all such aspects were fully taken care of and in spite of
that the purchaser ends up with one responsive tender only, then contract may
be placed on that tenderer provided the quoted price is reasonable. If not, the
tender has been re-issued/re-floated after rectifying the deficiencies and still
there is a single bid, then contract may be placed on that tenderer provided the
quoted price is reasonable.
9.8 Award of Contract
Before expiry of the tender validity period, the purchase organization shall notify the
successful tenderer in writing, by suitable foolproof method, that it’s tender (referring
to the tender No.) has been accepted (Letter of Intent). In the same communication, the
successful tenderer is to be instructed to furnish the required Performance Security
within a specified period (generally 21 days or as specified in the tender). Promptly
after the above notification, the purchase organization is also to issue the contract to the
successful tenderer asking therein, inter alia, to send its unconditional acceptance of the
contract within fifteen days. It should also be made known to the successful tenderer
that in case, it does not furnish the required performance security or does not accept the
contract within the stipulated target dates, such non-compliance will constitute
sufficient ground for forfeiture of its EMD and processing the case for further action
against it (the successful tenderer).
9.9 Publication of Tender Result
The name of the successful tenderer awarded the contract should be mentioned in the
notice board/bulletin/web site of the concerned Ministry/Department.
9.10 Return of EMD to Unsuccessful Tenderers
The EMDs of the unsuccessful tenders are to be returned to them without any interest,
whatsoever.
9.11 Tenderer’s Right to question Purchaser
A tenderer shall have the right to be heard in case it feels that proper procurement
process is not being followed and/or its tender has been rejected wrongly. The tenderer
is to be permitted to send its representation in writing, which is to be examined by
appropriate administrative authority of the purchasing Ministry/Department. But, such
representation has to be sent within one month from date of placement of contract and
to be replied (by the Ministry/Department) within one month from date of receipt of
the representation.
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However, to discourage frivolous complaints, a non-refundable fee of suitable amount

(0.5% of the tender amount) should be paid to the Purchaser.
9.12 Extension of Tender Validity Period
The entire process of scrutiny & evaluation of tenders, preparation of ranking statement
and notification of award must be done within the original tender validity period. The
validity period should not be unreasonably long as keeping the tender unconditionally
valid for acceptance for longer period entails the risk of getting higher prices from the
tenderers. Generally, the validity period should not be more than three to six months
from the date of tender opening.
If however, due to some exceptional and unforeseen reasons, the purchase organization
is unable to decide placement of the contract within the original validity period, it
should request, before expiry of the original validity period, all the responsive tenderers
to extend their tenders upto a specified period. While asking for such extension, the
tenderers are also to be asked to extend their proposal as it is, without any changes
therein. They may also be told to extend the validity of the EMD for the corresponding
additional period (which is to be specified in the request). A tenderer may not agree to
such a request and this will not tantamount to forfeiture of its EMD. But the tenderers,
who agree to extend the validity, are to do so without changing any terms, conditions
etc. of their original tenders.
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10 CONTRACT MANAGEMENT
10.1 Introduction
Contract Management involves monitoring the implementation of a contract after it is

placed to ensure timely completion of all the supplies and related services shown in the
contract as per terms & conditions incorporated therein.
10.2 Text of Contract
The very first requirement for ensuring a trouble free contract management is
placement of contract with unambiguous and transparent terms & conditions, which
have already been agreed to by both the purchaser and the supplier in black & white.
The purchaser is to ensure that the supplier receiving the contract furnish the required
Performance Security in the prescribed form by the specified date, failing which
necessary action including forfeiture of the Earnest Money Deposit is to be taken against
the supplier.
10.4 Acknowledgement of Contract
The supplier should acknowledge and unconditionally accept the contract within
the specified days from the date of issue of contract. While acknowledging the
contract, the supplier may raise some issues and/or ask for some modifications against
some entries in the contract; such aspects shall be immediately looked into for
necessary action and, thereafter, supplier’s unconditional acceptance of the contract
obtained.
If both the parties (viz. the purchaser and the supplier) simultaneously sign the
contract across the table, further acknowledgement from the supplier is not required.
10.5 Coordination
All the authorities, who are entrusted with some responsibilities and also to perform
some duties in terms of the contract are to work in unison in a coordinated
manner to ensure completion of the contract without any time overrun, cost
overrun and related legal complication. It is, therefore, necessary for the purchase
organization to keep a proper watch and coordinate all such activities to avoid any
bottleneck or problem in the passage of the contract.
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10.6 Amendment to Contract
Many a times, due to various reasons, changes and modifications are needed even
in a duly concluded contract. Requests for such changes and modifications mostly
emanate from the supplier. Immediately on receiving such a request, the purchase
organization shall examine the same and take action as necessary with the approval of
the competent authority.
A detailed process for affecting an amendment to the contract has been laid out in the
next chapter (i.e. Change Requests) which covers amendments of legal, financial and
non-financial changes.
10.7 Payment to the Implementation Agency
Purchase organization shall ensure that all the payments due to the firm including
release of performance security are made on priority basis without avoidable delay.
An appropriate time schedule may be prescribed by the Ministry / Department for
this purpose to be acted upon by the concerned officials.
It is appreciated that the Implementation agencies are commercial organizations and

there is a cost which they have to carry for the working capital. Hence, in case the
delays are not attributable to the Implementation agency, the Implementation agency
should compensated for any such delays. The interest payable should be benchmarked
to a rate which is linked to the cost of borrowing for organizations or interest charged
by the Government on delayed tax payment or linked to the SBI PLR rate9.
10.8 Monitoring of Securities and other Instruments
Proper procedure for safe custody and monitoring of bank guarantees and other
instruments should be laid down by the Ministry/Department and followed
accordingly.
10.9 Closure of Purchase File
9
Under Consideration of M/o Finance
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On completion of all activities against a contract, the purchase file should be

preserved in the record room and destroyed after expiry of the applicable
mandatory retention period with the approval of the competent authority.
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11 CHANGE REQUESTS
11.1 Change Requests
To take care of any change in the requirement during the period of the contract, there
could be situation wherein changes in the scope of work become necessary. These are
cases wherein there is a situation like vendor lock-in but within the period of the
contract.
These situations should be dealt with objectivity and fairness and should not be
considered to undue push the Implementation agency to undertake work or take risks
which was not explicitly communicated in the tender document and at the same time
the vendor should not consider it an opportunity to undue charge the procurer due to
lack of available options. Generally, the value of the change request should not be more
than plus/minus fifteen percent.
For a large and complex project, it is advisable that certain amount of effort should be
budgeted for software change requests in the financial bid itself. The amount budgeted
against this effort should be payable to the Implementation Agency against the actual
utilization of the effort. Exercising this option by the Implementation Agency should be
done on the basis of written requests from the procurer. This would provide flexibility
at an operational level and should not be more than plus/minus fifteen percent of the
software development costs per year in line with the industry trends.
Change Control mechanisms help address issues pertaining to:
 what is considered a change
 Need for a change – business case/justification
 what is the nature/type of change
 what is the possible change impact
 what is the effort estimation to execute the change
Below is an approach/framework, which can be followed to better manage Change

Requests
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11.2 What constitutes a Change request :
Scope Any stakeholder of the project can submit the following types of
issues to the change control system:
 requests for requirements changes (additions, deletions,
modifications, deferrals) in Scope of work (including software)
currently under development
 reports of problems in current production or beta test systems
 requests for enhancements in current production systems
 requests for new development projects
This change control process applies to baselined work products

created or managed by the members of the project team, including:
 software that has been released to production or is in beta test

 requirements specifications for project
 group procedures and processes
 user and technical documentation
The following work product classes are exempted from this change
control process:
 work products that are still under development, except for
requirements changes requested in new projects
 interim or temporary work products created during the course
of a project
 any work products intended for individual use only
11.3 Institutional structure proposed to implement the Change Control
Role Description
Change Control Board Chairperson of the change control board; has final decision-making
Chairperson authority if the Client/Government department/Purchaser does
not reach agreement; deputes a member from the Board to be the
Evaluator for each change request and asks additional member to
be the Modifier for each approved change request
Change Control The group that decides to approve or reject proposed changes for a
Board/Government specific project. It should comprise of experts from academics and
Department/Purchaser industry. The independence and expertise of the group is a critical
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Role Description
factor for the success of the exercise. The Implementation Agency
should agree with the Board constituted and should undertake to
agree to the decision of the board before the process getting
initiated.
Evaluator The person whom the Client/Government department/Purchaser
asks to analyze the impact of a proposed change
Originator The person who submits a new change request
Project Manager The person who is responsible for overall planning and tracking of
the development project activities
Verifier The person who determines whether a change was made correctly
11.4 Procedure to affecting the Change Request
1 The Originator submits a valid issue or change request with all necessary
information to the Client/Government department/Purchaser and the
implementation agency (Originator can be either the Implementation agency or the
Procurer)
2 The Client/Government department/Purchaser deputes an Evaluator within the

department (or external but representing the Government).
3 The Evaluator assesses the issue as to feasibility, whether it really pertains to the
indicated project, whether a reported problem can be reproduced. In case this has
financial implications, the same is communicated by the evaluator.
4 In case of financial implications, a Change control Board and its chairman is

appointed. It should comprise of experts from academics and industry. The
independence and expertise of the group is critical for the success of the exercise.
The Implementation Agency should agree with the Board constituted and should
undertake to unconditionally agree with the decision of the board before the process
getting initiated.
5 The board may further take help of experts to evaluate the effort required to make
the changes.
6 In case the change involves new/additional software, the method of calculating the
effort has to be indicated by the Board. This may use Functional Point Analysis or
any other method relevant like Test Point Analysis, Use Case Analysis etc. or a
combination thereof.
7 The board review the method of calculation of the effort and also seeks a feedback of
the Implementation agency on the calculations for estimating the effort.
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8 The board finally establishes the effort required and the man-month rate to be
deployed for calculation of the financial impact of the change requests.
9 On the basis of the financial impact, the procurer/Client/Government

Department/Purchaser decides whether the requested change should be made (or
the reported problem fixed) at this time, at some point in the future, or not at all.
Input should be solicited from others potentially affected by the change before
making the decision.
If the change is accepted, the Board communicates its decision to the procurer and the
Implementation agency.
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12 SETTLEMENT OF DISPUTES
12.1 General
Normally, there should not be any scope of dispute between the purchaser and the
supplier after entering into a mutually agreed valid contract. However, due to various
unforeseen reasons, problems may arise during the progress of the contract leading to
disagreement between the purchaser and the supplier. Therefore, the conditions
governing the contract shall contain suitable provision for settlement of such disputes /
differences binding on both the parties.
12.2 Mode of Settlement
Dispute Resolution / Arbitration process
The objective of any contract's dispute resolution mechanism is generally to achieve a

workable business solution between the contracting Parties, before resorting to formal
procedures, such as arbitration or litigation. The Purchaser and Bidders should attempt
to resolve issues prior to getting caught in legal issues.
There are various steps of informal dispute avoidance and resolution procedures. These
may be considered for including in the contract agreement.
Appointment of Mediators/Arbitrators: Empanelment of expert Mediators having

experience of delivering Technology Projects in the Government and Private sector
must be undertaken by the Purchaser organizations. These mediators would be in a
better position to resolve Government and Industry concerns being aware of the
peculiarities of large scale IT implementation.
STEP 1: Internal Escalation
The Parties should attempt to resolve disputes between themselves. If an issue cannot
be settled under a more formal structure for the Parties to attempt to resolve their
differences.
The major difference between this provision and the Project Management Procedure is
that the Project Management Group is in place and holding periodic progress meetings
as a forum in the project for avoiding disputes throughout the Contract Period, whereas
the people involved in the internal escalation procedure may be brought in to the
project to decide a pre-existing issue between the Parties ("Dispute").
The internal escalation procedure works by escalating the Dispute through various
levels within the Purchaser, and corresponding levels within the Vendor’s organization,
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starting with the Parties' Representatives, then the project team leader and the Vendor’s
counterpart, then a member of the Purchaser’s Executive Board (or equivalent) and a
director of the Vendor. The intention behind this internal escalation Clause is that if the
Dispute cannot be resolved at a lower level, a more senior person will be able to take a
strategic view.
The success of such internal escalation can work only when both the parties are
represented by people who can take decisions including those of Financial in nature.
This may be a challenge for a Purchaser to take financial decision in such a meeting,
hence such meetings should involve pre-work, from both the parties which should
involve the following :
1. Understanding the key reason for the dispute and the responsibility. The
potential reasons should be attributable to the Vendor OR Purchaser OR both
depending on the understanding of the information provided in the RFP
document, Proposal and subsequent instruction/ decision.
2. The commitments made by the Purchaser either in the RFP document or in

project meetings earlier
3. The commitments and assumptions made by the vendor in their proposal
4. Establishing the deviations made by either of the parties from
a. the written commitments made by the Vendor or the Purchaser in

meetings or letters
b. the assumptions in the Approach & methodology, Solution, Work Plan of

the Vendor & Purchaser
c. Comparing with other similar projects (if relevant)
d. any previous communication made by either of the party on the identified

deviations and the reasons thereof
e. any unforeseen
5. Based on the above, the potential resolution should be classified as either

Financial OR Non-Financial
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6. In case the potential resolution involves financial consideration, the financial

impact of such a deviation for either of the party should be computed on the
basis of Commercial Proposal or industry standards.
Based on the above, both parties should attempt as a resolution.
If internal escalation does not resolve the Dispute, the Parties can either agree to
mediation (see below) or proceed directly to Adjudication/Expert Determination or
Arbitration.
The Parties must arbitrate the Dispute if it relates to Changes and Change in Law,
Security, Compensation on Termination, unless they agree to resolve the Dispute using
Adjudication/Expert Determination.
Arbitration is not used for other types of Dispute as it is generally a more complex,
costly and lengthy process than Adjudication/Expert Determination and its additional
features are not needed for these other types of Dispute which will be decided by
Adjudication/Expert Determination if they are not resolved by internal escalation or
mediation.
STEP 2: Mediation
If the Parties cannot reach agreement using the internal escalation provisions within 20
Business Days of any internal escalation meeting, the next step may be for the dispute to
be referred to mediation. Mediation is, however, not a binding step in the Dispute
Resolution Procedure and can only be undertaken on a consensual basis.
Mediation is a process whereby an independent mediator seeks to facilitate a

settlement, but he will not make a decision. Instead, the mediator hears the Parties'
arguments and tries to make sure they consider their commercial interests and deal
with what is necessary to achieve a settlement. As mediation is (in effect) a form of
subtle diplomacy, the co-operation of the Parties to the process is necessary – a
mediator cannot compel either Vendor or the Purchaser to do anything they do not
wish to do.
If mediation fails, or the Parties do not agree to mediate, the next step to resolve the
Dispute is either Adjudication/Expert Determination or Arbitration, depending on the
nature of the Dispute.
STEP 3: Adjudication/ Expert Determination
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Adjudication/Expert Determination is similar to arbitration in that a single person

decides the Dispute, but the procedures are less complex than for arbitration and the
costs of deciding the Dispute are therefore likely to be lower.
Adjudication/Expert Determination is contractual adjudication, which differs from the

statutory adjudication imposed on the Contractor by the Housing
Expert determination is a procedure in which a dispute or a difference between the

parties is submitted, by agreement of the parties, to one [or more] experts who make a
determination on the matter referred to it [them]. The determination is binding, unless
the parties agreed otherwise.
Notable features of expert determination are:
i. Expert determination is consensual: Expert determination can only take place if

both parties have agreed to it. In the case of future disputes/differences arising
under a contract, the parties insert an expert determination clause in the relevant
contract. An existing dispute/difference can be referred to expert determination
by means of a submission agreement between the parties. In contrast to
mediation, a party cannot unilaterally withdraw from expert determination.
ii. The parties choose the expert(s) with relevant expertise: The parties can select
an expert together. If the parties have not agreed on the person of the expert or
on a different procedure for appointing the expert, the expert will be appointed
by the Center after consultation with the parties. The Center has access to experts
with specialized knowledge relevant to intellectual property issues in a broad
range of technical and business areas. This allows the Center to propose and
appoint the appropriate experts for the matter referred to.
iii. Expert determination is neutral and flexible: In addition to their selection of an

expert with appropriate qualifications, the parties are able to choose such
important elements as the language of the expert determination or the place of
any meeting.
iv. Expert determination is a confidential procedure: Subject to specifically defined

exceptions, the confidentiality of the existence of the expert determination, any
disclosures made during that procedure, and the resulting determination.
v. The determination of an expert is binding, unless the parties agree otherwise:

In principle, the determination of an expert is binding and as such it has
93
contractual effect between the parties. Alternatively, by party agreement, the

determination may have effect as a recommendation to the parties.
vi. Expert determination is a flexible procedure: Expert determination can operate

on a more informal and expeditious manner than broader processes such as
arbitration. Expert determination may be used on a stand-alone basis or in
connection with an arbitration, mediation or court case.
STEP 4: Arbitration
The provisions of the Arbitration and Conciliation Act, 1996 will be applicable and the
award made there under shall be final and binding upon the parties hereto, subject to
legal remedies available under the law. Such differences shall be deemed to be a
submission to arbitration under the Indian Arbitration and Conciliation Act, 1996, or of
any modifications, Rules or re-enactments thereof.
Mode of settlement of such disputes/differences shall be through Arbitration.

However, when a dispute/difference arises, both the purchaser and the supplier shall
first try to resolve the same amicably by mutual consultation. If the parties fail to
resolve the dispute by such mutual consultation within twenty-one days, then,
depending on the position of the case, either the purchaser or the supplier shall give
notice to the other party of its intention to commence arbitration as hereinafter
provided:
i) When the contract is with domestic supplier, the applicable arbitration

procedure will be as per Indian Arbitration and Conciliation Act, 1996.
ii) When the contract is with foreign supplier, the supplier has the option to
chose either Indian Arbitration and Conciliation Act, 1996 or
Arbitration in accordance with the provision of UNCITRAL (United
Nations Commission on International Trade Law) Arbitration
Rules.
12.3 Venue of Arbitration
The venue of arbitration shall generally be the place from where the contract has been
issued except when foreign supplier opts for Arbitration, in accordance with the
provision of UNCITRAL, Arbitration Rules, the venue can be a neutral country.
12.4 Applicable Law
The contracts shall be interpreted in accordance with the laws of the Union of India.
94
12.5 Legal Advice
While processing a case for arbitration, the purchase organization is to take legal advice,
at appropriate stages from competent authorities like the Ministry of Law.
95
13 RATE CONTRACT
13.1 Definition
A Rate Contract (commonly known as RC) is an agreement between the purchaser and
the supplier for supply of specified IT products (and allied services if any) at specified
price and terms & conditions (as incorporated in the agreement) during the period
covered by the Rate Contract. No quantity is mentioned nor any minimum drawal is
guaranteed in the Rate Contract. The Rate Contract is in the nature of a standing offer
from the supplier firm. The firm and/or the purchaser is entitled to withdraw/cancel
the Rate Contract by serving an appropriate notice on each other. However, once a
supply order is placed on the supplier for supply of a definite quantity in terms of the
rate contract during the validity period of the rate contract, that supply order becomes a
valid and binding contract.
13.2 Merits of Rate Contract
The Rate Contract system provides various benefits to both the Purchaser (i.e. user) and
the Supplier and the same are indicated below:
13.2.1 Benefit to Users
a) Competitive and economical price due to aggregation of demands.
b) Saves time, efforts, man-hours and related costs involved in time

consuming as well as repetitive tendering process. It, thus reduces lead
time for procurement.
c) Availability of quality products/services with full quality assurance

back-up.
d) Enables procurement as and when required and thus reduces

inventory carrying cost.
e) Advantageous even to small users and those located in remote areas.
f) Provides one single point of contact to procure such items.
13.2.2 Benefit to Suppliers
a) Reduces marketing cost and efforts.
b) Eliminates repetitive tendering and follow-up actions with multiple

authorities.
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c) Provides single point contact for Govt. supplies.
d) Aggregation of Govt. demand leads to economic production.
e) Leads to most competitive prices being offered.
f) Lends credibility.
g) Promotes quality discipline.
13.3 Rate Contracts concluded by Central Purchase Organisation
The CPO has rate contracts with the registered suppliers, for IT Products/services of
standard types, which are identified as common user items and are needed on recurring
basis by various Central Government Ministries and Departments. CPO furnishes and
updates all the relevant details of the rate contracts in its web site. The Ministries or
Departments should operate those rate contracts to the maximum extent possible. In
case a Ministry / Department directly procures rate contracted eGovernance
goods/services from the suppliers, the prices to be paid for such eGovernance
goods/services shall not exceed those stipulated in the rate contract and the other
salient terms and conditions of the purchase should be in line with those specified in the
rate contract. The Ministry / Department may make its own arrangement for inspection
and testing of such eGovernance goods/services, where required. CPO posts the
descriptions, specifications, prices and other salient details of all the rate contracted
eGovernance goods/services, appropriately updated, on its web site for use by the
procuring Ministries/Departments.
13.4 Goods/Services for which Rate Contracts are carried out by CPO
a) Commonly used eGovernance goods/servcies needed on recurring basis

by various Ministries / Departments.
b) eGovernance Goods/services for which prices are likely to be stable or

where Rate Contracts could be finalized with provision of price
variations to account for fluctuation of market rates of raw materials etc.
c) eGovernance Goods/services for which Rate Contract is convenient to

operate and annual drawals are economical, say above Rs 25 lakhs.
NB: i) rate contracts are not concluded for (a) eGovernance goods of low value and
which are required by the users in very small quantities (b) for the scarce / critical/
perpetually short supply goods.
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13.5 Bringing more and more common user items on the Rate Contract
It is enjoined upon CPO to bring more and more common user items on rate contracts.
For this purpose, regular interactions should be held by CPO with the OEMs and the
user departments. There shall be a Standing Review Committee (SRC), coordinated by
CPO, consisting of representatives of major indenting departments, OEMs,
Implementation Agencies etc. to consider bringing new items on rate contacts.
13.6 Period of Rate Contract
The period of a Rate Contract is normally be one year for stable technology products.
However, in special cases, shorter or longer period may be considered. As far as
possible, termination period of rate contracts should be fixed in such a way as to ensure
that budgetary levies would not affect the price and thereby frustrate the contracts.
Attempts should also be made to suitably stagger the period of rate contracts through
out the year.
13.7 Criteria for award of Rate Contract
a) Rate Contracts shall be awarded to the firms who are registered for the
eGovernance goods/services in question and fulfill the laid down eligibility and
qualification criteria including service centres across the country etc. Suitable
stipulations are to be incorporated in the tender enquiry documents to this effect. In
respect of new items being brought on rate contract for the first time where there is no
registered supplier (for the subject items), the requirement of registration can be relaxed
with the approval of competent authority. The award of such rate contracts will,
however, be subject to the suppliers’ satisfactory technical and financial capability.
b) Some of the tenderers (who are otherwise registered for the eGovernance
goods/services) may also be holding current rate contracts and/or held past rate
contracts for the required eGovernance goods. Their performance against such
earlier/current rate contracts shall be critically reviewed before they are considered for
award of new rate contracts. Specific performance and achievement criteria as on a
selected cut-off date is to be evolved for this purpose and incorporated in the tender
enquiry document. The tenderers will be asked to furnish the relevant details (along
with their tenders) to enable the purchaser to judge their performance and achievement
against the past/current rate contracts. These criteria are to be evolved and decided by
the purchase organization during procurement planning stage for incorporation in the
corresponding tender enquiry documents.
98
13.8 Special Conditions applicable for Rate Contract
Some conditions of rate contract differ from the usual conditions applicable for ad hoc
contracts. Some such important special conditions of rate contract are given below:
i) Earnest Money Deposit (EMD) is not applicable.
ii) In the Schedule of Requirement, no quantity is mentioned; only the anticipated

drawal may be mentioned without any commitment.
iii) The purchaser reserves the right to conclude more than one rate contract for the
same item.
iv) The purchaser as well as the supplier may withdraw the rate contract by
serving suitable notice to each other. The prescribed notice period is generally
thirty days.
v) The purchaser has the option to renegotiate the price with the rate contract
holders.
vi) In case of emergency, the purchaser may purchase the same item through ad
hoc contract with a new supplier.
vii) Supply orders, incorporating definite quantity of eGovernance goods to be

supplied along with all other required conditions following the rate contract
terms, are to be issued for obtaining supplies through the rate contract.
viii) The purchaser and the authorized users of the rate contract are entitled to place
supply orders upto the last day of the validity of the rate contract and, though
supplies against such supply orders will be effected beyond the validity period
of the rate contract, all such supplies will be guided by the terms & conditions
of the rate contract.
ix) To the extent possible, to drive the best possible rates for the procuring agency,
the RC should be of base price at key regions across India. The transportation
charges should be additional from the regions specified in the RC.
x) The payment should be made on the basis of actual delivery rather than the
whole lot as this help in reducing the prices
The Central Purchase Organization should analyse the procurement made using the RC
over the years and thereafter work out a volume discount with the agencies. Further the
99
CPO should continuosly benchmark the prices with the retail prices and identify
reasons for any deviation (like delay in payment, SLAs, risks, margins etc.) and make
efforts to eliminate so that the prices are within comparable range.
13.9 Parallel Rate Contracts
In case it is observed that a single supplier does not have enough capacity to cater to the
entire demand of an item, the rate contract issuing authority may enter into more than
one rate contract with different suppliers for the same item. Such rate contracts are
known as Parallel Rate Contracts.
13.10 Conclusion of Rate Contracts including Parallel Rate Contracts
In the normal course, the rate contract is to be awarded to the lowest responsive
tenderer (L1). However, depending on the anticipated demand of the item, location of
the users, capacity of the responsive bidders, reasonableness of the prices quoted by the
responsive bidders, etc. it may become necessary to award parallel rate contracts also.
For this purpose, a reasonable price band above the L1’s price is to be decided and
parallel rate contracts awarded to the responsive tenderers falling within that price
band. Efforts should be made to conclude parallel rate contracts with suppliers located
in different parts of the country. For the sake of transparency and to avoid any criticism,
all such rate contracts are to be issued simultaneously.
13.11 Price Negotiation/Counter-Offer
Price Negotiation with the tenderers should be severely discouraged. However, in case
the price quoted by the lowest responsive tenderer (L1) is not reasonable and
acceptable, the price may be negotiated with L1 only and, if it reduces the price to the
desired level, rate contract may be concluded with L1.
There may be a situation, where parallel rate contracts are needed, but though the price
of L1 is reasonable, the number of responsive tenderers falling within the reasonable
price band is inadequate. To take care of such situation, CPO may resort to negotiation
and counter offering as indicated below:
To start with, the rate contract may be awarded to L1 tenderer. Then the price of L1 is to
be counter offered to the higher quoting responsive tenderers under intimation to L1
asking them to send their revised tenders in sealed covers to be opened in public at a
specified place, date and time (as per the standard procedure). L1 may be specifically
informed that it may, if it so desires, reduce its price and send its revised tender
100
accordingly as above. The tenderers who accepts the counter offer rate or rate lower
than that are to be awarded parallel rate contracts. If L1 lowers its rate in its revised
offer, same may also be accepted with effect from that date and its rate contract
amended accordingly.
There may also be a situation where parallel rate contracts are necessary, but even the
price of the lowest responsive tenderer (L1) is not reasonable. In that case, price
negotiation may be conducted with L1 in the first instance. If L1 agrees to bring down
the price to the desired level, rate contract may be concluded with it and that price
counter offered to other responsive tenderers under intimation to L1 for further action
in identical manner as indicated in the above paragraph. If, however, L1 does not agree
to reduce its price in the first instance itself, then the price, which has been decided as
reasonable may be counter offered to all the responsive tenderers (including L1) for
further action on above lines.
13.12 Cartel Formation / Pool Rates
Sometimes a group of tenderers quote identical rates against a rate contract tender.
Such Pool/Cartel formation is against the basic principle of competitive bidding and
defeats the very purpose of open and competitive tendering system. Such practices
should be severely discouraged with strong measures. Suitable administrative actions
like rejecting the offers, reporting the matter to Registrar of Companies, MRTP
Commission, CCI should be initiated against such firms, on case to case basis, as
decided by the competent authority. Ministries/Departments may also bring such
unhealthy practice to the notice of the concerned trade associations like NASSCOM etc.
requesting them, inter alia, to take suitable strong actions against such firms. The
Ministries/Departments may also encourage new firms to get themselves registered for
the subject eGovernance goods to break the monopolistic attitude of the firms forming
cartel.
13.13 Fall Clause
Fall clause is a price safety mechanism in rate contracts. The fall clause provides that if
the rate contract holder reduces its price or sells or even offers to sell the rate contracted
eGovernance goods following conditions of sale similar to those of the rate contract,
at a price lower than the rate contract price, to any person or organization during the
currency of the rate contract, the rate contract price will be automatically reduced with
effect from that date for all the subsequent supplies under the rate contract and the rate
contract amended accordingly. Other parallel rate contract holders, if any, are also to be
given opportunity to reduce their price as well, by notifying the reduced price to them
and giving them 15 (fifteen) days time to intimate their revised prices, if they so desire,
101
in sealed cover to be opened in public on the specified date and time and further action
taken as per standard practice.
However in the field of Information Technology, it is very difficult to benchmark the

prices under similar buying conditions as each hardware comes with related services,
SLAs, time etc. and hence it is difficult to enforce. Nevertheless this clause may be
retained to ensure a check on the prices offered by the bidders.
13.14 Implementation of fall clause
For implementation of the fall clause, the Central Procurement Organization should
maintain a repository of the eGovernance Goods and associated costs for each item for
the “Successful Bidders” in various eGovernance bids. An analysis of this data will
enable the Purchaser to arrive at the benchmark price to ensure compliance of vendors
to the fall clause.
Wherever CPP website is used for procurement, the price of each item should be asked
to be filled in the financial bid. This will provide a ready database to carry out the
analysis.
Since the prices of IT Goods and services are dependent on the terms and conditions of
the tender, endeavor has to be made to have a repository of rates provided by OEMs to
the SI with standard terms and conditions so that they could be compared.
Depending on the anticipated overall drawal against a rate contract and, also,
anticipated number of parallel rate contracts to be issued for an item, the Central
Purchase Organization shall consider obtaining performance security of reasonable
amount from the rate contract holders. A suitable clause to this effect is to be
incorporated in the tender enquiry documents. Performance Security shall, however,
not be demanded in the supply orders issued against rate contracts.
13.16 Renewal of Rate Contracts
It should be ensured that new rate contracts are made operative right after the expiry of
the existing rate contracts without any gap for all rate- contracted items. In case,
however, it is not possible to conclude new rate contracts due to some special reasons,
timely steps are to be taken to extend the existing rate contracts with same terms,
conditions etc. for a suitable period, with the consent of the rate contract holders. Rate
contracts of the firms, who do not agree to such extension are to be left out.
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Period of such extension should generally not be more than three months. Also, while
extending the existing rate contracts, it shall be ensured that the price trend is not lower.
13.17 Placement of Supply Orders
Supplies are to be obtained against a rate contract by placing on the rate contracted
firm supply order containing the quantity of the eGovernance goods to be
supplied and incorporating the prices and other relevant terms and conditions of the
rate contract. The officials placing such supply orders should be duly competent and
authorized to do so.
A supply order should generally contain the following important details:
(a) Rate Contract No. and date.
(b) Quantity. (Where there is more than one consignee, the quantity to be
despatched to each consignee is to be indicated).
(c) Price.
(d) Date of Delivery by which supplies are required.
(In the supply order, a definite delivery date based on the delivery period stipulated in
the rate contract is to be provided).
(e) Full address of the purchase organization along with telephone. No., Fax No.
and E. mail address.
(f) Complete and correct designation and full postal address of the
consignee(s)/goods receiving officer(s) along with telephone No., Fax No. and
E-mail address.
(g) Nearest Railway Siding (NRS) of the consignee(s).
(h) Despatch instructions
(i) Designation and address of the inspecting officer.
(j) Designation and address of the paying authority to whom the bills are to be
raised by the supplier
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14 STRATEGIC EMPANELMENT OF OEMs
Government is one of the largest customers for procuring of various IT Products & services.
Given the volume of purchases which are carried out by different arms of the Government and
the rapid pace with which the new technologies are coming up, it is suggested that DeitY
(directly or through its Central Purchase Organization) empanels OEMs for a list of IT Products
& services.
The difference between this exercise and the CPO rate contract is that the bidders can also
leverage the price offered by the OEMs. It is assumed that the Government will be able to
extract a volume discounts which in a normal case, the smaller bidder may not get while
bidding for an opportunity. Hence this would enable the Central government to ensure a
uniformity of rates, in addition to terms and conditions with regard to high value IT
procurements across the country.
The prices/rates will be dynamic and will get updated on the basis of negotiations based on the
benchmarking exercise carried out by the Central Purchase Organization and/or leveraging the
fall clause.
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Draft Manual On Policies and Procedures For Procurement in Egovernance

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Draft Manual On Policies and Procedures For Procurement in Egovernance

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DRAFT MANUAL ON POLICIES AND

PROCEDURES FOR PROCUREMENT IN

Ministry of Electronics & Information Technology (DeitY)

A&M Approach & Methodology

A/T Acceptance of Tender

AMC Annual Maintenance Contract

ATS Annual Technical Support

CCN Change Control Notes

COTS Commercially Off The Shelf

CPO Central Purchase Organization

CPSU Central Public Sector Undertaking

CSC Common Service Centre

CVC Central Vigilance Commission

DeitY Department of Electronics and Information Technology

EMD Earnest Money Deposit

EMS Enterprise Management System

EOI Expression of Interest

GFR General Financial Rules

GIS Geographical Information System

GoI Government of India

ICT Information and Communication Technology

INR Indian National Rupee

IP/IA Implementation Partner

LoA Letter of Award

LoI Letter of Intent

MIS Management Information System

MSDG Mobile Service Delivery Gateway

NeGP National eGovernance Plan

NSDG National Services Delivery Gateway

O&M Operations and Maintenance

OEM Original Equipment Manufacturer

PBG Performance Bank Guarantee

PSU Public Sector Undertaking

QCBS Quality Cum Cost Based Selection

RFP Request for Proposal

SDC State Data Centre

SLA Service Level Agreement

SOA Service Oriented Architecture

SOW Scope of Work

SSDG State Service delivery Gateway

STI Single Tender Inquiry

SWAN State Wide Area Network

ToR Terms of Reference

TPC Tender Purchase Committee

UAT User Acceptance Test

VAT Value Added Tax

2 EGOVERNANCE ARCHITECTURE, STANDARDS & SPECIFICATIONs ...................16

3 MODES OF PURCHASE, RECEIPT AND OPENING OF TENDERS .............................28

3.22 Responsibility of the Tender Opening Officials....................................................................37

4 EARNEST MONEY AND PERFORMANCE SECURITY ......................................................39

5 DEFINING PRE-QUALIFICATION AND TECHNICAL EVALUATION CRITERION 42

6 KEY CONTRACTUAL TERMS & CONDITIONS ....................................................................47

7 ELEMENTS OF PRICE AND TERMS OF PAYMENT ..........................................................61

7.5 Octroi and Local Taxes ................................................................................................................65

8 FINAL TESTING AND CERTIFICATION ..................................................................................68

9 EVALUATION OF TENDERS AND PLACEMENT OF CONTRACT................................70

11 CHANGE REQUESTS .......................................................................................................................86

12 SETTLEMENT OF DISPUTES ......................................................................................................90

12.2 Mode of Settlement .......................................................................................................................90

14 STRATEGIC EMPANELMENT OF OEMs ...............................................................................104

While there are manuals prescribed by various other Ministries/Departments, this

broader objectives of Transparency, impartiality and free competition supported by this