Purchase/Contract

Procedure

(PCP-2020)
Introduction(1.0)
➢ The objective of the PCP is to ensure transparency,
fairness, uniformity and efficiency in the procurement/
contract/ tendering process across SAIL Plants/units.
➢ The procedure is applicable to all purchases/contracts,
unless specified otherwise
➢ In exceptional cases, deviation may be permitted for
recorded reasons with the specific approval of Chief
Executive officers & reported to CVO & CMMG.
(Clause 1.4)
 Raising of Indents
Estimated Value
Preparation of Technical Specification
Scrutiny of Indents
Action on Indent By MM Deptt/Contract Cell
Selection of mode of tendering
Invitation to Tenders
Opening/Scrutiny/Order of Tenders
Post Contractual Activities

3
 RAISING OF INDENTS
Raising of Indents
(PCP-2020 Clause 2.1, 2.2
& 2.3)

Indents for Project / Indents for

Indents for
Contract cases / Capital / Purchase of
procurement of
AMR Schemes Materials
good and services

4
 RAISING OF INDENTS-CHECK POINTS

❖For Purchase/Job Contracts (Ref. PCP-2020 Clause, 2.1, 2.2 &

2.3 ) :
✓ In prescribed format
✓ maintain records electronically and generate reference numbers
online
✓ Signed by HOD.
✓ For splitting, Quantifiable factors (if any) should be mentioned
clearly.
✓ Required of sample (if needed) should be clearly mentioned.
✓ Also enclose the following:
• Check-list as per the prescribed proforma
• Justification for indented quantity
• Justification for Proprietary Items (For ST Proprietary case)
• Cost Estimate
5
 RAISING OF INDENTS-CHECK POINTS

❖ For Project / Contract cases / Capital / AMR Schemes

(Ref. PCP-2020 Clause 2.1 ,2.1.1 & 2.1.2 ) :
✓ For project/Contract cases/Capital/AMR schemes,
proposal will be initiated by Indenter and processed by
MM Dept./ Contract Cell/ Project Dept./ contract
operating authority / designated centralized agency
based on the scheme sanctioned by the management.
✓ Name of the suggested registered manufactures/
suppliers/ contractors may be indicated on the basis of
past experience.

6
 RAISING OF INDENTS –COMMON PITFALLS

✓ Signature of HOD was missing in Estimate,

Justification for proprietary case.
✓ Quantity Justification was not available.
✓ Remark for Order distribution was not available.
✓ Quantifiable Factors was not mentioned clearly.
✓ Vendor Name & Source mentioned in PR was not
proper (Errors).
 ESTIMATED VALUE–COMMON PITFALLS
✓ Indent/ Estimate was not signed by the HOD.
✓ LPP was not considered while preparing the Estimate for
frequently purchased items.
✓ Estimate not worked out by extrapolating the price or by
applying a uniform yearly compounded escalation over the
price of similar items purchased in recent years.
✓ Considered the LPP placed on emergency basis.
✓ Considered very old LPP while preparing the estimate.
✓ Cost of statutory fees was not taken into account while
preparing the estimate.
✓ Only one Budgetary offer was taken.
ESTIMATED VALUE –Check Points to avoid common pitfalls
 As per Clause 2.4.1 (a) of PCP-2020:
➢ For frequently purchased items the estimate shall be
based on the Last Purchase Price.
➢ Estimate should be realistic with adjustment for variations
in the prices of various elements.
 As per Clause 2.4.1 (b) of PCP-2020:
➢ Estimate for infrequently purchased items-
Technical Estimate should be prepared. Budgetary Offers
(original) may also be obtained, if needed.
 As per Clause 2.4.1 (c) of PCP-2020:
➢ Estimate for Proprietary items-
Based on recent LPP OR rates directly obtained from the
manufacturer.
9
ESTIMATED VALUE –Check Points to avoid common pitfalls
 As per Clause 2.4.1 (d) of PCP-2020:
➢ Job Contracts:
✓ Fresh estimate should be prepared for each indent.
Should not consider only the Last order value.
✓ To consider Job elements, Supplies, equipment, Tools
and Tackles, statutory obligations, overheads,
shutdowns involved etc.
 As per Clause 2.4.1 (e) of PCP-2020:
➢ Project Contracts:
✓ The initial estimate prepared by the consultant should
be examined by concerned officials and duly approved
by the tender approving authority.

10
 Preparation of Technical Specifications
Check Points to avoid common pitfalls
✓ Technical Specification should be clear, Non-
conflicting.
✓ Quantity should be worked out properly so that
post contractual deviations in quantity may be
avoided.
✓ As per PCP-2020 Clause 2.3.2 “The overall quality
of the jobs to be executed along with the expected
Performance Guarantees should be clearly
indicated in the indent.”
✓ Inspection Clause should be clearly mentioned in
the indent (PCP Clause 2.3.4)
 Preparation of Technical Specifications –Check
Points to avoid common pitfalls

✓ The name and the designation of the Executing Officer /

Operating Authority would also be mentioned in the
indent / proposal. (PCP Clause 2.3.4)
✓ Indents shall not be raised for the jobs not included in
the annual plan for the financial year. (PCP Clause 2.3.5)
✓ In rare / exceptional cases, where the jobs were not
included in the annual plan for the financial year, such
indents shall be raised with recorded reasons and the
approval of the Head of Works. (PCP Clause 2.3.5)
Scrutiny of Indents (3.0)
Indent for purchase to be scrutinized by screening
committee (E5 & above) within a week
Scrutiny shall inter-alia cover the following :
 Inventory holding norms,
 Complete specifications,
 Consumption pattern,
 Stock in hand & dues in,
 Budget availability,
 Estimates,
 Suggested mode of tendering & suggested suppliers.
 Eligibility & acceptance criteria for open / global tenders,
etc.
 The QCBS(Quality & Cost based selection) Life Cycle
Cost may be adopted as the mode of evaluation and
parameters of evaluation must be clearly mentioned
 Scrutiny of Indents (PCP-14 Clause 3.0):
Check Points to avoid common pitfalls

❖ For Purchase Cases: (PCP-2020 Clause 3.1)

✓ Intimation of the clearance of quantity and value
of an Indent to be sent to the Indenter by the
Screening Committee to update their records
within three days of completion of the scrutiny.
✓ In case of computer generated indents of automatic
procurement (AP) items, based on the re-order level,
screening is not required by the Screening Committee
✓ Indents value below Rs. 5 Lakhs, covering the annual
requirement and items cleared by empowered committee
constituted with the approval of Chief Executive
(excluding Job Contracts, Proprietary items and Non-
Proprietary STE items) need not be scrutinized by the
screening committee. 14
 ACTION ON INDENT BY MM DEPTT/CONTRACT CELL
(PCP-2020 Clause 4.0): Check Points to avoid common pitfalls
✓ On receipt an entry will be made in the Indent Register /
Computer and a case-file opened.
✓ …the mode of tendering shall be suggested by the MM
Dept. / Contract Cell, for approval of Competent Authority.
✓ The indents should be processed by the MM Dept. /
Contract Cell within three days / seven days respectively for
purchase / job contract.
✓ Enquiry for the purchase of materials / job contracts shall
be issued within seven days from the date of the approval
accorded by the Competent Authority for mode of
tendering.
✓ Names of tenderers from whom tender is invited, in case of
limited or single tender, shall also be approved by the
Competent Authority. 15
 Mode of Tendering (PCP-2020 Clause 5.0)

Open/Global Tender
(PCP-2020 Clause 5.2)

Limited Tender Enquiry (LTE)

(PCP-2020 Clause 5.3)

Single Tender
(Proprietary Items)
(PCP-2020 Clause 5.4.1)

Single Tender
(Other than Proprietary Items)
(PCP-2020 Clause 5.4.2)

Alert: As per PCP Clause 5.1.3:

“Approval of competent authority shall be obtained for
issuance of NIT in each of the above case.” 16
 Mode of Tendering (PCP-2020 Clause 5.0):Check Points

Open/Global Tender
(PCP-2020 Clause 5.2)

✓ When reliable manufacturers / suppliers / traders /

contractors as well as latest technology are not clearly
known and advertising may elicit better response.
✓ Plants / units shall ensure that the complete tender
documents along with the enclosures, if any, are
uploaded and displayed on the SAIL Tender Website which
can be downloaded by the interested tenderers.
Application made on such forms shall be treated as valid
for participation in the tender.
✓ All Open / Global tender notices shall be published on SAIL
Tender website and will get reflected / published on
Central Public Procurement (CPP) portal as well as Govt. e-
Marketplace (GeM) portal. 17
 Mode of Tendering (PCP-2020 Clause 5.0):
Check Points : Check Points to avoid common pitfalls
Limited Tender Enquiry (LTE)
(PCP-2020 Clause 5.3)

✓ When reliable manufacturers / suppliers / traders /

contractors are known.
✓ LTE should be issued only to registered vendors.
✓ In LTE , no split up thereof should be made to reduce the
value of tender enquiries.
✓ The selection of firms for LTE shall be done by the MM
Dept. / Contract Cell in a judicious manner as per PCP-2020
Clause 5.3.4.

18
 Mode of Tendering (PCP-2020 Clause 5.0):
Check Points : Check Points to avoid common pitfalls

Limited Tender Enquiry (LTE)

(PCP-2020 Clause 5.3)

✓ Under exceptional cases, tender enquiry to be issued to

only two registered suppliers with the approval of Chief
Executive of the Plants / Units.
✓ For case of purchases against indent value of Rs.10 Lakhs
and above, wherever registered manufacturers are
available, LTE should be limited to such manufacturers
only.
✓ As per PCP-2020 Clause 5.3.8 “LTE should be posted on the
SAIL Tender website as well as CPP Portal by the respective
plants /units as per the provisions in the notification
published in CPP portal at
URL::http//www.eprocure.gov.in”. 19
 Mode of Tendering (PCP-2020 Clause 5.0):
Check Points : Check Points to avoid common pitfalls

Single Tender Enquiry (Proprietary Items)

(PCP-2020 Clause 5.4.1)

✓ Should be issued with approval of Competent Authority as

per DOP.
✓ Should be purchased from their manufacturers or their
authorized dealers only (where the manufacturer does not
supply the equipment directly) or the technology / service
provider or contractor only.
✓ In case there is more than one dealer / partner authorized
to sell a particular proprietary item / services to plant /
units, discount may be possible through Limited Tender
Enquiry, therefore LTE may be issued to the authorized
dealers / partners.
20
 Mode of Tendering (PCP-2020 Clause 5.0):
Check Points : Check Points to avoid common pitfalls

Single Tender Enquiry (Other than Proprietary

Items) (PCP-2020 Clause 5.4.2)

✓ Should be issued as an exception only and processed after

recording reasons.
✓ Essentiality Certificate shall be obtained.
✓ As per PCP-2020 Clause 5.4.2.1 “A list of items procured on
single tender basis, should be hosted on SAIL website to
enhance vendor base of such items / job as per the
provisions in the notification published in CPP Portal at
URL::http//www.eprocure.gov.in”.
✓ All STEs should also be posted on the SAIL Tender website
as well as CPP Portal by the respective plants / units to be
accessed by the vendor through user ID and Password.
21
 Other Methods for Placement of Order as per
PCP-2020 Clause 5.5, 5.6, 5.7, 5.8

Repeat Orders (PCP-2020 Clause 5.5)

Rate Contracts (OWN) (PCP-2020

Clause 5.6)

Procurement on GeM (PCP-2020

Clause 5.7)

Emergency Contract/Job Contract (PCP-

2020 Clause 5.1.2 and 5.8)

22
 Repeat Orders (PCP-2020 Clause 5.5) –
Check Points to avoid common pitfalls
✓ For Original order in normal course through LTE/ OT. Emergency orders
shall not be considered.
✓ Not more than 2 years after Original order.
✓ No price escalation for firm price orders.
✓ No Repeat Order in case of downward price trend.
✓ Not more than 2 Repeat Orders to be placed.
✓ The quantity/scope considered for ordering is not more than 100% of the
original ordered quantity/scope, for each repeat order.
✓ The original order was not placed on the basis of a higher price for earlier
delivery
✓ Sanction of Competent Authority for repeat order shall be obtained
✓ In exceptional cases, a third repeat order can be placed with the approval
of CEO after recording justification.

23
 Rate Contracts of Plant/Unit /Sister Plant/SAIL (PCP-2020
Clause 5.6) :-Check Points to avoid common pitfalls

✓ As a substitute to frequent tendering, for items / jobs which

are procured / executed regularly, repetitively and for items
of proprietary nature.
✓ While issuing LTE for rate contract, it should be ensured that
only reliable and reputed manufacturers / suppliers /
contractors of proven ability are entertained.
✓ For purchase cases, rate contracts may also be entered into
for items which are identified as of regular and repetitive
consumption with the consent of the indenter without
waiting for the indent, in order to ensure speedy processing.
Same shall be regularize later on after receipt of Indent.

24
 Procurement on GeM (PCP-2020 Clause 5.7):
Check Points to avoid common pitfalls

•Government e-Marketplace (GeM) may be utilized for

procurement of goods & services only and not for works
contracts, but the items to be used in works contracts may be
procured through GeM, For placement of Orders on GeM,
delegation of powers (DOP) as available for procurement of
goods/ services through Open Tender Enquiry (OTE) shall be
used by plant/ unit.
•Procurement of any Goods or Services on GeM portal shall be
as per SAIL Procedure for Procurement of Goods & Services on
Govt. e- Marketplace (SP- GeM: 2018) and the extant
guidelines issued by the Govt. of India.

25
 Emergency Contract (PCP-2020 Clause 5.1.2 and 5.8) :
Check Points to avoid common pitfalls

✓ The normal process of tendering stipulated in this

procedure cannot be followed .
✓ For emergency Indents, the mode of tendering and method
of placement of order may be adopted as per the specific
requirements of the case and the time available for the
placement of order and getting materials /execution of
jobs.
✓ Approval of the Competent Authority shall be obtained for
the specific mode of purchase / award of contract and order
finalised.
✓ Emergency Indents should be accompanied by non-
availability & criticality certificates issued by the concerned
HOD on prescribed format.
26
 Invitation to Tenders:
Eligibility Criteria :Check Points to avoid common pitfalls
✓ Proposed criteria for technical eligibility & acceptance
should neither be made very stringent nor very lax to
restrict / facilitate entry of bidders. (PCP-2020 Clause 2.2.3
(c))
✓ Eligibility criteria are exhaustive yet specific and there is fair
competition. (PCP-2020 Clause 2.2.3 (c))
✓ In cases of job contract, generally the technical /
commercial terms need to be negotiated. Therefore, for all
such job contracts, 2 / 3 part quotation, should be invited
against both Limited Tenders and Open Tenders.
✓ Before issue of NIT, MM Dept. / Contract Cell/ Contracting
Department should ensure that desired information,
particularly specifications / commercial terms are available
in the case file. 27
 Invitation to Tenders:
Eligibility Criteria (EC) :Check Points to avoid common pitfalls
✓ EC should include: (PCP-2020 Clause 6.4)
➢ Required experience and past performance in similar type
of supply / contracts
➢ Required manpower (skill-wise) and type/capacities of
equipment & construction/manufacturing facilities
➢ Proof of ownership / licensee of required equipment and
construction / manufacturing facilities, financial position,
service support, if any,
➢ Earnest money / security deposit as clause 8.3, and
➢ Any other criteria, considered necessary.

The above criteria shall be specified in the Tender Document

under special terms and conditions.

28
 Invitation to Tenders:
Check Points to avoid common pitfalls
✓ In case of medicines, chemicals and other items having limited
shelf life, the left over shelf life of each item at the time of
delivery should be at least 80%. (PCP-2020 Clause 6.8)
✓ In emergency, the left over shelf life equal to 120% of the
consumption period of such items may be accepted with the
approval of the Competent Authority. (PCP-2020 Clause 6.8)
✓ Order distribution shall be clearly mentioned in the tender
documents (Pl. Ref. PCP-2020 Clause 6.8)
✓ As per PCP-2020 Clause 6.9: In case of Open / Global tenders,
other than for capital schemes,
➢ To bring the prices of the foreign suppliers and the Indian suppliers
at par, the RBI reference rate should be considered for exchange
rate conversion.
➢ “forward premium rate” should be considered for the period of
delivery
29
 Invitation to Tenders:
Check Points to avoid common pitfalls
✓ Clear stipulation should be made in the tender documents
regarding taking justification of quoted price from the L-1
tenderer /PBG (as an additional security) if the quoted price is
less than the lower limit of the estimated price (Ref. PCP-2020
Clause 6.12 & 10.1)
✓ If agents / dealers / stockists of foreign companies quote along
with manufacturer, only the offer of Principal / OEM will be
considered as valid. (Ref. PCP-2020 Clause 6.14)
✓ One agent cannot represent two suppliers / Principal / OEM or
quote on their behalf in a particular tender. (Ref. PCP-2020 Clause
6.14)
✓ For all tenders / Contracts / Long Term Agreements (LTAs) valuing
Rs.20 crores and above, the tenderer(s) / bidder(s) /
contractor(s) has to enter into an “Integrity Pact” with SAIL. (Ref.
PCP-2020 Clause 6.15)
30
 Opening/Scrutiny /Ordering of Tenders:
Check Points to avoid common pitfalls
✓ As per PCP -2020 Clause 6.19 “In all technically complex Projects
cases, pre-bid discussions after floating of tender and before
submission of bids should be held…”
✓ As per PCP -2020 Clause 6.20 “For high value purchase orders /
contracts costing Rs. 2 crores and above, the Tender Committee
should be constituted with the approval of the competent
authority, at least seven days before opening the tender…”
✓ As per PCP-2020 Clause 7.7 “For opening the tenders, a minimum
of X+2 offers should have been received ('X' is the number of
supplier / contractor on whom order is to be placed).
✓ As per PCP-2020 Clause 7.7 (a) “In case of open / global tenders,
if less than the specified (X + 2)numbers of offers are received;
same can be processed without going for re-tender / tender
opening date extension with the approval of the authority one
stage higher than the authority competent to approve the
enquiry proposal or Chief Executive.” 31
 Opening/Scrutiny /Ordering of Tenders:
Check Points to avoid common pitfalls
✓ As per PCP-14 Clause 7.7 (b) “In case of LTE, if less than specified
X + 2 number of offers are received in the first attempt, a second
attempt may be made by inclusion of new vendors or extension
of due date if there is no scope of adding new vendors…”
✓ As per PCP-14 Clause 7.8 “Offers received against Single Tender
cases can be opened before or after the tender opening date by
the dealing MM Dept. / Contract Cell Executive.”
✓ As per PCP-14 Clause 7.11 “Delayed / Late Tenders will not be
opened.”
✓ As per PCP-14 Clause 7.14 “Any modification to the original
tender after due date of tender opening shall also be treated as
unsolicited and rejected.”
✓ As per PCP-14 Clause 7.15 “Tenders not accompanied by
requisite Earnest Money, where Earnest Money is stipulated in
the tender condition, shall be treated as invalid.”
32
 Opening/Scrutiny /Ordering of Tenders:
Check Points to avoid common pitfalls
✓ All the correspondence in respect of clarifications /
confirmations, whether it be technical or commercial
shall be dealt through MM Dept. / Contract Cell /
Contracting Department only till the final placement of
order (As per PCP-2020 Clause 7.19 ).
✓ The unopened hard copies of price bids of the parties whose
offers have not been techno-commercially accepted should be
returned to the parties within 10 days from the date of price bid
opening. (As per PCP-2020 Clause 7.30 )
✓ In addition to the price bids, invalid, unsolicited and late offers
are also to be returned back to parties within 10 days of tender
opening. (As per PCP-2020 Clause 7.30 )

33

Earnest Money(8.0)
EMD protects Company against irresponsible offers but it should not be so
high as to discourage tenders
 Non requirement of EMD/ Reduced EMD*, in OTE should be decided by
HOMM/CC on case to case basis with the approval of Competent Authority.
 The amount of EMD to be specified in NIT in terms of absolute value as per
indicative schedule in PCP.
 MSEs/PSUs & Co-operative Societies/Start-ups as recognized by
Department of Industrial Policy & Promotion (DIPP) etc. may be exempted#
from submission of EMD as per Govt. Policy.
 Earnest Money may preferably be submitted in the form of online transfer -
NEFT, RTGS, SWIFT.
 Proof of such transfer to be submitted with the offer in the envelope titled
EMD.
 Earnest Money (8.0)
 EMD can also be submitted demand draft, pay order, Banker's Cheque or Bank
Guarantee (BG) from any scheduled commercial bank except co-op. & Gramin banks.
 No request for adjustment of earlier dues should be entertained.
 EMD will not be accepted in cash.
 Registered contractors may opt one time non-adjustable EMD for contracts.
 Refund of EMD
 within 7 days from the date of rejection of offers
 unsuccessful tenderers within fifteen (15) days from determination of L-1
 within 15 (fifteen) days of submission of Performance Guarantee / Security Deposit or 30 (thirty) days of
successful completion of contract, whichever occurs earlier.
 In place of EMD, Bidders may require to sign a Bid Securing declaration that “they
will be suspended for the period of one year from being eligible to submit Bids for
contracts.”
 If EMD has been taken, the decision on the tender is delayed by more than 30 Days
from the last date of receiving the bids the EMD should be returned BSD may be
obtained.
 Scrutiny of Quotations (9)
 For single part quotations:
 quotations to be forwarded after scrutiny within 2 days of opening to Tender
Committee / indenter.
 If L-1 price beyond permissible range of variation, indenter should
comment on reasonability of quoted price.
 In LTE, bids cannot be rejected on the basis of incapability.
 No change in specifications, in case changes required, re-tendering to be
done.
 In case of 2/3 part tendering:
 The techno-commercial bids after its opening shall be evaluated by the
indenter/ Tender Committee
 Indenter to be scrutinize technical part and MM Dept./Contract Dept. to
scrutinize commercial part.
 A comparative statement of techno-commercial scrutiny of all the
tenders shall be prepared by the indenter / Tender Committee.

Revised Price Bid (9.2.3)
In case, tenderers desire to update their price bids citing reasons, it may be
permitted only under exceptional circumstances to be recorded in writing
and with the approval of C/A.
 In such cases, all the acceptable tenderers may be permitted to submit
incremental/decremental /revised price-bids.
 If additional items included, tenderers to submit a separate price bid for the
additional items only.
 The initial price bid and revised price bid/increment-decrement shall be
opened together.
 In case any specific adverse report is received against a tenderer, as an
information or upon enquiry made by SAIL in respect of capabilities and
performance of the tenderer the quotation / tender of that tenderer is liable
to be rejected after recording the reasons and with the approval of the
competent authority.
Opening of Price Bids (9.4)
After completion of the techno-commercial scrutiny the price
bids shall be opened and evaluated.

If X+2 or more number of offers were available at the techno

commercial bid opening stage and there are less than X+2
offers for price bid opening, prior approval of authority one
stage higher than the approving authority shall be taken.
In case of tenders specifying single source of supply, none of
the tenderer, has offered full quantity / scope of work, then
after taking approval of NHA and recording the reasons for
not retendering the case, processing of tender is to be done
including opening of price bid.(10.3)
Comparative Statement-Price Bid(9.5)
Comparative statement should indicate item-wise prices,
rebates, taxes, packing & forwarding charges, freight,
insurance, etc.
To arrive at a comparable landed cost at the plant, relevant
IPSS to be used.
L-1 prices to be compared with estimate and the
reasonability be examined by T/C or duly constituted
Committee.
For matching / complimentary parts and for jobs to be
executed by one contractor, overall quoted price of all such
items / jobs will be considered.
Purchase / Contract Proposal (10)
(+) range for purchase & () range for contract proposals for
deviation in estimates to be fixed.
In case order is to be placed on one party only and L-1 is within
specified range & the party has offered full qty., placement of
order on L-1.
In case, none of the In case L-1 is not offering full qty, remaining
qty. can be covered from other qualified tenderers provided they
match L-1 prices.
In case still full qty is not covered at L-1 rates, the balance
quantity may be cancelled or retendered with the approval of
C/A.
In case order on more than one party, only those tenderers who
match L-1 price should be considered will be considered for the
distribution of order as per their original ranking.
 Purchase / Contract Proposal
 For splitting of orders, the basis will be original ranking of tenderers.
 The distribution pattern for splitting will be broadly as indicated in PCP.
 In case more than one tenderer is qualifying as L-1, placement of order after
obtaining reduced revised price bid from the L-1 tenderers, in case of tie,
draw of lots.
 In case of unreasonably lower L-1 price, contractor has to justify the rates
quoted. If justification is found workable, PG bond may be waived with the
approval of NHA.
 In case the tenderers refuse to comply with this, action will be taken as per
Para 6.12 with the approval of the Next Higher Authority / Chief Executive
Officer of the Plants / Chief Executive of the Units on submission of
recorded reasons.
Purchase / Contract Proposal
 PG Bond should be taken in the form of DD/ BG from scheduled bank
except co-op & Gramin banks.
 Voluntary reduction to be considered only if party is L-1 at the time of
opening of price bid.
 The order would be placed at a price taking into account the voluntary
reduction offered by the party.
 Purchase preference to PSUs / Government organizations shall be as per
guidelines issued by GOI in this regard.
 Public Procurement (Preference to Make in India) Order 2017 (Revised
on 29.05.2019) and subsequently amendments, if any, shall be applicable.
 For MSEs Besides exemption of EMD & fee for tender documents,
purchase preference as per GOI guidelines issued.
Price Negotiation (11.0)
There should be no post tender negotiations except in
certain exceptional situations.
Such exceptional situations would include, procurement of
prop. items, items with limited source of supply and items
where there is suspicion of a cartel formation.
The justification and details of such negotiation should be
duly recorded & documented without any loss of time.
The justification and details of such negotiations, wherever
feasible, should be maintained online.
Price Negotiation
Negotiation, if required, should be conducted with the L-1
bidder only with the approval of C/A.
Convincing reasons must be recorded by the authority
recommending negotiation.
Neg. should be held by the committee & committee must
record reasons and outcome of the negotiations.
For distribution on multiple parties, L-2, L-3… are required
to match prices, the same shall not be treated as
negotiation.
If L-1 backs out, re-tendering in transparent manner
without considering backed out tenderer.
Price Negotiation
(Besides forfeiting EMD, such tenderer should be kept
under hold up to next one year with the approval of HOD)
Up to Rs. 20 lacs (Rs. 80 lacs for import) negotiation
through correspondence permitted.
Order on more than one party only if stipulated in NIT.
No changes in techno-commercial terms during price
negotiation.
Negotiation & decision for placing order within validity
period of the offer.
If necessary, the extension of validity period by the parties
concerned should be ensured.
 Issuance of Purchase Order (13)
The order shall be placed within the validity of the offer.
The total quantity to be ordered on trial basis to be approved
by HOM at the time of issue of LTE.
Trial order shall be at =< established L-1 rates.
The order should be placed on standard format.
Escalation/ variation clause should be carefully drawn.
Base date for providing escalation / de-escalation should be
properly indicated in tender documents.
Orders should be self-contained and should stipulate pmt.
terms, LD, Risk purchase/ contract clauses, etc.
In case of subsequent order on higher price, if any leftover qty
yet to be supplied at lower rates, the same should be ensured.
 Issuance of Purchase Order
 Order placement should not ordinarily exceed D+30 working days of price discovery.
 D+7 working days where no negotiation required.
 D+21 working days where negotiation(s) held.
 For Project cases with multi-stage approval an additional maximum of 15 days
should be assigned for clearance at each level or a maximum of total 60 days.
 Any order placed on STE/Nomination basis above Rs. 1 Crore to be reported to SAIL
board on quarterly basis.
 If the delay in completion of supply/execution of job is attributable to SAIL or force
majeure only, LD will not be levied.
 Extension of delivery / pre-ponement of contract period may be granted by the C/A.
 For Project/AMR cases, relevant clause of SBD may be referred.
 In exceptional cases, amendment to PO/Contract may be issued for recorded reasons
with the approval of C/A.
 All post tender contract details above ` 5.0 lakhs should be posted on SAIL Tender
Website as well as CPP portal as per the extant provisions / direction of the Govt. of
India.
 Payment Terms (16)
 Payments to be made strictly according to terms & conditions as per
PO/Contract.
 Before release of payment, Finance should ensure that material both in
quantity & quality as been taken on record and recoveries, if any have been
made.
 Each plant/unit should prepare elaborate system for inter department
forwarding/ receipt/ acknowledgement of documents.
 Bills completed in all respects should be paid on first-in-first-out basis.
 If any tenderer does not ask for taxes/ duties in his quotation, the tenderer
will not be eligible for any payment on this account.
 In case the supplier fails to submit the requisite tax/duty documents, the
same shall be deducted from his bill.
 For any bill complete in all respect payment delayed beyond 30 days from
due date details along with reasons should be displayed on intranet portal
with a copy to Vigilance Department and HOMM /HoP/Vigilance.
 Risk Purchase (18.0)
Notice of 15 days to be given before cancellation of Purchase /
Work Order.
Preferably the date of tender opening & expiry of notice should
be about the same time.
Response of defaulting party should be taken into account
before cancellation.
For job contract, notice for execution of order on risk & cost can
be during the valid period of contract also.
Before placing the alternate order and cancellation of original
order, approval of NHA required.
Standard risk purchase procedure of CMMG may be referred
for details.
Small Value Purchase Procedure (23)
 This procedure shall apply to indents of low value i.e. Rs.15000/- to
Rs.4,00,000/-
 For indent value less than 15,000/-, procurement through imprest (upto
15,000/-) or by any other mode like GeM (Direct Purchase on GeM) may be
done, if possible.
 same item shall not be procured more than twice in a year and
cumulative value less than 4,00,000.
 Items valued as above, may be clubbed into one indent having the same
set of Vendors
 Emergency purchase not covered in the procedure.
 Scrutiny of indents not required.
 Re-appropriation of budget not permitted.
 Estimate should be realistic
 LTE to minimum 3 vendors all registered vendors should be included. In
case of LTE to 2 firms, approval of NHA required.
 In case of >(x+2) quotations, approval of NHA reqd.
 If L-1 backs out, the case has to be re-processed.
 Pre-dispatch inspection not applicable.
Small Value Contract Procedure
The same job / service not to be contracted out more than
twice a year by an individual department & its cumulative
value should not exceed Rs.4,00,000/- per year.
In case tech. terms/specifications are frozen, single part
quotation may also be called.
Job shall be awarded to one contractor.
Estimate should be realistic
LTE to all registered vendors.
in case of LTE to less than X+2 firms, approval of NHA
required.
In case of less than X+2 quotations, approval of NHA
required.
Order shall be placed on overall L-1 basis.
If L-1 backs out, the case has to be re-processed.
 Other Provisions…
Standard Procedure for Reverse Auction (RA) issued by
CMMG
and amendments made thereto, if any, shall be followed.
Banning, if required, should be as per guidelines on Banning
of Business Dealings.
Summary details of banned suppliers / contractors with
reasons and period of banning shall be uploaded by the
respective plant / unit on SAIL Tender Website.
Tender enquiry format should have a clause making it
compulsory for a bidder declarations.
Other Provisions…
 It must be ensured that:
 Relevant provisions of SAIL CDA Rules, 1977 are complied
with.
 Tender enquiry should invariably have a clause to declare
relationship of prop./partner/director of the firm with
employee/ any director of sail & relative shall be as defined
in the co.’s act, 1956.
 While procuring materials, the focus should be on
electronic communications.
Thank you………..