Procurement Management

Public Procurement
Legal Institutional Framework
Delegation of Financial Powers
General Financial Rules

1 E-Procurement

Prashant Gupta, Asst. Audit Officer,

O/o the DGA (Central Expenditure), New Delhi
2 Public Procurement

Public Procurement means acquisition by a procuring entity

by way of purchase, lease, license or otherwise of:
 Goods
 Works
 Services
 Combination of Works and Services (PPP)

The Procurement can be made directly or through an agency

with which a contract for procurement is entered.
3 Goods!
 ‘Goods’ includes all articles, material, commodity, livestock, medicines,
furniture, fixtures, raw material, consumables, spare parts, instruments,
machinery, equipment, industrial plants, vehicles, aircraft, ships, railway
rolling stock, assemblies, sub-assemblies, accessories, a group of
machineries comprising of an integrated production process or such other
category of goods or intangible products or otherwise acquired for the use
of Government but excludes books, publications, periodicals, etc. for
library.
 The term ‘Goods’ also includes works and services which are incidental or
consequential to the supply of such goods, such as, transportation,
insurance, installation, commissioning, training and maintenance.
(Rule 143 of GFR 2017)
4 Public Procurement: Its Value
Public Procurement accounts for a substantial expenditure
out of public money, various arms of the Government are
expected to carry it out efficiently and with high
standards of conduct in order to ensure high quality of
service delivery and safeguard the public interest.

As per Public Procurement Bill of 2012, the value of public

procurement in India by governments and their entities was
estimated to be around 15-20% of the GDP.
5 Legal Framework on Public Procurement
Article 77 Conduct of Business of GoI
1. All executive action of the Government of India shall be expressed to be taken
in the name of the President
2. Orders and other instruments made and executed in the name of the President
shall be authenticated in such manner as may be specified in rules to be made
by the President, and the validity of an order or instrument which is so
authenticated shall not be called in question on the ground that it is not an
order or instrument made or executed by the President
3. The President shall make rules for the more convenient transaction of the
business of the Government of India, and for the allocation among Ministers of
the said business.
6 Legal Framework on Public Procurement
Article 299
 All contracts made in the exercise of the executive power of the
Union and States shall be expressed (to be executed in writing) to
be made by President or Governor, as the case may be, by such
persons and in such manner as the President or Governor may
direct or authorize.
 Currently there is no single law specifically governing procurement
by the Central Government. However, some States (viz. Tamil
Nadu, Karnataka, Rajasthan, etc.) have enacted Public Procurement
Act to regulate and ensure transparency in procurement.
7 Legal Framework on Public Procurement
 Indian Contracts Act, 1872
 Sale of Goods Act, 1930
 Arbitration and Conciliation Act, 1996 read with the Arbitration and Conciliation (Amendment) Act,
2015
 Competition Act, 2002 as amended with Competition (Amendment) Act, 2007
 MSME Development Act, 2006
 Information Technology Act, 2000 (IT Act, regarding e-Procurement and e-auction)
 Right to Information (RTI) Act 2005
 Central Vigilance Commission Act, 2003
 Delhi Special Police Establishment Act, 1946 (basis of the Central Bureau of Investigation)
 Prevention of Corruption Act, 1988
 The Foreign Trade (Development and Regulation) Act, 1992
 Foreign Exchange Management Act (FEMA), 1999
8 Delegation of Financial Power Rules, 1978
 Rule 8 of Delegation of Financial Powers Rules 1978 prescribes
the class of expenditure, and object heads thereunder. Budget
Provisions are obtained for procurement under these object heads
and expenditure booked in the accounts accordingly.
 Rule 21 of the Delegation of Financial Powers Rules 1978
prescribes the Financial Powers of various Authorities; the
conditions under which such financial powers should be
exercised.
9 Fundamental Principles for Procurement

 Transparency
 Professionalism
 Broader Obligations
 Extended Legal Responsibilities
 Public Accountability
(Rule 144 of GFR 2017)
10 Parameters of Procurement: Five R’s

 Right Quality
 Right Quantity
 Right Price
 Right Time and Place
 Right Source
11 General Financial Rules, 2017
 Chapter-5 of GFR, Rules 130 to 141 provide general regulatory framework
relating to requirements to be completed through Works Contract.
 Chapter-6, Rules 142 to 206 provide general regulatory framework
regarding Procurement of Goods and Services required for use in the
Public Service.
 Chapter-7, Rules 207 to 223 relates to efficient Inventory Management in
respect of Goods and Materials procured.
 Chapter-8, Rule 224 to 227 provide framework for Management of
Contract.
12 General Financial Rules, 2017
Rule 147: Power of Procurement of Goods
The Ministries or Departments have been delegated full powers to
make their own arrangements for procurement of Goods and
Services that are not available on GeM. Common use Goods and
Services are required to be procured mandatorily through GeM as
per Rule 149 of GFR 2017.
Rule 160: E-procurement
It is mandatory for Ministries/Departments to receive all bids
through e-procurement portals in respect of all procurements.
13 General Financial Rules, 2017
Rule 154: Purchase of goods without quotation
Purchase of goods up to the value of Rs 25,000/- only may be made without
inviting quotation or bids on the basis of Certificate to be recorded by the
competent authority in the prescribed format.
Rule 155: Purchase of goods by Purchase Committee
Purchase of goods costing above Rs 25,000/- and up to Rs 2,50,000/- on the
recommendations of a duly constituted Local Purchase Committee.
Rule 157: Purchase of Goods in Parts
A demand for Goods should not be divided into small quantities to avoid
necessity of obtaining sanction of higher authority for total demand.
14
Modes of Procurement
 For common use Goods and Services, DGS&D under the
Ministry of Commerce & Industry has hosted an on-line GeM
Portal. The Procurement by Ministries or Departments will be
mandatory for Goods or Services available on GeM.
 The Ministries/Departments work out their procurement
requirements of Goods and Services on either OPEX or CAPEX
model as per their requirement/suitability at the time of
preparation of Budget Estimates (BE) and shall project their
annual procurement plan of goods and services on GeM portal
within 30 days of budget approval.
15
Modes of Procurement
 Mandatory Procurement of Goods & Services through GeM
 Open Tenders
 Limited Tender and Special Tender Enquiry
 Nomination Basis viz. Proprietary Article Certificate (PAC)
and Single Tender Enquiry without PAC
 Without calling tenders viz. Direct Procurement by/without
Purchase Committee, through Central Purchase
Organizations, and withdrawal against Rate Contracts
16 E-Procurement (other than GeM)
Central Public Procurement Portal
 The primary objective of CPP Portal is to provide a single
point access to the information on procurement made
across various Central Government organizations.
 The CPP Portal of GoI facilitates all the Central
Government Organizations to publish their Tender
Enquiries, Corrigendum and Award of Contract details.
17
Thanks