PART – II / CHAPTER -4
CONSIDERATION OF TENDERS
4.1 Time: - Tenders should be considered expeditiously without any delay Board's letter No. 77/RS (G)/ 779/16 dated 7th April 1979—(Annexure II /4-23)
Tenders should be finalised within the period of validity of offers.
4. l . l From the number of audit paras being processed in Board's office, it appears that finalisation of Tenders in quite many cases is taking longer than the validity periods. Board have expressed concern on the non-finalisation of tenders within their original validity period. Ministry of Railways have reiterated that instructions should be Issued to all concerned on the need for expeditious finalisation of tenders and as far as possible within the validity period to guard against the possibility of increases in prices and consequently incurrence of extra expenditure by the Government . Any delay in finalisation of tenders involving foreign exchange may lead to (1) non-utilisation of foreign exchange (2) Change in comparative position of offers due to fluctuation of exchange rate.
Authority: Board's letter No.79/RS(G)/779/16 dated 8th December 1982-(Annexure II/4-30 ) & 83/F(F(EX)3/1 of 26.10.1983 –(Annexure II/4-43)
4.1.2 Ministry of Railways also viewed seriously the delay in finalisation of tender as a result of which price of the stores was increased and extra expenditure was incurred. Board also desired that detailed guidelines be issued to all concern for expeditious finalisation of tenders strictly within the original validity and this should be regularly monitored to avoid any slippage.
Authority: Board's letter No.79/RS(G)/779/16of 26.07.1990 (Annexure II/4-45) 94/RS(G)/779/16 of 25.08.1994 ( Annexure II/4-51) & 99/RS(G)/779/5 of 15.06.1999 ( Annexure II/4-57)
4 . 2 Clarification:- Clarifications should not be sought piecemeal from the Tenderers, Such clarification should not change the substance or price of the original offer. All the information necessary for consideration of offers should be called for at one time leaving no occasion for seeking further extension of time .
Authority: Board's letter No. 60/777/RS(G) dated 13th February 60 – (Annexure II/4-04 )
letter No. 60/777/RS(G) dated 14th September 1960 - (Annexure II/4-05)
and 67- B(C)-PAC/III/72/16-17 dated 29th/31st July 1967 (Annexure II/4-11)
4. 2. 1 In the first instance, the technical specifications/requirements should be carefully drawn up so as to clearly bring out the specific requirements of the tender. The Officers dealing with the evaluation of the tenders should make direct and to the point queries while obtaining clarifications from the bidders and get positive responses with regard to the compliance with or deviations from the specification. The questioning should be in such a manner as not to 1eave any erroneous impression on any bidder with regard to acceptability or otherwise of the bids submitted by him.
Authority: Board's letter No.87/RS(G)/779/12 dated 23.06.1987 – (Annexure II/4-39)
4. 3 Income Tax Clearance Certificate:-
4.3.1 Bulletin/Limited Tenders: - Such Tender enquiries are issued only to the registered firms, who should produce current I.T.C.C. at the time of registration and as well as regularly thereafter. Railways should ensure current I.T.C.C. are obtained. from all registered firms regularly every year. The names of firms who fail to produce valid I.T.C.C. may be removed from the approved list of suppliers.
4.3.2 Advertised Tenders: - All firms including registered firms should be asked to submit valid I.T.C.C. along with their quotation, and this aspect should be made abundantly clear in the Tender document itself. Offers which are not accompanied by the valid I.T.C.C. should ordinarily be ignored.
However, if a firm (whose offer is otherwise considered most competitive and acceptable) is unable to furnish the current I.T.C.C., then. they may asked to produce the I.T.C.C. at least for the last financial year before placement of the order. No payment should be allowed for supplies made under the contract and the supplier has no right to make any claim for payment till the production of valid and current I.T.C.C. It should be ensured that this aspect is clearly brought out in the agreement or letter of acceptance. This concession also should only be sparingly used and only applied to the tried firms of known repute and sound financial standing. This will be in line with the instructions issue earlier by the Board vide their letter No.69/WI/CT/28 dated 18th September 1969.
Authority: Board's letter No.69/Wl/CT/28 dated 18th September 1969 –(Annexure II/4-16)
and No. F(X)1/75/24/2 dated 24th June 1977- (Annexure II/4-21)
4. 4 Acceptance of offers from unregistered and untried firms through advertised tenders: Para 325-S of the Stores Code stipulates that when are invited by Public Advertisement, the issue of Tender forms should not be restricted to firms whose names are on the list of approved suppliers (either approved by R.D.S.O. or by Railways themselves).
4.4.1 Such unregistered firms who tender should furnish along with their quotation, the Income Tax Clearance certificate, the name and full address of their Bankers, the performance statement in the prescribed proforma regarding supplies made by them against contracts received from other Railways, D.G.S.&D and other agencies for similar stores in the past 3 years, details of equipment they possess for manufacture of the said stores including, quality control in a prescribed proforma, details of technical personnel employee, etc. Earnest; Money and Security Deposit should be had from all unregistered firms, unless they are waived as per extent instructions by the competent authority. Therefore should the firm fail to furnish the above particulars, their offer should be ignored. In case the firms fail to furnish the above Particulars and where prima facie the Railway feel that the firm is capable of plying the required stores, the capacity-cum-capability could be verified either by deputing their own representatives or by using the agency of R.D.S.O., D.G.S. & D. or RITES. At least 80 per cent of the demand should be covered invariably on the registered / approved suppliers. The balance quantity up to 20 per cent could be covered on the unregistered firms whose capacity could not be tried by an educational order either, but whose offers are competitive and prima facie the Railway is satisfied that they are capable of executing the order.
4.4.2 In all cases of educational orders, the Inspection agency shout be carefully chosen to ensure viz., in the case of safety items preferably RDSO should be utilised and for signalling safety items only RDSO should be utilised. If these educational orders are satisfactorily executed by the firm concerned, these firms should be placed in the list of approved .sources. Where educational order, however, fail, these firms should not be included in the approved list and shortfall in quantity to be procured should be covered on the approved/registered suppliers holding purchase orders /contracts by exercising the option clause wherever available.
4.4.2.1 Whenever purchase orders are placed on any firm on trial/Developmental basis, the same should be boldly indicated, with stipulations like "Trial / Developmental order". When the photo copies of such P.O.s are submitted by these firms to any other Zonal Railways/ Production Units, this will enable those, officers to know that such purchase orders are only Trial orders.
4.4.3 Railways may consider procurement of critical materials to the extent of 100 per cent from Registered Approved suppliers, in consultation with Finance where Railways may not be willing to undertake the risk of the failure on the part of the supplier to whom the educational orders have been placed, as only about 80 percent of the supply would have been assured by placement of the orders on Registered / approved suppliers and not more thanl/4th of the order could be placed as an educational order. The type of circumstances when such situation may arise may be viz., delivery offered in the development orders is protracted, the item is of a complicated nature with likely delays in supply by the new supplier etc.
4.4.4 There may be also some cases where the administration may consider after due verification that the new supplier who has quoted competitive rate is having the required capacity-cum-capability and in those cases as well there is no objection to the Railway Administration placing bulk orders on these suppliers straightway in consultation with Finance and approval competent authority .
Authority: Board's letter No.77/RS(G)/779/17 dt 23/27th January 1979 –(Annexure II/4-22)
and 73/RS(G)/ 779/30/pt dated 22.01.1990 – (Annexure II/4-43)
4.5 Undue emphasis should not, however, be placed on Previous experience of contractors as it would cut across the very principle of inviting open tenders and by shutting off all new comers, it would tend to create monopolistic tendencies. In this context Board has also pointed out one particular case in one of the Railways Production units in which the administration put impediments in the efforts of an honest firm who was interested in developing an item. The new comers should be encouraged.
Authority: Board's letter No. 89/RS (G)/164/13 pt. dated 10.8.89 -- (Annexure II/4-42)
58-B/(C)/2498/11/4th Report/8 dated 27th/30th May 58 – (Annexure II/1-03)
4.5.1 Considering of offer in respect of imported stores by Indian Agent without the principal's proforma invoice.
4.5.2 Indian Agents while quoting on behalf of foreign principals are required to furnish the Principal's Proforma Invoice.
4.5.3 It has been decided that in cases where the Indian Agents do submit the Principal's Proforma Invoice along with their quotation, the competent Purchase Officers in association with Finance will satisfy themselves about the reasonableness of the price quoted, the Agency Commission included in the price etc. In this connection, it is, however, clarified that as a matter of general principle, the Proforma Invoice should be invariably called for from the Indian Agents and relaxation should be allowed only in exceptionably urgent cases, where it is not possible to obtain the invoice before the contract is placed.
Authority: D.G.S.& D's Routine Note No.17 dated 3rd November 1982 received under Board's letter No.79/RS(G)/657/2 dated 1st January 1983 – (Annexure II/4-31)
4.6 In all cases where the lowest or lower tenders are rejected, full reasons for the rejection should be recorded, as provided for in Para 342-S and Para 402 (vi)-S so that the reasons for such rejections would be available on file also Board's letter No.68/Wl/CT/15 dated 15th July 1968 (Annexure II/4-14) and Board's letter No.84/Wl/CT/19 (Audit) 30th July 1984 (Annexure II/4-35).
4.6.1 While evaluating the tenders, the tender committees; while taking into account the existing instructions on the subject, should first arrive at common base for all tenderers in respect of the various inputs indicated in the price variation clause quoted, so that the tenders are not vitiated on account of variations in the prices of various inputs. In fact before calling the tenders the price variation clause should be specifically settled and incorporated in the tender document, if necessary, so that all tenderers quote their rates as a common base. The lowest offer should not be ignored only on the plea of urgency, in case it is possible to arrange the required quantum of material in the interim period from alternate sources.
Authority: Bd’s letter No. 89-BC-SC/40 of 20.05.1996 (Annexure II/4-53).
4. 7 Where warranted, the tendered quantity may be split and tender decided in favour of one or more firms on merits of each case in consultation with Associate Finance and with the approval of the authority competent to accept the tender having due regard to the following factors.
i) Vital/Critical nature of the item;
ii) Quantity to be procured;
iii) delivery requirements;
iv) capacity of the firms in the zone of consideration; and
v) Past performance of firms;
Authority: Board's letter No.76/RS(G)/779/36, dt 8th November 1979 (Annexure II/4-24)
and 79/RS(G)/779/41 dated 26th October 1980 – (Annexure II/4-25)
Splitting should not be done merely with a view to utilising developed capacity of the different sources but should be for valid reasons to be recorded in writing for splitting the tendered quantity.
Splitting of the quantity irrespective of the difference in the rate should not attract the time preference factor.
Authority: Board's letter No.79/RS(G)/779/41 dated 16th January 1981 (Annexure II/4-26)
4.7.1 Normally where splitting is done effort should be made to see that orders are placed at one rate , namely lowest acceptance rate. Differential rates can be considered on the merit of the each case. While splitting the tender quantity lowest acceptable rate can be counter offered to the higher tenders does not amount to negotiations.
Authority: Bd’s letter No. 76/RS(G)/779/36 of 29.11.1996 (Annexure II/4-54)
4.7.2 But it should not to be interpreted that making counter offer is mandatory before any consideration of differential rates when quantity is proposed to be split between more than one firm. The procedure of counter offer may be kept in view while splitting the tender quantity. However it is open to the Railway’s to decide, depending upon the merit of the each case, to either counter offer the lowest acceptable rate while splitting the tender quantity, or place order on different rates.
Authority: Bd’s letter No. 76/RS (G)/779/36 of 06.11.1997 (Annexure II/4-54)
4.8 Late tenders/delayed tenders/post tender offers should be totally rejected and that, when tender cases are under examination, no other authority should be allowed to make queries or call for reports as apart from the impropriety involved, this leads to delays in taking decisions. Notwithstanding this general ban, Railways can seek Boards approval for consideration of late tenders from established /reliable financial advantage and with the personal approval of G..M. duly concurred in by F. A. & C.A.O. However suppliers conferring a substantial, this ban does not apply to late single tenders received against Proprietary Article Certificate.
Authority: Board's letter No. 71/RS (G)/777 dated 1 st August 1981- (Annexure II/4-27)
No. 71/RS (G)/777 dated 19th April 1984 – (Annexure II/ 4-34)
and 85/RS(G)/777/2 dated 8th November 1985 ( Annexure II/4-38)
4. 9 When in response to a call for Limited Tenders (as distinct from single & Open Tenders under rules in force) only one tender is received, fresh tender should be invited except in urgent cases of purchases. The urgent has to be certified not less than S.A. Grade Officers for all purchase above Rs.5,000/- and by J.A. Grade Officers for purchase up to Rs.5,000/-.