dgsnd

SHRIKANT AKREDDIWAR 1

DIRECTORATE GENERAL OF SUPPLIES & DISPOSALS

SHRIKANT AKREDDIWAR

MTECH INDUSTRIAL ENGG.

MT14INDO23

DEPARTMENT OF MECHANICAL ENGG

VNIT,NAGPUR

DIRECT MARKETING

MATERIALS MANAGEMENT


TOPICS1. ORGANISATION AND STRUCTURE

2. PRINCIPLES OF CONTRACT

3. PROCUREMENT OBJECTIVE & PURCHASE POLICY

4. SUPPLY OF SPECIFICATIONS & DRAWINGS

DGS&D



ORGANISATION AND STRUCTURE1.1 ORGANISATION AND STRUCTURE: • Directorate General of Supplies & Disposals is the Central Purchase

Organisation of the Government of India headed by the Director General. It is an attached office under Department of Supply (Ministry of Commerce).

• It comprises of following main wings:1. Purchase2. Quality Assurance3. Shipping- clearance and forwarding4. Registration5. Training and consultancy

DGS&D



ORGANISATION AND STRUCTURE1.2 SCOPE AND FUNCTIONS :• Purchase and or/inspection of stores for – i. Central Government Ministries/Departments including their attached and

subordinate offices and Union Territories. ii. State Governments, Public Undertakings, Autonomous Bodies, and Quasi-

Public Bodies etc.• To arrange clearance & shipment of stores against contracts placed by the

DGS&D.• Registration of manufacturers, suppliers, stockists, Indian Agents of foreign

Manufacturers.• Training Directorate will arrange training for government departments and

Industries in the field of Purchase and Quality Management.

DGS&D



ORGANISATION AND STRUCTURE1.3 PURCHASE WING : • It carries out procurement action for conclusion of rate contracts and ad-

hoc purchases.

• The major procurement work is handled at Headquarters, New Delhi & the 3 Regional Supply Offices at Mumbai, Chennai and Calcutta have been assigned certain items of R/Cs.

• The indents for ad-hoc items shall be raised by the indenting departments as per the territorial jurisdiction of each office with following exceptions :

i. Jute and jute products- Centralised at Kolkata.ii. Coir and coir products- Centralised at Chennai.

DGS&D



ORGANISATION AND STRUCTURE• The territorial jurisdiction of the Headquarters office of DGS&D and the

Regional offices are given below.

• Regional Offices at Calcutta, Chennai and Mumbai also arrange clearance of imported cargo at all major ports.

DGS&D


Sr. No. Office States/UTs1 DGS&D , New Delhi J&K, Himachal Pradesh, Haryana, Punjab, UP, Rajasthan, UT of

Delhi & Chandigarh.

2 Dy. DGS&D ,Calcutta Orissa, Bihar, West Bengal Assam Nagaland, Meghalaya, Manipur, Tripura Arunachal Pradesh, Sikkim, Mizoram, Andaman & Nicobar Island.

3 Dy. DGS&D,Chennai AP, Karnataka, Tamil Nadu ,Kerala , Pondicherry and Lakshadweep

4 Dy. DGS&D,Mumbai Gujarat, Maharashtra, Goa Dadra & Nagar Haveli, MP and Daman & Diu.


ORGANISATION AND STRUCTURE1.4 QUALITY ASSURANCE WING : • It provides technical support to the purchase functions.

Functions :

• Formulation of Inspection Policies and Quality Assurance plans.• Formulating procurement specifications for contracting.• Assessment of vendors.• Registration of firms and suppliers registered as manufacturers, Indian

agents to foreign manufacturers, etc.• Evaluation and certification of the quality of supplies.

DGS&D



ORGANISATION AND STRUCTUREContinued....

• Quality Audit of Supplies at consignees end.• Interaction with indenters and industry in the preparation & up-gradation

of procurement specifications.• Interaction and active participation with BIS.• Testing and investigation of failure of Metallurgical products..• As Information centres in the respective states for closer interaction with

industry and the state governments.• Export Inspection on behalf of friendly countries.

DGS&D



ORGANISATION AND STRUCTURE1.5 SUPPORTING UNITS :1.5.1 PLANNING AND CO-ORDINATION (P&C) UNIT :• It deals with policy and procedures relating purchase, quality assurance,

disposal and shipping.

1.5.2 INTERNAL WORK STUDY :• This unit conducts methods study, staff measurement and keeps watch on

speedy disposal of work .

1.5.3 TRAINING AND CONSULTANCY:• Training Directorate in consultation with DOPT arranges for training of

DGS&D Officers & other organizations.

DGS&D



ORGANISATION AND STRUCTURE1.5.4 MANAGEMENT INFORMATION SERVICES (MIS) : • MIS Directorate acts as operational-cum-intelligence unit maintains the

database of pre and post contract operations. • The MIS Directorate brings out brochures on DGDS&D purchases, bulletin

on market prices & annual administration report of DGS&D.1.5.5 PUBLIC GRIEVANCES AND PUBLIC RELATIONS CELL1.5.6 MARKET INTELLIGENCE CELL (MIC) AND COST CELL :• MIC gathers and compiles information on suppliers, price, price trends of

various items on R/C.• Cost Cell functions under the officer in-charge of IF Wing of DGS&D and it

draws expertise from Purchase & Quality Assurance Wing for performing its duties.

• Cost Cell function is to analyse and work out the reasonable cost by comparing R/C prices with market prices.

DGS&D



ORGANISATION AND STRUCTURE1.5.7. INTEGRATED FINANCE (IF) WING : • A complement of the officers of the Integrated Finance Wing of the

Department of Supply is posted in the DGS&D.• This complement includes one Dy.Director (Cost) drafted from the office of

the Chief Advisor (Cost), Ministry of Finance, to advise the DGS&D on matters of cost fixation of price and formulation of price variation clauses etc.

1.5.8 LEGAL WING 1.5.9 ADMINISTRATION WING 1.5.10 VIGILANCE WING 1.5.11 LIAISON CELLS :• Railway & NSIC maintains a Liaison Cell in DGS&D to facilitate proper

interaction with DGS&D in respect of their procurement of items through DGS&D Contracts.

DGS&D



PRINCIPLES OF CONTRACT2.1 INTRODUCTION :• The Contract Manual of DGS&D gives information with regards to the

elements and principles of contract law and meaning of various legal terms.2.2 ELEMENTARY LEGAL PRACTICES : What is a Contract? • The proposal or offer when accepted is a promise, a promise and every set

of promises forming the consideration for each other is an agreement, and an agreement if made with free consent of parties competent to contract, for a lawful consideration and with a lawful object is a contract.

DGS&D

Assent of a person to

a work e.g. Tender

signed by tenderer

Proposal or offer

Promise

Agreeme

nt

Contract

Accepted Free consent

Lawful



PRINCIPLES OF CONTRACTELEMENTS OF CONTRACT :(a) Competency of the parties.(b) Freedom of consent of both parties.

(c) Lawfulness of object.2.3 COMPETENCY OF PARTIES :• Under law any person who has attained majority and is of sound mind or

not debarred by law to which he is subject, may enter into contracts.CATEGORIES OF PARTIES ENTERING INTO CONTRACT :(a) Individuals(b) Partnerships(c) Limited Companies(d) Corporations other than limited companies.

DGS&D



PRINCIPLES OF CONTRACT2.4 CONSENT OF BOTH PARTIES : • Chances of misunderstanding relates to –

a) Identity of the other party to the agreement,

b) Nature or terms of the transactions,

c) Subject matter of the agreement.

2.5 LAWFULNESS OF OBJECT :• The object of an agreement must be lawful (not opposed to public policy).

DGS&D



PRINCIPLES OF CONTRACT2.6 ACCEPTANCE OF AN OFFER :• The tender is accepted within given time limits, only if the terms of the offer

and the acceptance are same & lawful.

2.7 WITHDRAWAL OF AN OFFER & IT’S ACCEPTANCE :• Proposer may withdraw its offer at any time before its acceptance, keeping

informed the accepting authority.

• However some offers cannot be withdrawn before the expiry of the specified date, for which earnest money is deposited.

DGS&D



PRINCIPLES OF CONTRACT2.8 DISCHARGE OF CONTRACTS: • A contract is discharged or the parties are normally freed from the

obligation of a contract by due performance of the terms of contract.

• A contract may also be discharged:-a) By mutual agreement.

b) By breach.

c) By refusal of a party to perform.

d) In a contract where there are reciprocal promises.

DGS&D



PRINCIPLES OF CONTRACT2.9 STAMPING OF CONTRACTS : • Under Article 5 of the Indian Stamp Act, the agreement for sale of goods

(not being sold through a broker) is exempt from payment of stamp duty. Cases in which government would be liable are set out in Section 29 of the Act.

2.10 AUTHORITY FOR EXECUTION OF CONTRACTS :• The DGS&D officers are authorised by the President of India in exercise of

the powers conferred by Clause (I) of Article 299 of the Constitution to make contracts for services, supply or work on behalf of the Central Government.

• DGS&D makes similar contracts on behalf of the State Governments , PSUs & local bodies as per their request.

DGS&D



PRINCIPLES OF CONTRACT2.11 Governing law in purchases made by DGS&D :• All purchases made and contracts entered by the DGS&D are governed by

the Sales of Goods Act, 1939 and the Indian Contract Act, 1872.

2.12 General guidelines for entering into contracts by the DGS&D :• No work of any kind should be commenced without prior execution of

contract documents.

• The terms of a contract must be precise & free from ambiguity.

• Provision for recovery of liquidated damages for defaults on the part of the contractor.

DGS&D



PRINCIPLES OF CONTRACT• In selecting the tender to be accepted, the financial status of the

individuals and firms tendering must be taken into consideration in addition to all other relevant factors.

• Where escalation in respect of labour overheads, customs duties, freight etc is provided for in a contract, the basis for the calculation of the same should be clearly indicated.

• Lump sum contract should not be entered into except in cases of absolute necessity.

DGS&D



PROCUREMENT OBJECTIVE & PURCHASE POLICY

3.1 PROCUREMENT OBJECTIVE : The main objectives of public buying are :-

• To procure stores of specified quantity and specified quality.

• To procure stores on a competitive basis at the lowest reasonable price.

• To procure stores with a planned timely delivery.

DGS&D




3.2 PURCHASE POLICY : As per the guidelines of General Financial Rules (GFR) the purchase policy features are :• To make purchase of stores for public service to encourage indigenous

production.• To provide price and/or purchases preference upto a specified limit to

Cottage & Small Scale Industries and PSU over private industries• To ensure quality of products and timely supplies.

3.3 TYPES OF PREFERENCESa) Product Reservation b) Purchase Preference c) Price Preference

DGS&D




3.4 PRODUCT RESERVATION PURCHASE OF KHADI FROM

KVIC : • All Khadi Items ( confirming IS

specifications) are reserved for exclusive purchase from KVIC. List of all such khadi items is given in Annexure-3.

• The purchases of Khadi items from the KVIC is made by the DGS&D on single tender basis at the rates fixed by Certification Committee and these rates are reviewed by Costs Accounts Branch of MOF.

DGS&D




3.5 Purchase Of Handloom Textiles Items Including Barrack Blankets from KVIC/ACASH :• All items of handloom textiles required by Central Government Department

are exclusively purchased from KVIC and the additional demand fulfilled by Association of Corporations and Apex Societies of Handloom (ACASH) , as per list given in Annexure-4.

DGS&D




Continued....• These purchases are made on single tender basis. In the case of ACASH, the

final prices will be calculated by ACASH and fixed by the Ministry of Textiles by associating with Department of Expenditure, Ministry of Finance.

• The DGS&D will enter into a one time long term contract with ACASH.

• Payment terms for ACASH notified units will be the normal DGS&D payment terms, i.e. 95% payment on inspection & proof of dispatch and balance 5% after receipt of stores by consignee, within delivery period and on price finalization, if any.

DGS&D




Continued....

• KVIC/ACASH are treated equally with SSI units registered with DGS&D/NSIC. Both are exempted from payment of Performance Security Deposit. However, these facilities are not applicable to State KVI Boards.

• Purchase of Khadi & Handloom Textile items will be made by inviting sealed tenders.

DGS&D




3.6 Items Reserved for Procurement from SSIPresently, 358 items are reserved for exclusive purchase from Small Scale Industries (SSI), as per list given inAnnexure-5.

• This list is periodically reviewed by Standing Review Committee set up under the Chairmanship of Secretary(Supply) with Development Commissioner (SSI) as the Member-Secretary.

• In the process of procurement other things being equal, the purchases preference would be in order of KVIC/ACASH/SSI.

DGS&D




3.7 Procurement Of Other Items Not So ReservedFor the items falling under this category PSUs and Large Scale Private Industries will also be invited to participate.

3.8 Price Preference :3.8.1 The offers of the SSI get price preference up to 15% over the lowest acceptable offer from the large scale private sector units.

3.8.2 Price preference admissible to SSI will be accorded on a tender to tender basis, on merits of each case.

DGS&D




3.8.3 Price preference is not granted in following cases :i. Where competition exists amongst the SSIs alone or where the items are

exclusively reserved for purchases from SSI Units; &ii. Where the tenders are received from both the SSI Units and large scale

units and the lowest offers are from SSI units and their capacity is more than adequate to meet the demand in hand.

3.9 Small Scale Units When They Quote In Group :• The offer quoted by NSIC/State Development Corporation on behalf of some

SSI Units will be considered as an offer from SSI Unit registered with the DGS&D/NSIC except for items like Paints for Railways, Drug, Defence goods, Medical equipments, etc.

DGS&D




3.10 Industrial Co-operative Apex Units :• The Co-operative Societies and Industrial Cooperatives making the products

of cottage at the District, Regional and State level & having the central Apex Units. If they satisfy the definition of SSIs, then Co-operative Societies should be given preference over other SSIs.

3.11 Purchases Preference :• Purchase Preference would be applicable -

a) To PSUs, if a PSUs quotes a price upto 10% higher than the top price at which rate contract is decided.

b) To SSIs, if SSIs quote a price upto 5% over the PSUs.

DGS&D




• A PSU would not be entitled to any Price Preference when it quotes as an agent of an Indian or foreign manufacturer/supplier. However, where a PSU is selling goods or services of another PSU it would be allowed the benefit of price preference.

• The Private sector is not be eligible for Price preference.• The above policy of purchases preference is not applicable to State

Government PSUs.

• When a PSU defaults either in the delivery schedule or does not complete particular project satisfactorily, that PSU need not be shown purchase preference for a period of 3 years .

DGS&D



SUPPLY OF SPECIFICATIONS & DRAWINGS4.1 SPECIFICATIONS :DGS&D reviews & upgrades purchase specifications as per-

• IS specifications when the relevant product specifications are comprehensive and complete to enter into contracts.

• Indenter's specifications.• DGS&D specifications/Drawings which are developed in line with

requirements of the user departments.• Standard specifications formulated by major departments like Defence,

Railways, P &T, etc.

DGS&D



SUPPLY OF SPECIFICATIONS & DRAWINGS4.2 Specifications & Drawings to be expressed in Metric system :• Under the Standards of Weight & Measures Act, 1956, the metric system of

weights and measures was introduced in respect of the description of stores, drawings, specifications, etc.

4.3 Preparation of DGS&D Specifications & Drawings :• The Quality Assurance Wing at Headquarters is responsible for the

preparation of the DGS&D standard specification/Drawing for a product with reference to available national or international standards made on aspects like methods of testing, sampling plans, etc.

• All Drawings prepared by the Quality Assurance Wing shall be numbered and approved by an officer not below the rank of Director(QA) before being issued/sent out.

DGS&D



SUPPLY OF SPECIFICATIONS & DRAWINGS4.4 Sale of DGS&D specifications & Drawings at its Head Quarters at New Delhi and its Regional centres.

4.5 Registration of DGS&D specifications & Drawings is done by the Quality Assurance Wing.

4.6 Focal Officers :• The officers in-charge of Tender Sales of DGS&D centres and the field QA

stations shall be responsible for Maintenance & selling of an up-to-date list of DGS&D specifications and drawings for the stores which are purchased through the agency of DGS&D.

DGS&D



THANK YOU

DGS&D



QuestionsQue.1) Explain in detail about Organisation and structure of DGS&D.

Que.2) Explain in detail about the principles of contract followed by DGS&D.

Que.3) Explain in detail about the product reservation followed by DGS&D.

Que.4) Explain in detail about the price & purchase preference followed by DGS&D.

Que.5) Write short note on : DGS&D Specifications and Drawings.

DGS&D


Documents

dgsnd