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OIL & NATURAL GAS CORPORATION LTD.

CORPORATE - MATERIALS MANAGEMENTPolicy Monitoring & Control (P.M.C.) Section

MATERIALS MANAGEMENT MANUAL

(Corrections incorporated upto5th October 2012)

TEL BHAVANDEHRADUN - 248 003

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INDEXBrief Description Para No. Page No.

INTRODUCTION 1-5 1

CHAPTER-1

PURCHASE PROCEDURE* Dependent Factors 7 3* Classification of materials 8 3

- Proprietary Materials 8.2(a) 3- Non-Proprietary Materials 8.2(b) 3- Stock items 8.2(c) 3- Non Stock items 8.2(d) 4- Capital Items 8.2(e) 4- Stores & Spares 8.2(f) 4

* Functions of Purchase Department 9 8* Procedure for placing indent on Materials

Management 10 9- Variation in quantity 10(i) 9- Equipment/OEM wise Indents for 10(ii) 9

Stores & Spares

- Indication of Source of Supply 10(iii) 9- Expenditure Sanction 10(iv) 10- Specifications 10(v) 10- Indent delivery date(s) and urgency 10(vi) 11- Assessment of Requirement 10(vii) 11- Co-ordination with MM 10(viii) 12- Item-wise Estimated cost in Indent 10(ix) 12- Minor variation in specification 10(x) 12- Indication of Standard Sizes in Indents 10(xi) 12- Date of Indent 10(xii) 12- Recoupment of Stock items 10(xiii)-(xvi) 13

- Ad-hoc purchases 10(xvii) 13- Budget Allocation 10(xviii)-(xix) 13- Grouping of items 10(xx) 14- Separate indents for items independent 10(xxi) 14

in nature- Material code and consumption schedule 10(xxii) 14- Indents for stores & spares through RCMLO 10(xxiii) 15

* Centralised/ de-centralised purchases 11 16* Registration of firms, for indigenous purchase 12.1 18

on limited tender

PURCHASE METHODS 13 23* Purchase through DGS&D 14 23

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* Open tenders 15 24* Limited tenders 16 25* Procedure for purchases upto Rs. 5 lakhs. 16.4* Purchase on single tender 17 26

- Purchase of non-proprietary items 17.1 26- Purchase of stand by equipment and 17.2 26

accessories- Purchase of Proprietary Articles (PAC) 17.3 27- Hiring of services of Domain Experts 17.4 30

* Petty purchase/hand quotations 18 30- Petty purchases 18.1 30- Purchase against hand quotations 18.2 30- Purchases from State emporium/ 18.2.3 31

Super Bazar/Govt.Deptt/undertakings

- Inspection of non-consumable items 18.2.4 31* Purchase through Annual Rate Contract 19 31* Purchase through Board of officers 20 32* Emergency purchase 21 33

- Emergency purchase by user deptt 21.5 35

* Two Bid System 22 37* Short-Listing of Bidders 23 39

* Finalisation of Bid Evaluation Criteria (BEC) 24 39

and floating of tenders .

INVITATION OF TENDERS* Coordination and bulking of Demands for

purpose of inviting tenders 25 41* Enquiry register 26 41* Tender Sets to be kept ready and tender 27 41

intimation to be sent to prospective bidders* Submission of tender for publication in press 28 42* Time to be allowed to bidders to quote 29-29.3 42* Validity period 30 42* Notice inviting Quotations/tenders (NIT) 31 43* Number of copies of offers to be called 32 44

from bidders* Variation in quantity after invitation of tender 33 44* Sale of bidding document to firms with whom 34 45

business has been banned/suspended.* Tender fee 35 45* Purchase of bidding documents by Agents 36 46

in India* Cancellation of tenders-Refund of tender fee 37 46* Exemption from payment of tender fee 38 46* Intimation regarding invitation of tender to 39 47

trade Commissions/Consulates/Representativesof foreign Govts.

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* Tender fee 40 48* Offers without having prescribed bidding 41 49

document of ONGC* Sale of bidding document 42 49

* Issue of bidding document 43 50* Issue of bidding document after closing date 44 51* Receipt of tenders 45 52* Tender Box 46 52* Nomination of tender receiving / opening 47 53

officer(s)* Accounting of tenders 48 53* Opening of tenders 49 55* Numbering of Tenders/disclosure of 50-51 55

prices/readingout the rates of tenders* Opening of tenders in public 52 56

* E-mail/fax/telex/telegraphic offers 53 57* Cancellation/Re-invitation of tenders 54 57* Extension of tender opening/closing date 55 58

* Clauses in tenders/ Supply orders 56 59- Warranty & Guarantee 56.1. 59- Warranty clause 56.1.2 59- Penalty/Liquidated Damages/Cancellation 56 .2 59

clause- Liquidated damage/Failure & Termination 56.3 60

clause

- Procurement of goods 56.3.1 60- Fall clause 56.4 61- Inspection and rejection of material by 56.5 63

consignee(s)- Subletting and Assignment 56.6 63- Earlier Delivery 56.7 63- Pilot approval 56.9 64- Bulk inspection 56.10 65- E-Mail/Telegraphic/Fax offers 56.11 65- Arbitration clause 56.12 65- Submission of tender samples after 56.13 66

opening of tenders- Scale of Rebate 56.14 66- Catalogue and manual in case of new buys 56.15 66- General conditions 56.16 66

* Earnest money and Security Deposit 57 67- Earnest money/Bid bond/Bid Security 57.1 67- Security Deposit/Performance Bank 57.2 68

Guarantee/Contract Security- Security Deposit/Contract Security / 57-3 70

Performance Bond against development

orders/rate contract under importSubstitution programme

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- Release of Security Deposit/Performance 57.4 70

Bond/Contract Security- Release of Earnest Money/Bid Security/ 57.5 70

Bid bond/Security Deposit/Contract

security/PBG- Invoking of Bank Guarantee 57.6 71

(MM/53/2010 dated 17.05.2010)

* Provisions as per various Govt./Statutory 58 72guidelines

- Price preference to domestic bidders in ICB 58.2 72- Supplies of material and equipments 58.2.1 72- Methodology for calculation of price 58.2.1.3 72

preference- Granting of price preference 58.2.1.4 72

- Turnkey projects 58.2.2 73- Oil field services 58.2.3 73- Price/purchase preference to the products 58.3 73

of Small Scale Sector- Purchase of Lead Acid Batteries with 58.4

provision for buy-back of the used batteriesby the supplier.

* Comparative statement 59 74

* Clarification from bidders after tender opening 60 77

- Correspondence with Suppliers 61 77by indentors- Technical comments on offers 62 78- Level for technical comments on offers 62.4 78

* Formation of tender committee and its 63 79monetary limits

* Single item/group of similar items 64 79* Convening of tender committee 65 80* Brief for and level of tender committee 66 80* Constitution of Tender committee 66.1* Evaluation of bids by Tender Committee 67 81

and preparation of tender committee proceedings* Acceptance of Recommendations of T.C. 68 81

* Proposals to Executives Purchase 69 82Committee (EPC)

* Minutes of discussion of Executive Purchase 70 83Committee

* Consideration of offers 71 84* Purchase of Machinery and Equipment 72 84* Purchase of capital items and spares therefore 73 84

* Late tenders 74 85

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* Splitting of tenders/Supply orders 75 86

* Insufficient competition and Reasonability 76 88of Rates

- Placement of order when one offers 76.2 88is received- Certification of urgency 76.3- Reasonability of rates 76.4

* Negotiation 77 89* Powers for various activities 78 91

- Competent Authority for approving 78.1 91various activities

- Open tenders where TC is required 78.3(a) 91- Limited tender where TC is required 78.3(b) 92- Single tender on PAC tender 78.3(c) 93

where TC is required- Single tender on Nomination basis 78.3(c)(i)where TC is required

- Board Purchase 78.3(c) (ii)- Acceptance of TC recommendations when 78.3(d) 93

majority views are not acceptable- Acceptance of offer other than lowest 78.3(f) 93

technically acceptable offer (where TCnot held)

* Powers for placing educational/Development 79 93

order under Import Substitution* Miscellaneous powers of officers of MM 80 95- Powers for sanctioning freight by road 80.1

for materials carried- Powers for sanctioning freight by air 80.2

where air freight is cheaper than freightby alternative mode of transportation

- Powers for sanctioning handling and 80.3transportation charges at Railway Station,Stores Yards and Ware-houses

- Powersfor Expenditure sanction 80.4

and purchase of stationery* Power for purchase of proprietary Articles 81 97* Powers for purchase by negotiation 82 98* Signing of supply orders/contracts by 83 98

officers* Exercising of powers of MM discipline by 84 99

officers designated in Mechanical/Electrical/Civil etc.

* Observance of laid down procedure 85 100* Relaxation in conditions of tenders 86 100

- Relaxation in standard terms and 86.3 100

condition of supply order for purchasesform OEM/Manufacturer of proprietary items

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* Post contract issues 87 101* Acceptance of material in deviation to 88 101

specified specifications* Marginal adjustment in supply orders 89 102

Placing/Termination of supply orders/Contracts 90 102- Placing of supply orders/Contracts 90.1 102- Termination of contract/supply order 90.2 107

* Distribution of copies of supply orders 91 107* Follow up of supply orders 92 108* Service contracts 93 108* Extension of delivery / mobilization / 94 109

completion date* Extension in Delivery period and liquidated 95 110

damages in case of Development orders* Levy of liquidated damages for delays in supply 96 111

* Review of earlier decision 97 112* Copies of letter authorizing extension of 98 113

Delivery/Mobilization/Completion date* Procurement of mud chemicals 99 114

- Schedule for placing indent/supply orders 99.1 114for mud chemicals and handling thereof

- Classification of chemicals 99.2 114- Commodity chemicals 99.2(i) 114- Speciality chemicals 99.2(ii) 114- Procurement method 99.3 115- Commodity chemicals 99.3.1 115- Payment 99.3.5 116- Speciality chemicals 99.4 117- Information to be provided by Bidders 99.4.6 117

alongwith their offers- Sampling, bonding and debonding of 99.6 118

bulk material- Rejection of Bulk sample 99.7 119- Debonding and despatch of mud chemicals 99.8 119- Random Sampling 99.9 120- Purchase from manufacturers/public 99.10 120

undertakings- Earnest money/Security Deposit 99.11 120- Substandard product 99.12 120- Third party inspection for accepting bulk 99.13 121

supplies of mud chemicals from abroad- Procurement of Barytes and CMC 99.14 121

* Vendor Rating 100 124* Securing Adjustment-follow up of claims 101 124* Amount of compensation 102 124* Retirement of Documents from bank 103 124* Kardex showing progress of action on indents 104 124

* Period within which indents to be processed 105 125* Complaints/Representation Consideration 106 125

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CHAPTER-2

* Maintenance of Kardex 107 136* Maintenance of Buffer Stock 108 137* Fixation of maximum/minimum limits 109 137

- Indigenous items 109.2 138- Imported items 109.3 139

* Review of Minimum/Maximum limits 111 140* Preparation of recoupment requisition 112 140

CHAPTER-3* Project Stores 113 142

CHAPTER-4

CLEARING AND FORWARDING PROCEDURE* C&F section Responsibility 114 143* Transit documents-Receipt of 115 143* Arrival of materials 116 144* Damages/discrepancy in Receipt of materials 117 145* Raising of discrepancy report 118 146

- Discrepancies of trivial value 118.3 147

- Stock Discrepancy 118.4 147- Stock Verification Discrepancy 118.5 147* Despatch of materials 119 147* Despatch convoy note/despatch register 120 148* Escorting of material 121 149

CHAPTER-5

INSPECTION AND ACCOUNTING OF MATERIAL* Inspection of material 122 150* Inspection after expiry of contract delivery period 123 151

- Third party inspection for accepting bulk 123.3 152supplies of mud chemicals form abroad

* Receipt of Material 124 152* Packing material-accounting of 125 153* Preparation of Goods Receipt Voucher(GRV) 126 153* Binning of materials 127 154* Stocking of materials 128 155* Scrutiny of material Requisition/Issue note 129 156* Material requisition/Issue Voucher-Preparation of130 157* Disposal of indent-issue return Voucher 131 158

- Guidelines for stock holder 131.1-131.5 158* Issue of material-timings 132 159

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* Issue of material to out station 133 160* Items received against adhoc demand(s) 134 160* Recording of capital/stores and spares items 135 160

- Stores & spares 135.1 160

- Capital items 135.2 161* Return of material 136 162* Replenishment of spares 137 163* Transfer of material-preparation of 138 163

Materials Transfer Note(STR-19)(SA03)(MTN)* Submission of vouchers 139 164* Cancelled or missing vouchers 140 165* Central register of ledger/Stock cards 141 165

and auditable documents* Kardex cards-index register 142 166* Kardex cards maintenance of 143 166

* Kardex cards-numbering of 144 166* Kardex cards-opening of 145 167* Closing of Kardex cards 146 167* Kardex cards reconciliation of 147 167* Kardex cards-posting of/preparation 148 169

of adjustment vouchers* Duties of numerical ledger poster 149 170* Filling up of various formats 150 170

for computerised inventory control* Stock status report 151 170* Slow/Fast moving items 152 170

CHAPTER-6* Packing Section 153 172* Packing of material 154 172

CHAPTER-7

* Control office 155 174* Drill site material 156 174

* Disposal of unserviceable material 157 174* Issue hours of material 158 174* Payments of Bills 159 175

- Foreign Bidders/Indian Bidders 159.1 175* Railway credit notes 160 177

CHAPTER-8

COMPUTERISED INVENTORY CONTROL* Annexure of order schedule 161 178* Instruction for preparing Annexure of 161(i)- 178-244

order schedules 161(iii)(h)

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CHAPTER-9*e-PROCUREMENT 162*Reverse auction 162.10

- Types of Auction 162.10.4- Price Preference 162.10.5- Purchase Preference 162.10.6- Features of the Online event 162.10.10- Implementation of e-procurement 162.11

& Reverse Auction- Bid return procedure 162.12- Familiarization/training of vendors 162.13

CHAPTER-10PROCUREMENT OF PREMIUM BITS ON CONSIGNMENT BASIS

* Procurement of premium bits on 163consignment basis- Payment 163.14

FORMATS

STR-1 Goods Receipt Voucher 245

STR-2 Goods Receipt Control Register 246

STR-3 Consignment Inward Register 247

STR-4 Stores Requisition/Issue Note 248

STR-4A Stores Return Note 252

STR-5 Proforma for Maintenance of Records of 253

Capital/Stores & Spares

STR-6 Indent Form for Purchase 254

STR-6A Non-availability Certificate in case 258

of Emergency Purchase

STR-7 Kardex Card 259

STR-8 Gate Pass 262

STR-9 Stock Account Register 263

STR-10 Stock Taking Sheet-Capital Items 264

STR-10A Stock Taking Sheet-Stores & Spares 265

STR-11 Quotation Form 266

STR-12 Convoy Note Register 271

STR-13 Comparative Statement 272STR-14 Railway Receipt Register 274

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STR-15 Discrepancy Report 275

STR-16 Bill/Purchase Register 276

STR-17 Packing List 277

STR-18 Despatch Register 278

STR-19 Material Transfer Note 279

STR-20 Proforma for Explanation of Discrepant Items 280

STR-21 Material Adjustment Voucher/Loss Statement 281

STR-22 Register to watch finalisation of discrepancies 282

STR-23 Provisional Loss Statement 283

STR-24 Final Loss Statement 284

STR-25 Register of Serial Numbers of Stock Sheets 285

STR-26 Register of Losses 286STR-27 Daily Wagons Register 287

STR-28 Despatch Note 288

STR-29 Convoy Note 289

STR-30 Despatch Convoy Note 290

STR-31 Issue Control Register 291

STR-32 MT Note Register 292

STR-35 Emergency Purchase Inspection Requisition 293

STR-36 Opening Advice 294STR-37 Closing Advice 295

STR-38 Fortnightly Completion Certificate for months 296

STR-39 Port Arrival and Forwarding Note 297

STR-40 Purchase Order Upto Rs. 1,00,000/- 298STR-41 Vendor Performance Card 303

_________________

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INTRODUCTION

1.1 Work in the Oil & Natural Gas Corporation Ltd. (ONGC) has been

organised on the basis of functional Business Groups with commercialworking relationship among these groups.

1.2 The Business Groups are:

a) Explorationb) Drillingc) Operationsd) Technical

1.3 Director concerned of the above Business Groups assume effectivecharge of all functional aspects of Materials Management.

2.1 The procurement and stocking of materials is decentralised to the respectiveBusiness Groups at Headquarters and Regions. Every Business Group hasa structured Materials Management set up with suitable structure at theRegions and Headquarters. The Headquarters' Materials Management setup with the concerned Director is responsible for the following:-

i)

ii)

iii)

Procurement and related work including Steering Committeecases, Executive Procurement Committee cases. However policy

matters including liaison with the Govt. will be done by the Materials setup under Director (T).

Providing superintendence to the Materials set up at the Regionsunder the concerned Business Group with regard to differentfunctions of Materials Management for example InventoryControl, Disposal, Codification, Standardisation of specifications,Computerized MIS and Stock Verification etc.

Bulking of all high value indigenous and critical items to beprocured centrally for taking maximum advantage in price discount.

Such exercise would be done by the Headquarters Materials set upfor all Regions under the group.

2.2 The above functions are to be discharged by personnel of MaterialsManagement discipline who will be so allocated to each Business Groupboth at Headquarters and at the bases. However, the procurement of allindigenous materials except as mentioned above is decentralised with theirrespective Business Group.

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(MM/56/2010 dated 11.10.2010)

3.1 Various powers indicated in this manual, as per authorities delegated underthe provisions of BDP, shall stand automatically updated in accordance with the

revisions / amendments carried out to the respective provisions of BDP (from time totime), unless any other specific instruction is issued subsequently by Chief MM-Services/PMC with respect to the provisions of such revisions in BDP.

3.2 Materials procurement powers are to be exercised only by exception byfunctional executives other than Materials Management executives by specialnomination by the Competent Authority as a stop gap arrangement till such timeMaterials Management executives are in position.

4. The Materials Management Support Groups will function strictly within

the policy guidelines and such administrative norms as may be prescribedby Director (Technical).

5. Provisions of Materials Management Manual are duly approved by ExecutiveCommittee/steering Committee and ratified by the ONGC Board. Therefore,any deviation from the prescribed policy guidelines or norms on MaterialsManagement will require reference to Director(Technical) through theDirector Incharge of the Business Group for approval / ratification ofCompetent Authority wherever considered necessary.

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CHAPTER 1

CLASSIFICATION OF STORES

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CHAPTER-1

PURCHASE PROCEDURE6. Aim of the Materials Management Organisation is to procure, preserve

and deliver Materials in proper time to ensure smooth progress of theproject works and administrative machinery.

7. DEPENDANT FACTORS

7.1 Every effort will be made by the Materials Management Organisation tomeet the needs of the Engineers and the Scientists with regard to theMaterials. But the success of the aspiration of the Materials

Management depends very much on the proper planning and timelyintimation by the concerned Engineers / Scientists to the MaterialsManagement. It is, therefore, essential that these aspects are kept in viewto ensure timely procurement of materials/services.

8. CLASSIFICATION OF MATERIALS

8.1. The purchase can be made with advantage on the results of classification ofmaterial and stock levels. It is, therefore essential that either of these points isgiven treatment before passing on to the purchase procedure.

8.2 For procurement/accounting, the materials may be classified into followingcategories:-

a) Proprietary Materials: Proprietary materials are those which aremanufactured by the makers of the main plants themselves such asspare parts for Willys' Jeeps.

b) Non-Proprietary Materials: Non-Proprietary materials are thosewhich are manufactured by many firms such as chemicals andlaboratory equipments.

c) Stock Items: Fast moving items of regular consumption as alsospares required for running repairs and periodical overhaul ofmachinery and equipments are considered `Stock Items'.

The senior most Materials Management officer not below E-1(M.M.Officer) will have full powers to declare stores and spares as `StockItems'.

(Authority: Item No. G.1.1. of "The Delegated Powers, 1994")

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d)

e)

Non Stock Items: Non-stock items are those which areto be purchased against specific requirements of the indentingdepartments.

Capital Items:

i)

ii)

All items costing Rs.5, 000/- or more and with a life of more than oneyear are categorised as Capital Items".

Items costing less than Rs.5,000/- which have a life of more than oneyear and can be regarded as complete units in themselves (e.g. smallcompressors, pumps, electrical motors, welding sets, electrical testinginstruments etc.) are also to be categorised as "Capital Items".

(MM/56/2010 dated 11.10.2010)

Chief - MM Services will have full powers with the concurrence of Finance todeclare an item costing less than Rs.5,000/- as "capital item".

(Authority: Item no. MM1 of BDP-2009)

f) Stores & Spares: All the items, which cost less than Rs.5, 000/- and

have a life of less than one year are to be treated as "Stores &Spares".

8.3 The Inventories in ONGC have been broadly classified into two separategroups e.g. "Stores" and "Spares". These two groups have been further sub-divided into the following classes:-

Sl.No.

Class Description EDP ClassCode

AlphaCode

Remarks

1 2 3 4 5

STORES

1. Drill Pipes 01 DP

2. Casing Pipes 02 CP

3. Other Pipes and Pipe fittings 03 OP

4. Drill bits 04 DB

5. Other Drilling Stores (all othersub-groups under DT classexcluding those stated above)

06 DS

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6. Electrical material i.e. Electricalfittings, cables, insulatingmaterials etc. includingElectrical instruments.

07 EG

7. Building Materials and otherCivil Engineering Materialsincluding Timber

08 BM

8. Oil Well Cement 09 OC9. Chemicals including Mud

Chemicals10 CM

10. P.O.L. e.g. Oil, Grease andLubricating material etc.

11 OL

11. Metals e.g. Bounds, Bars,

Plates etc.

12 ML

12. General Tools on Stock 13 GT13. Misc. Stores i.e. drawings

materials, bolts, nuts, rope,screw, tents and tarpaulins etc

14 OT

14. Tubing, Pipes and Fittings 15 PT15. Well Head and X-Mas Trees 16 WX

SPARES

16. Spares for turbo drills and

connected items

05 TD

17. Spares parts for drillingequipment viz. Rigs and DieselEngine, Mud Pumps, Aircompressors etc.

21 DL

i) Diesel Engineii) Slush Pumpiii) Draw Worksiv) Crown Block, Travelling Block,

Swivel and Rotary table.

v) Other Spares18. Spare Parts fori)Production Equipmentii) Other Spares

22 PD

19. Spare parts for cementing unit 23 CM20. Spares parts for Geological

Equipment (i.e. Equipmentexclusively used for Geologicalworks).

24 GL

21. Spare parts for GeophysicalEquipment (i.e. Equipment

exclusively used for Geophysicalworks)

25 GP

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INDENTING FOR PROCUREMENT

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9. FUNCTIONS OF PURCHASE DEPARTMENT

9.1

9.2

i)

ii)

iii)

iv)

v)

vi)

vii)

viii)

The vital functions of Purchase Department are:

(i) What quantity to buy

(ii) When to buy

(iii) From whom to buy

(iv) At what price to buy

(v) What quality to buy

The Purchase Department while making any purchase should see that :

All the purchases are made for the properly authorised requisitionsclarifying the purpose for which these are required;

All the materials requisitioned are duly ordered out from the rightsource after full enquiries;

The right type and quality of the materials are bought from the cheapestsource;

only the right quantities are purchased in right time;

deliveries of all the materials are received by stipulated time;

supplier's bills are paid promptly to maintain good relations with the trade;

adjustments on claims due to shortage or due to any discrepancy aresecured; and

(MM/62/2011 dated 21.07.2011)

Pre-bid-conference (Wherever applicable):

(a) Pre-bid conference shall not be held in each and every case.However, Work Center may hold pre-bid conference in any case based onthe need/justification for the same with the prior approval of concerned L-1officer for cases where CPA is L-1 or below and of Director concerned forcases beyond the powers of concerned L-1 officer. Proposal for holdingpre-bid conference should be initiated preferably by the Indentor at theindenting stage. However, if a need for holding pre-bid conference is felt bythe TC in its meeting held before invitation of the tender, then TC can alsopropose for holding of the pre-bid conference.

(b) Wherever it is decided to hold pre-bid conference, in NIT, date for

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closure of sale of bidding documents should be specified, providingsufficient time for response. It should also be indicated in NIT/biddingdocuments that all bidders who buy bidding documents are invited to attendthe pre-bid conference. As soon as the sale of documents is closed, pre-bid

conference is to be convened (the date and venue of pre-bid conferenceshould be clearly indicated in the NIT and the bidding document). In the NITand bidding document as well as during the pre-bid conference, biddersshould be advised that ONGC expects the bidders to comply with thetender specifications/conditions which have been frozen after pre-bidconference, and hence non-conforming bids will be rejected straightaway.The indenting officer from the User department (who has framed/signed thespecifications) is to chair pre-bid conference(s) with competentrepresentative from concerned technical department (like E&C) and TC. Itshould be impressed upon the bidders to depute (for attending the pre-bidconference) representatives of status equivalent to the authority chairing

the conference.

(c) The issues raised by the prospective bidders during the pre-bidconference will be examined in detail by the Tender Committee. If due tothe points/doubts raised by the prospective bidders, tender specifications orany specific term(s), condition(s) which is not a part of Standard Terms andConditions of the Tender needs to be modified, then the same will beconsidered for modification. However, if there are any points/issues, whichhave been raised by prospective bidders during the pre-bid conference buthave not been resolved, then a second pre-bid conference will be heldwhich will be attended by all the Tender Committee Members. In this pre-bid conference, Tender Committee Members would again try to clarify thedoubts raised by the prospective bidders, with a view to ensure adequateparticipation.

(d) MM department in association with the concerned technicaldepartment will prepare minutes of the pre-bid conference and obtainapproval of the officer who chaired the pre-bid conference. Thereafter, incase no modifications are required in the BEC/specifications/tenderconditions, the bidder would be asked to submit their bids on due date andtime and sufficient time would be given to the bidders to submit their bids.

However, if, as a sequel to the pre-bid conference, modifications arerequired in the BEC and other tender conditions (excluding commercialconditions standardised by PMC), TC shall submit its recommendations forprior approval of the competent purchase authority (CPA) by providingdetailed justification for agreeing to such modification(s). In this regard,Director concerned shall have full powers including in EPC level cases,provided, such changes are not in conflict with the existing policy/procedure/ PMC instructions. However, in case of change of specificationsas a sequel to pre-bid conference, necessary approval shall be obtained asper para 10(v)-b.

(e) After obtaining such approval, these modifications should be madeand communicated (through fastest mode of communication like fax) prior

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to submission of bids with sufficient time to all the bidders to submit theirbids; no change will be allowed thereafter. In other words, pre-bidconference(s) will be used to freeze various specifications, terms andconditions of the tender before opening of bids.

(f) If as a sequel to the pre-bid conference, if an important tendercondition regarding specifications/scope of work/delivery period/mobilizationperiod/completion period requires major modification, then with a view tohave transparency in the bidding process, sale of tender documents can bere-opened. In that case, TC should deliberate the case and submit theirrecommendations through CPA/concerned L-I executive to the concernedDirector and Director-I/C (MM) for re-opening the sale of tender. The salewould be re-opened for a period of 15 days and for this purpose,advertisement would have to given in the press and information would haveto be posted on the ONGC tender web-site also. In such situation, pre-bid

conference would not be held again. The dates of re-opening of sale,closing of sale, re-scheduled tender closing/opening would be clearlyspecified.

10. PROCEDURE FOR PLACING INDENT ON MATERIALS MANAGEMENT

i)

ii)

iii)

Variation in quantity: Indents for annual requirement will beformulated carefully after proper scrutiny and based on latest approvedplan. Normally, no variation in quantity should take place but if thesame becomes unavoidable, it would be limited to + 20%. Indents forprocurement of machinery / equipment / stores / spares will be sent toconcerned Materials Management on prescribed format (STR-6)preferably on annual requirement basis. Piecemeal demands will beavoided.

Equipment / OEM-wise indents for stores & spares: Indents forprocurement of stores and spares will be raised equipment / OEM-wise.

Indication of source of supply in Indent: The indentors, whilesending indent to concerned Materials Management, will invariably

indicate minimum three number of parties who are likely to quotefor supply of items as per designed specifications. Where likely sourcesof supply are anticipated to be lesser than three, the reasons for notrelaxing the specifications or for not splitting the work / reducing thequantity will be brought to the notice of higher authority(ies), as indicatedbelow, for approval before sending indent to concerned Materialsmanagement

a) For cases upto the - Head of concernedvalue of Rs. 1.00 Business Group notcrore below E-7 level

b) For cases between - Concerned Regional Director

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Rs.1.00 crore and in case of Regions,concerned

upto Rs.4.00 crores GGM/GM in case of Institutesand Director concerned incase of Hqrs.

c) For cases above Rs. - Director concerned.4.00 crores.

(iv) Expenditure Sanction:

The indent must accompany the expenditure sanction. It will be ensuredthat total expenditure sanction as well as unit-wise / group-wiseexpenditure sanction is indicated in the indent.

(v) Specifications :

a) The indent must indicate clear and detailed specifications,drawings and samples, wherever necessary, so that there is noambiguity left for the tenderers to quote for correctmaterials. The specifications should be drawn up in general termswithout quoting reference to any particular firm or taking it as modelspecifications as far as possible.

(MM/45/2009 dated 14.10.2009)

b) Specifications (which should be as general and broad based as possibleto generate competition) once given alongwith the indent would beconsidered as final and no revision later on / back flow for recheckingwould be entertained.

Any change in specification (before tender is floated) vis--vis earliercontract/tender (in case of re-tendering) will need the approval of thecompetent authority as defined at para 78.1-(1)(i), with full justification.

Once pre-bid conference is held in a case, specifications should befrozen and after that no change in specifications will be permitted.

In case change of specifications becomes absolutely necessary as aresult to pre-bid conference, then same would require approval of thecompetent authority as defined at para 78.1-(1)(i), with full justification.

Where no pre-bid conference takes place, no change in specifications isadmissible except as provided herein. If the indentor seeks revision ofspecification with prior approval of concerned Director (recording reasonsfor modifications of specifications) and conveys the same to MMdepartment before opening of bids [technical bids in case of two-bidsystem], it should be notified to all prospective bidders well in time.

As far as possible in respect of turnkey projects and service contracts,

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efforts should be made to frame the specifications on CRINE conceptgiving functional specifications. In such tender, the practice of floatingRFP (Request for Proposals and thereafter, holding of pre-bid conferenceto firm up the specifications) should also be considered. In such case,

since specifications would be firmed up after interacting with bidders, nopre-bid conference needs to be held after bid invitation.

In case, specifications have been standardized within ONGC centrally,approval of such central standardizing authority will be necessary formaking changes in the specifications.

c) The indentors before sending specifications must make up their mindsabout the purchase of type of items required and its specifications.No team should be sent after the tenders have already been invitedto study the equipments. Such study, if necessary, be completed

before placing the indent.

d) The indentors should not ask for proprietary materials or draw upspecifications that would result in proprietary procurement, exceptin cases, where proprietary procurement is unavoidable.Specifications should normally be drawn in such a manner that there isa wide field of suppliers.

(MM/45/2009 dated 14.10.2009)

e) Whenever specifications have not been standardized, specifications willbe prepared by the concerned User / Indenting department. Suchspecifications shall need the approval of the competent authority asdefined at para 78.1-(1)(i). Wherever specifications have beenstandardized and approved at the level of concerned Director / EC, nofurther approval will be required.

(vi) Indent Delivery Date(s) and Urgency:

The indent must specify the time by which the material is required.In Indent, the definite delivery date and the place at which the

materials are to be delivered or dispatched, will be indicated. Theuse of such terms as 'IMMEDIATE', 'AS EARLY ASPOSSIBLE', 'URGENTLY REQUIRED', 'PRIORITY', as substitutes for theactual delivery dates are to be avoided and the delivery dates alwaysindicated in red ink in the following manner:-

a) by_________________________________________(date) (meaningthereby that the whole quantity is required by the date).

b) __________(Quantity by____________(date) remainderfrom___________ (months) to ___________ (months) (meaning

that so much is required by a particular date and the balance isrequired by monthly quota).

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c) From __________(month) to ______________ (month) (meaning thatequal monthly quotas may be delivered as appropriate).

(vii) Assessment of Requirement:

The indentor will be responsible to assess the requirement and toensure that there is no over provisioning.

(viii) Co-ordination with Materials Management:

Before preparing indent, the indenting section should coordinatewith the Materials Management concerned. This will help to makespecifications more realistic and would enable the indentor to ensurethat there is no stock in hand which can be used, after adaptation (ifnecessary).

(ix) Item-wise Estimated Cost In Indent:

The indentor should give the estimated cost item-wise in the indent. Ifthe cost of the item at the time of placing the contract is more than theestimated cost, but the price difference is Rs. 100/- or less, no reference willbe made to the indentor. If the price difference is more than Rs. 100/- thenupto 10% of the estimated cost or Rs. 1,000/-, whichever is less, noreference need to be made to the indentor. In all other cases, areference to the indentor will be necessary to confirm that there is budgetprovision and that full quantity of materials is still required.

(For Cost estimates, in case of OEM/OES cases, para 76.4.2(a) may be referred)

(x) Minor Variation in Specification:

Where minor variations in specifications are suggested by the PurchaseSection and are acceptable to the indentor and the cost is within the limitsstated above, the indent need not be referred again to the Finance or tothe Project Manager.

(xi) Indication of Standard Sizes in Indent:

As far as possible, indents should be for standard sizes. The PurchaseSection may refer back to the indentor informing the latter of the standardsizes available, before purchasing non-standard sizes.

(xii) Date of Indent:

If the above points are not complied with by the indentor, that indent will notbe treated as a firm indent, till all points are clarified. The date on which allthe points or irregularities in indent are settled that date will be considered

the date of indent. The time of completing of supply will be considered fromthat date.

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(xiii) Recoupment of Stock Items:

In the case of Stock items, the maximum & minimum and re-order levels

will be fixed scientifically and according to the instructions issued byDirector (Technical) in consultation with Finance keeping in view pastconsumption, rates, lead time and safety margins etc. Once these levelshave been fixed, the Materials Management (Stock) can take recoupmentaction without any further reference to Finance. However, the MaterialsManagement (Stock) will request the associated Finance to earmarkfunds before entering into any purchase commitment.

(xiv) The Materials Management (Stock) will intimate its requirements to thepurchase section through recoupment demands.

(xv) Wherever maximum/minimum and re-order levels have not been fixed inthe manner stated above, the indenting section will continue to assess itsrequirement and to place its indent on the purchase section after obtainingfinancial concurrence.

(xvi) The review of levels in respect of Stock Items will be carried out once ayear. However, if circumstances, such as change in the programme ofoperation or change in norms, necessitate it, the review will be carried outearlier.

(xvii) Ad-Hoc Purchases:

As far as possible, adhoc purchases will be avoided. Items, for which thereis repeated emergency purchase, will be added to the list of Stock Items,which would be progressively increased and the list of Non-Stock itemscorrespondingly reduced.

(xviii) Budget Allocation:

Quarterly statement of budget allocation and utilisation would be forwarded

by Associated Finance to the concerned Materials Management / ProjectHead in respect of Stock and Non-Stock Items.

(xix) When a budget is drawn up on a functional basis and gives the break-up ofthe provision of materials, itemwise indent upto Rs.5,000/-within thebudgetary provision, need not be referred to Finance again for concurrence.However, in the absence of budget on functional basis, prior financialconcurrence will be obtained by the indentor before placing indent on thepurchase section, irrespective of the amount involved. The sanction fromthe competent authority will accompany all indents.

(xx) Grouping of Items :

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Whenever the purchase involves items to be purchased in groups, the samegrouping should be intimated alongwith indent by the indentor.

(xxi) Separate indent for items independent in nature

It is necessary that sieving of items is properly done at the indent stageitself so that items independent in nature are indented separately.

(xxii) Materials Code and Consumption Schedule:

It will be ensured that material code and likely consumption schedule ofStores and Spares is indicated in the purchase indent failing which theindent will not be accepted. In case of new buys, provision will be made intender document and supply order to effect that the supplier will sendcatalogue and manual of relevant item(s) to Inventory Control Cell under

intimation to order placing authority within two months from the date of thereceipt of supply order (or as desired by the order placing authority dependingupon the delivery period).

In case of new buys and where permanent codes have not been allottedRegional Corporate Materials and Logistics Organisation (RCMLO) will beconsulted who will act as Coordinating Agency of the Project / Region andwill interact with Inventory Control Cell to get the permanent code. Where thematerial code is not communicated by Inventory Control Cell within 7 daysfrom the date of reference to them, temporary code will be allotted by theRCMLO. Indent can be raised by the Indentor with such allotted temporarycode with the prior approval of concerned Regional Director. Permanentcode number obtained by RCMLO will thereafter be notified to concernedIndentor and Purchase Section.

(xxiii) Indent For Stores & Spares Through RCMLO:

All Indents for procurement of stores and spares will be routed throughRCMLO at Regions / Projects and through CMLO in the Hqrs. who willscrutinize the same with reference to stock in hand, material in pipe lineand likely consumption schedule. This exercise should not take more than

five days.

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CENTRALISATION / DECENTRALISATIONOF PURCHASES

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11. CENTRALISED / DE-CENTRALISED PURCHASES

11.1 In Drilling Business Group, purchase functions of the following items wouldbe handled as under:-

Sl. No. Item Base

1. Barytes Chennai

2. CMC Dehradun

3. Oil Well Cement and Cement additives Mumbai

4. Bits

IndigenousImported

DehradunDehradun

5. Blow Out Preventors and accrssories Dehradun

6. Rig (purchase and service contracts)

OnlandOffshore

DehradunMumbai

7. Spares and assemblies for on-land rigs Dehradun

8. Spares and assemblies for offshore rigs Mumbai / Chennai

9. Well HeadsOnlandOffshore

DehradunMumbai

10. Imported mud chemicals and mud additives Dehradun

11. Casings 30 and 20 required for offshoreoperations exclusively

Mumbai

12. Others - whether indigenous or imported for on-landand off-shore operations

Dehradun

(Authority : 1/20/85-MD dt. 12.9.85 as amended)

11.2 Procurement functions in respect of other Business Groups will be handledas per instructions issued from time to time.

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11.3 Procurement of Building materials

(MM/56/2010 dated 11.10.2010)

i) Various types of building materials can be purchased and supply ordersplaced by Civil Engineers upto the Powers delegated to them vide para No. EW8of BDP-2009, subject to following the normal purchase procedure.

ii) All such purchase shall be against sanctioned estimates for whichadministrative approval and expenditure sanction of Competent Authority exist.

(iii) The Engineers would be empowered to purchase all types of buildingmaterials for civil works except cement and steel which will be purchased by themonly in emergency. They can however, request the Materials Management

irrespective of the above powers to make purchase for them in cases wherepurchase can be deferred and long range advance planning is possible.

iv) The word "Building materials" includes all type of materials required to carryout work including all tools, plants implements, etc.

(Authority: Item no. EW8 of BDP-2009)

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REGISTRATION / EMPANELMENT OF FIRMS

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12.1 REGISTRATION OF FIRMS FOR INDIGENOUS PURCHASES

ON LIMITED TENDER BASIS

12.1.1 For the purpose of sending enquiries for indigenous purchases against

limited tenders to be invited in the normal limit of the value of limited tender,registration of firms will be done by Head of Materials Management(TBG) atRegions / Projects / Hqrs keeping in view the requirement of the workcentre. Firms willing to register at more than one work centre, will requireto get themselves registered with all such work centres. The firm(s) will beregistered for each group of items separately for which they will need to sendseparate application alongwith application fee as indicated in para 12.1.3.The firm(s) will be registered for a period of three years. In RegistrationCertificate also it will be made clear that the facility for exemption frompayment of earnest money / furnishing of bid bond will be available in normallimited tenders only.

12.1.2 The following norms will be adopted for registration of firm(s) ontender-wise basis:-

i)

ii)

iii)

Income Tax Clearance Certificate.

Sales Tax Registration number both State and Central.

50% of annual turn over of the item(s) / group of item(s) forwhich the party requires registration, duly certified by aChartered Accountant.

12.1.3 Subject to provision in para 12.1.7, a non-refundable application fee ofRs.50.00 will be charged from each party for registration for each group ofitem(s). In addition, a non-refundable registration fee of Rs.50/- for eachgroup of item(s) will also be charged before issuing Registration Certificate ifthe party concerned meets norms specified in para 12.1.2 above.

12.1.4 While confirming registration number of the firm, it will clearly be advisedthat they should apply for renewal of registration at least 3 months prior toexpiration of the validity of registration. Renewal of registration will be done

on the basis of past satisfactory performance.

12.1.5 A non-refundable fee of Rs.50/- will also be charged for renewal ofregistration of the firm after every three years.

12.1.6 In case a firm already registered with a work centre, wants to get itselfregistered with other work centre(s) for same item(s) then a freshverification of Income Tax Clearance, Sales Tax Registration and annualturnover will not be necessary and the party will be registered for thesame monetary limit and period upto which its registration with initial workcentre is valid.

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12.1.7 Firms registered with DGS&D / NSIC will be treated as registered firms of

ONGC for the item(s) they are registered with DGS&D / NSIC for sendinglimited tender enquiries provided a formal request alongwith non-refundable registration fee of Rs.50.00 for each group of item(s) and proof of

such registration from such firms has been received.

12.1.8 No application fee will be charged from such firms.

12.1.9 It will be ensured that enquiries are sent to all firms registered for the item(s)required to be purchased. In case the number of registered firms is large,enquiries may be sent by rotation to ensure healthy competition and allowingall firms an opportunity to compete.

12.1.10 Any case for de-registration of firms shall require approval of an officerat E-7 level (General Manager).

(MM/33/2008 dated 29.04.2008)

Enti re prov isio ns under p ara 12.2 (i.e. 12.2.1 to 12.2.7) deleted.

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PURCHASE METHODS

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PURCHASE METHODS

(MM/56/2010 dated 11.10.2010)

13. Purchase will be made through any of the following methods:-

i) Purchase through Directorate General of Suppliesand Disposals (DGS&D)ii) Open tendersiii) Limited tendersiv) Single tenderv) Petty purchases / Hand quotations.vi) Annual Rate Contractsvii) Board of Officers

14. PURCHASE THROUGH DGS&D

14.1 There are three ways of purchase of materials through the DGS&D:-

i)

ii)

iii)

By placing indent on DGS&D who on his side invites the tenders fromthe dealers on his approved list.

Through DGS&D Rate / Running Contract: In this case also theindents are to be placed on DGS&D who places order on the firmswith whom they have concluded the rate / running contracts, such aspetroleum products.

Through Rate Contract concluded by the DGS&D: In this case noindent is to be placed on DGS&D but the officer of the Organisationwho is appointed by the DGS&D as "Direct Demanding Officer", canplace order direct with the firm on Rate Contracts concluded by theDGS&D.

14.2 Full advantage of the DGS&D Rate / Running Contract should be taken asfar as possible when such contract exists and the delivery period suits ourrequirement. No separate tenders need be invited when the delivery periodstipulated in the DGS&D Rate / Running Contracts is acceptable. However,

where the delivery period of any such contract is not suitable, the PurchaseOfficer may place a direct supply order on the DGS&D Rate contractors onDGS&D rates or lower rates and where it is not possible to obtain supplyof an item either by operating on the DGS&D Rate Contract or by placing adirect supply order on the DGS&D Rate Contract Holders because thedelivery period does not suit our requirement, the Purchase Officer mayresort to the other methods of purchase outlined in para 13 above eventhough the items are available against DGS&D Rate/Running Contracts.

14.3 All other items not covered by the Rate / Running Contracts will bearranged by the Materials Management by inviting tenders.

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16. LIMITED TENDERS

(MM/63/2011 dated 29.09.2011)

16.1 For purchases of the value of Rs. 25.00 lakhs or less, the tender need notbe advertised through the press.

In accordance with the instructions issued from time to time, all limited tendersof value above 5.00 lakhs are to be posted on ONGCs tender website, alongwith the pre-qualification criteria which has been used for selecting thevendors. After framing the pre-qualification criteria, indentor would forward thename of those vendors to the MM Department who meet the pre-qualificationcriteria. Besides issuance of the tender enquiry to vendors who meet the pre-qualification criteria, MM Department would also publish the tender enquiry on

the website along with the pre-qualification criteria. After publication of thelimited tender enquiry on the web site, tender enquiry can also be issued tothose vendors who request ONGC for issuance of the tender enquiry and whomeet the pre-qualification criteria. Such requests are to be entertained within10 days of publication of the tender enquiry on the web site. IndentingDepartment would have to certify that such vendors meet the pre-qualificationcriteria and based on this certification, enquiry would be issued by MMDepartment.

The names and addresses of vendors to whom the Limited Tender enquiryhas been issued should also be posted on the website alongwith the PQC.

For limited tenders upto Rs 5 lakhs, the purchase officer may send enquiriesto vendors known to ONGC. The enquiries will also be sent to the registeredvendors as defined in para 12.1 under the heading Registration ofVendors." In-charge MM at each work center shall make necessaryarrangements for registration of vendors as per para 12.1, keeping in view ofthe requirements of the work center.

(MM/46/2009 dated 04.11.2009)

(Note deleted) NOTE: Minimum three quotations must be received beforetender is finalised.

16.2 (MM /6/2002 dated 23.04.02)

Enquiries should be sent to as many firms as possible to ensure competition.In cases where the number of known/registered firms dealing with thematerials under purchase is large, enquiries may be limited as given below.In such cases, firms will be sent enquiries in rotation ensuring healthycompetition and allowing all firms an opportunity to compete over a period oftime. The list of selected suppliers, to whom enquiries have to be sent, will

be approved by the competent purchase authority. The minimum number ofinquiries to be floated will be as under:-

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For tenders upto Rs.1,00,000/- 5 enquiries

For tenders from Rs.1,00,001/-to Rs.5,00,000/- 7

For tenders from Rs.5,00,001/- to Rs.10,00,,000/- 8 "

For tenders from Rs.10,00,001 to Rs.25,00,000/- 10 "(MM/8/2003 dated 02.04.03)

(MM/33/2008 dated 29.04.2008_

16.3 For tenders valuing less than or equal to Rs.5 Lakhs, when the number ofvendors known to / registered with ONGC is less than the required, the

enquiry may be sent to all such vendors after obtaining the approval of anofficer one level higher than the Competent Purchase Authority.

For tenders valuing above Rs.5 Lakhs, if the number of vendors who meetthe PQC are less than the required, approval of an officer one level higherthan the sanctioning authority shall be obtained by the indenting departmentand conveyed to MM department alongwith the indent. However, concernedDirector will have full powers to approve such cases, including EPC levelcases.

16.4 Procedure for purchases upto Rs 5 lakh:

(MM/33/2008 dated 29.04.2008)

The dealing officer will float limited tender enquiries [as per specified format ofSTR 11], as per para 16.1 & 16.2 above.

After receipt of offers within the closing time and date, the offers shall beopened by the nominated opening officers from MM and F&A. After opening,the offers will be handed over to the concerned dealing officer who shalltabulate the data from the offers in the comparative statement, to be prepared

within one working day. In all cases where technical evaluation is involved,the duplicate copy of the offers are to be referred within one working day tothe indentor for technical comments. The indentor [not below E-1] shall furnishthe technical comments immediately, which in no case shall exceed twoworking days. Subject to provisions of Para 78.3 (f) of this Manual, theapproval of a Purchase Authority [not below E-4(MM)] will be obtained beforeplacing order (within 7 working days from opening of bids) as per Annexure Aof STR 40, without holding Tender Committee).

17. PURCHASE ON SINGLE TENDER

17.1 Purchase of non-proprietary items

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(MM/56/2010 dated 11.10.2010)

Purchase of non-proprietary items, on single tender basis, will be resorted to only inthe situations of emergencies like flood, fire, civil disturbances, war, cyclones, blow

out and operational break down, as per provisions under para 21. Detailedjustification for resorting to emergency / operational break down should be recordedat the time of processing the proposal for approval of competent authority as perpowers delegated under item No. F5 and ME1 of BDP-2009.

(MM/56/2010 dated 11.10.2010)

17.2 Purchase of proprietary items:

17.2.1. An item is Proprietary, if that item (Hardware/equipment/Software/stores) ismade/developed and marketed by a particular firm having the exclusive right to

manufacture and sell it. Such proprietary Article/ Item can be procured, if theindenter ensures and certifies that only specific make and model are acceptableandno other make and model is acceptable as substitute on technical reasons.Purchase of proprietary items should be made if it is absolutely essential.

17.2.2 Declaration of an item as proprietary will be done with the approval ofcompetent authority, as per powers delegated under item No. R1 and MM2 of BDP-2009. However, before submitting the proposal to competent authority for approval,the same will be examined by the In-charges of MM and Finance disciplines of therespective work center. Where there is an alternative to suggest, In-charges ofFinance / MM disciplines will advise the indentor to examine and consider thealternative.

17.2.3 . Accordingly, for such purchases of proprietary items from single source,Indenter shall provide a Proprietary Article Certificate (PAC) alongwith indent, asper following format:

PROPRIETARY ARTICLE CERTIFICATE (PAC)

(i) The required item(s) (i.e.*) is/are manufactured only byM/s................................................................. and no other make is acceptable assubstitute for technical reasons. (*Wherever specific model / brand is required,the same should also be specified).

(ii) Approval of competent authority, as per item ..** of BDP-2009 (asamended from time to time) has been obtained for purchasing the requireditem(s) as a proprietary article. (** indicate relevant BDP item).

(iii) The In-charges of MM and Finance disciplines of the work centers haveexamined and cleared the proposal for purchasing the required item(s) as aproprietary article.

(Signature)Name and Designation..

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Date:Place:

[Note: The certificate should be signed by the authority competent to approve the

Technical specifications (as per para 78.1-1(i)), in accordance with the value of thepurchase].

17.2.4 Features of the model / version of the products are regularly upgraded bythe manufacturers. Similarly, new products and new technologies are beingintroduced very frequently and the market conditions are likely to vary at differentpoint of time. Therefore, the approval for purchasing an item as proprietary article(PAC) should be obtained separately on each occasion of its purchase.

17.2.5 The purchase of proprietary articles against the Proprietary Article Certificateshould be made either from Original Equipment Manufacturer or from AuthorisedDealers/Distributors/ Stockists of Original Equipment Manufacturer (and not througha third party).

17.2.6It must be ensured that such items purchased against PAC are consumedwithin one year from the date of receipt of the material.

17.3 Purchase of stand-by equipment & accessories and spares from OEM:

17.3.1 Stand by equipment and accessories which form part of the main equipment,and are required for ready replacement and which can not be replaced with other

makes on technical grounds can be purchased from OEM or authorizedDealers/Distributors/ Stockists of OEM, as proprietary article without PAC providedIndenter certifies that no other make or model can be used as replacement ontechnical ground and competent authority approves the same in consultation withMM. In such cases, approval of competent authority as per powers delegated underitem No. R1 and MM2 of BDP-2009 shall be obtained.

17.3.2Spares for vehicles / machineries / tools / equipment, which are manufacturedonly by particular firms and for which no substitutes are available are to be treatedas proprietary articles. No PAC would be necessary for procurement of suchitems. For carrying out such purchases, approval of competent authority as per

powers delegated under item No. R1 and MM2 of BDP-2009, shall be obtained.However, before submitting the proposal to competent authority for approval, thesame will be examined by the In-charge of MM discipline of the respective workcenter. These items are to be procured from Original Equipment Manufacturers /Authorised Dealers/Distributors/ Stockists of Original Equipment Manufacturers, asper procedure laid down in para 17.3.3 below.

(MM/51/2010 dated 29.01.2010)

17.3.3 For procurement of spares of proprietary / non-proprietary nature, thefollowing procedure will be followed:-

i) In the case of proprietary spares, the OEMs should be asked to intimate

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ii)

iii)

iv)

v)

details of all their Authorised Dealers/Distributors/ stockists valid for aperiod of one year from the date of intimation, for supply to India. OEMshould also be requested to provide a confirmation that they do not haveany other authorised Dealers / Distributors / Stockists other than the

ones intimated by them i.e. OEM themselves.

The OEM will also be requested to notify to ONGC if any change occursin Authorised Dealers/Distributors/ stockists during the period of oneyear. Enquiries should be sent to all the Authorised Dealers/Distributors/stockists so intimated by OEM, including the OEM.

In such types of procurement from OEM/their authorized Dealers/Distributors/ Stockists etc., even though enquiry would be sent to morethan one, but this shall not be categorized as limited tender and variousprovisions of limited tender like framing of PQC, loading on web site etc.

shall not be applicable. The competent purchase authority for OEMpurchases as defined in the BDP shall be applicable in such cases also.

When the OEM confirms of not having any AuthorisedDealers/Distributors/stockists, enquiry may be sent to OEM only.

In case OEM does not respond to our request for sending us details ofAuthorised Dealers/Distributors/ stockists, enquiry may be sent to OEMonly..

Besides OEM and their Authorised Dealers/Distributors/ stockists, OES(Original Equipment Supplier), can also be considered as an authorisedsource of supply, if they supply directly and not further through any otheragency

(MM/33/2008 dated 29.04.2008)

For procurement of consumables conforming to standard specificationslike API etc. (such as slush pump consumables) and standard spareslike bearings, belts and chains etc. of general and detailedspecifications, open tenders may be invited as a number of

manufacturers produce such items. However, for purchases of theseitems upto Rs.25.00 lakhs limited tenders will be invited.

(MM Amendment no. MM/23/2006 dated 28.04.2006)

17.4 Hiring of services of Domain Experts:

Domain Experts are individuals with established reputation for specifiedknowledge and experience in specific areas of Science and Technology. It isneither feasible nor desirable to engage such individuals through tenders.

Therefore,

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i) Each Director shall constitute a Technical Team to identify

Domain Experts in relevant disciplines,ii) The identified Domain Experts shall be contacted by the Director

for acceptance of retainership followed by empanelment, and

iii) The concerned Director may request the services of particularDomain Expert for specific studies and tests.

18. PETTY PURCHASES/ HAND QUOTATIONS

18.1 Petty Purchases:

(MM/64/2012 dated 31.01.2012)

18.1. Purchase upto Rs. 10,000.00 (annual cap as per Item No. RG2 of BDP) at atime may be made without formal enquiries or without obtaining hand

quotations by User Departments themselves.

(Authority: Item RG2 of BDP-2009

18.1.2 A statement of petty purchases made by the User Departments will besent to the Materials Management concerned at the end of each month sothat taking into account the frequency of such purchases these may beconsidered for inclusion in the list of stock items to avoid further piecemealpurchases.

(MM/56/2010 dated 11.10.2010)

18.1.3No GRV will be raised for petty purchases of consumable items upto Rs.10,000.00 and such transactions need not be routed through concernedMaterials Management. Also no covering supply order need be issued forpetty purchases of consumable items upto Rs. Rs. 10,000.00.

(Authority: Item RG2 of BDP-2009)

GRV shall also not be required for purchase of materials for special events likeSeminars, Conferences, training, meetings and sports events provided the items are

to be consumed during the same event and need not to be kept in stock .

(Ref. Note. 17.16(iv) of Appendix 1 of BDP-2009)

18.1.4 Inspection of Non-Consumable Items :

(MM/56/2010 dated 11.10.2010)

No inspection through Quality Assurance Department for purchases ofnon-consumable items upto Rs.10,000.00 will be necessary. But,regularisation of transaction in such cases will be done against submission of

pre-receipted indent alongwith complete details of the purchased item (i.e.

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copy of bill etc) and acceptance of material by the indentor, to concernedMaterials Management (stock).

The requirement should be applicable only in cases GRVs are created for

value upto Rs. 10,000/-, say for Capital items, for other cases as even GRVsare not created, the item shall not be inventorised at all and booked directly toexpenditure head.

18.2 Purchase against Hand Quotations

(MM/64/2012 dated 31.01.2012)

18.2.1 Purchase above Rs. 10,000 but upto Rs. 50,000.00 (annual cap as per ItemNo. RG2 of BDP) may be made either by User Department or by the PurchaseDepartment by obtaining at least three hand quotations. A list of prominent and

reliable local firms will be maintained by all concerned. Hand quotations will becollected on rotation basis whenever there is scope for rotation. A certificate willbe given by the Officer making such purchase that hand quotations were obtainedon rotation basis. The names and addresses of the firms from whom quotationsare obtained will be given in the certificate. Where the number of dealers is limitedi.e. less than six, rotation system need not apply.

(Authority: Item RG2 of BDP-2009)

18.2.2 User departments will not go for direct purchases over Rs. 50,000.00 at atime barring operational emergencies involving breakdown in operations. Inoperational emergencies the User Department may make direct purchases as perpowers delegated in the Book of Delegated Powers.

18.2.3 Purchase from State Emporium / Super Bazar / Govt. Deptt /Undertakings

Whenever items are available in State Emporium / Super Bazar / StateGovt. or Central Govt. Undertakings, purchases are to be made from themonly and in those cases, the requirement of obtaining three handquotations will not be necessary.

19. PURCHASE THROUGH ANNUAL RATE CONTRACTS

19.1 For items required continuously throughout the year in large quantities, it maybe advantageous to have a rate contract on lines similar to those of theDGS&D. These contracts will not be for longer than one year and will befinalised after inviting open tenders and after negotiations in consultationwith finance.

19.2 Items for which annual rate contract should be concluded will be specifiedand this list will be reviewed and additions made every year depending upon

the past consumption or on anticipated consumption. Annual rate contractswill not be entered into in the case of items for which the market shows

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marked downward trend. In order to provide against a fall in the marketprice during the currency of the rate contract, the contract should includethe standard Fall Clause as in DGS&D Rate Contracts.

(MM/56/2010 dated 11.10.2010)

20. PURCHASE THROUGH BOARD OF OFFICERS

Purchase by a board of Officers will be resorted to only in exceptionalcircumstances when the materials/ services / works are either required urgentlyto overcome an emergency or because the indentor is not able to give firmed up /detailed specifications (necessitating on the spot decision based on the availabilityin the market) so that procurement cannot be made under the normal purchaseprocedure, provided further that:

i)

ii)

iii)

iv)

v)

Prior approval of the Competent Purchase Authority, not below L-1executive, is obtained and furnished alongwith the Purchase Indent,before resorting to purchase through a board of officers.

Competent Sanctioning Authority not below Level-1 is empowered toconstitute a Board of Officers comprising MM Executives havingpurchase power for value of Board Purchase and an executive each ofequivalent level from indenting Department and Finance. Proceedings ofsuch purchase boards (comprising of executives of competent level) willnot need approval of any authority, since spot decisions are required.

If for any reason it is not possible to constitute a purchase board withcompetent officers, the board may be constituted with an officer of thenext below rank. However, the reasons should be recorded in writingand the proceedings of such a purchase board should be got ratifiedby the authority constituting the board.

(MM/54/2010 dated 04.06.2010)

For carrying out the purchase, the board of officers shall explore the local

markets as first priority, before seeking offers from outside the city/town.Further, the board of officers shall obtain as many quotations as possibleso as to determine the reasonability of rates. In case the supplier(s) donot agree to give the hand quotations this fact will be recorded by theboard of officers in their proceedings.

(MM/56/2010 dated 11.10.2010)

The approval for resorting to purchase through a board of officers shallbe accorded after ensuringthat the indentor has obtained and rendereda non-availability certificate on STR-6A in respect of the items (other

than crockery, cutlery, linen and items of complimentaries) to bepurchased.

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vi)

vii)

viii)

The board of officers shall obtain as many quotations as possible so as todetermine the reasonability of rates. In case the supplier(s) do notagree to give the hand quotations this fact will be recorded by the

board of officers in their proceedings.

The board of officers will, if necessary, be authorised to make purchasesfrom market on cash basis.

Curtain Cloth: Curtain cloth will be purchased from Millshops / Govt. /Emporiums on as and when required basis but by clubbing therequirement. If these are not located nearby, purchase may be madefrom authorised stockists / dealers. In exceptional cases, the above canbe relaxed with reasons to be recorded in writing, by the concerned Level-I executive.

(MM/56/2010 dated 11.10.2010)

21. EMERGENCY PURCHASE

21.1 Emergency purchase (including hiring of services on emergency), directly byuser department without reference to Purchase Wing, shall be resorted in thesituations of emergencies - like flood, fire, civil disturbances, war, cyclones, blow out,operational break down or likelihood of operational breakdown where it is necessaryto restore normalcy of equipment, machinery or vehicles and the urgency does notpermit following the normal methods of purchases.

21.2 Detailed justification for resorting to such emergency purchases should berecorded at the time of processing the proposal for approval of competent authorityas per powers delegated under item No. F5 and ME1 of BDP-2009.

21.3 Reporting of single tender cases on nomination basis would be done to theconcerned Director/EPC/Board, as per prevailing instructions issued from time totime.

21.4 Quantity to be purchased shall be restricted to the minimum essential andthe purchase shall be accounted for immediately by submitting Pre-receiptedindent alongwith the Inspection Report, Invoice, Delivery Challan and SupplyOrder, to the Materials Management (Stock) for raising GRV.

21.5 Concerned Indentor / User department shall ensure sufficient stock of criticalspares and the materials for which repeated emergency purchases have beenmade, by following normal methods of purchase through MM department.

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TWO BID SYSTEM

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22. TWO BID SYSTEM

(MM/59/2011 dated 27.04.2011)

22.1 Two Bid system will be compulsory for all the tender valuing more than Rs 5lakhs.

22.2 Under Two Bid System the bidders will be asked to submit 'Technical' and'Commercial' bids separately in sealed cover duly superscribed and boththe offers placed in one single sealed cover, at a central place. For thispurpose, suitable labels in different covers will be provided with thebidding documents.

22.3 The technical bids will be opened first and scrutinised by TenderCommittee.

22.4 (DELETED AS PER MM/10/2003)22.5 (MM/8/2003 dated 02.04.03)

After the shortlisting of techno-commercially acceptable bidders, all suchbidders will be notified (by fastest mode like fax) of the date of opening ofpriced bids in public, allowing a period of not exceeding 5 working days,depending upon the urgency of requirement and location of bidders, so asto enable such bidders to participate in tender opening, if they so like. Forthis purpose, identified fax is to be used, and the fax must be correctlyprogrammed for Tel. number and date / time stamp. This is to be ensured byMM member. The priced bids will be opened by same Tender OpeningOfficers who are already detailed for opening of tenders and the TenderCommittee members of the case, as per provisions of para 52 of this Manual.

(MM/09/2003 dated 21.04.03)

22.6 Price bids, which remain, unopened with ONGC, are to be returned to theconcerned bidders within a period of 5 working days of receipt of PerformanceGuarantee Bond (s) from the successful bidder (s). A clause in this regardshould be inserted in the Bidding Documents.

22.7 (Provision deleted, MM/8/2003 dated 02.04.03)

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SHORT LISTING OF BIDDERS AND FINALISATIONOF BID EVALUATION CRITERIA

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no need to obtain repeat approval of the BEC (apart from changes that maybe necessary due to fresh guidelines issued by PMC).

Such cases falling under the power of EPC will be brought to it for approval

after endorsement of the concerned Director. who will consider the factors(i), (ii) & (iii) given above, after due examination and recommendation by theAsset Manager / Basin Manager / Chief of Services / Head of Institutes /Regions Similarly, if there is no change in the mode of tendering earlierapproved by EPC, such cases may be approved by Director concernedwithout referring to EPC again.

(MM/40/2009 dated 30.06.2009)

Concerned Director(s) will have full powers to approve short-listing of biddersfor price bid opening for cases falling within their powers and for EPC level

cases.

(MM/38/2009 dated 24.04.2009)

24.2 BEC (excluding the standard provisions), once approved by competentpurchase authority for a particular tender can be reviewed / modified as asequel to pre-bid conference. Wherever departure from BEC (excluding thestandard provisions) is considered necessary (as a sequel to pre-bidconference), detailed reasons in tabular form are to be given (in the proposalfor approval of competent purchase authority) indicating as to why suchdeparture is considered necessary. It will specifically be indicated as towhether ONGC would entail any extra expenditure on account of theproposed changes in BEC and if so, analysis will also need to be givenindicating the economic benefit in terms of improved efficiency orotherwise that would accrue to ONGC versus the extra expenditureinvolved due to modification in BEC. After this no change in BEC will beallowed. Where no pre-bid conference has been convened, BEC in suchcases will not be modified under any circumstances.

Powers to approve modification / relaxation / departure from approved BEC,as a sequel to pre-bid conference (and not after opening of bids), will rest with

Competent Purchase Authority. In this regard, Director concerned shall havefull powers including in EPC level cases, provided, such changes are not inconflict with the existing policy/ procedure/ PMC instructions.

24.3 Before invitation of tenders, the technical as well as commercial BidEvaluation Criteria will be formulated by the tender committee as perprovisions vide para 24.1.

24.4 The Bid Evaluation Criteria so finalised will invariably be sentalongwith bidding document to all prospective bidders.

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INVITATION OF TENDER

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INVITATION OF TENDERS

25 Coordination and bulking of demands for purpose of inviting tenders:

When dealing with indents, due attention should be paid to the combinationand bulking of demands which will result in economy in purchase.Demands for materials received simultaneously from different indentorsshould be combined as far as possible while inviting tenders. Due regardshould, however, be paid to delivery instructions given by the indentors.Demands which cannot be suitably combined with others for this or any otherreasons should be dealt with separately.

26. ENQUIRY REGISTER

26.1 Every individual section dealing with purchases will maintain an enquiry

register. A separate page for each enquiry will be allotted in that register.

26.2 In case of limited enquiries, the name of the firms to whom the enquiries willbe addressed will be entered in that register. This will be signed by theconcerned officer sending the enquiry.

27. TENDER SETS TO BE KEPT READY AND TENDERINTIMATION TO BE SENT TO PROSPECTIVE BIDDERS

All concerned sections dealing with open tenders before they send tenderinvitation to the press for advertisement will ensure that :-

a)

b)

the tender forms are complete in all respects and are ready for sale.About 20 sets are to be kept ready and all are to be seriallynumbered.

tender intimations are sent to prospective bidders as soon as theinformation is received that the tender has been advertised.

28. SUBMISSION OF TENDERS FOR PUBLICATION IN PRESS

(MM/42/2009 dated 08.07.2009)

In case of open tenders, for publication of NIT in press, a period of 7 daysshould be provided from the date it is sent for advertisement to the CorporateCommunications. Various milestones of the tender (such as starting date ofsale, closing date of sale, last date for receipt of queries, pre-bid conferencedate, tender closing/opening date) should be specified in the NIT, after takinginto account the likely date of publication of the NIT.

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29. TIME TO BE ALLOWED TO TENDERERS TO QUOTE

(MM/42/2009 dated 08.07.2009)

29.1 Save in special cases which should be seen and approved by concernedLevel-1 executive, the following period will be allowed to bidders forsubmitting their bids in Open Tenders:

Description of Activity Tenders withoutPre-bidconference

Tenders with pre bidconference

(i) Tender sale period. 21 days 21 days

(ii) Receipt of queries frombidders

. 7 days

(iii) Scrutinizing the queriesand holding pre bidconference

. 8 days

(iv) Approval of Pre-bidminutes and issue of thesame

. 8 days

(v) Submission of offers andopening of techno-commercial offers(TBO)

10 days 21 days

TOTAL 31 days 65 days

Note:

Only in LSTK contracts, an additional time of 30 days for Process Platformsand 15 days for all other LSTK projects including Well Platforms and PipeLines shall be applicable for the activities between Pre-bid conference toTBO (i.e. between activities at iv and v above).

29.2 The above period is to be reckoned from the date of publication of NIT in thenews papers.

29.3 Bidding documents should be ready for sale at tender selling centres on thedate NIT appears in news papers.

(MM/42/2009 dated 08.07.2009)

29.4 Save in special cases which should be seen and approved by concernedLevel-1 executive, the following period will be allowed to bidders forsubmitting their bids in Limited Tenders valuing above Rs 5 lakhs:-

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Note:

For any particular case, if longer bid validity period is considered necessary,than the validity period prescribed above, then the longer bid validity period

can also be specified in the tender with the approval of CPA (Directorconcerned for EPC level cases), but due justifications for such longer bidvalidity required must be given while obtaining the approval. However, afterspecifying a reasonable time for bid validity period, the same must beadhered to.

30.2 It should be specified in all tender notices under Single Bid System thatoffers with lesser than the required validity will be straightway ignored.However, under Two Bid System no offer should be rejected on accountof shorter validity. In Two Bid System, as soon as technical evaluation iscompleted, reference should be made to all bidders except those which

are technically rejected, for furnishing validity, as required at that stage.

31. NOTICE INVITING QUOTATIONS / TENDERS (NIT)(MM/8/2003 dated 02.04.03)

In regard to Notice Inviting Tenders, following points are to be kept inview:-

(i) The Notice Inviting Tenders (NIT) will clearly indicate the place at, dateand time by which tenders will be received and the place, date and the timeat which these will be opened.

(MM/47/2009 dated 04.11.2009)

(ii) The major qualifying criteria (which are very essential) must be specifiedclearly in the NIT so that prospective bidders are aware of this requirement atthe time of buying bidding documents.

(ii) The time and venue of the pre-bid conference (if any envisaged) also must beclearly specified in the NIT.

(iii) Notice Inviting Tender should include an instruction that bids sent bypost must be sent under registered cover so as to reach the place wellbefore the closing time and date.

(iv) All bids received by the notified closing date and time whether through thepost or through the tender box, will be registered under the signature of theTender Receiving Officer.

(v) Notice Inviting Tenders may be transmitted by fax also, wherever required.

(vi) Notice Inviting Quotations / Tenders will indicate the date and time of thecommencement of the sale of the tender.

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(vii) Bidding documents depending upon value notified from time to time, willbe made available for sale on specified date and time at (1)Dehra Dun(2)Calcutta (3)Mumbai (4) New Delhi (5) Chennai.

32. NUMBER OF COPIES OF OFFERS TO BE CALLED FROM BIDDERS

Copies of bids will be called as under:

(i) Where in-house evaluation Copies inis involved triplicate

(ii) Where bid evaluation is Five Copiesdone by outside agency.

33. VARIATION IN QUANTITY AFTER INVITATION OF TENDER

33.1 Provisions will be made in all tender conditions for procurement of goods thatONGC is entitled to increase or decrease the quantities amongst any / all theitems of the tender by not more than 20% (twenty percent). However, in caseof procurement of goods under Two bid system, any variations upto + 20%of the tendered quantity would be permissible only if it is decided before pricebid opening. No change in quantity would therefore be permissible in thequantities that are proposed to be purchased after price bids are opened.

33.2 In case there is an increase in the quantity beyond 20%, it would be essentialto invite fresh tenders covering the total revised quantity so as to get theadvantage of bulk discount in prices.

33.3 In case the reduction in quantities is more than 20%,confirmation from L-1 bidder would be obtained to supply at the quoted rates. On gettingconfirmation, order for the reduced quantity will be placed. If L-1 bidderdoes not agree, then tender would be re-invited.

33.4 In case of tenders like those of pipes for offshore where large quantity isinvolved, even lower percentage may be specified in the tender with

approval of Regional Director concerned.

34. SALE OF BIDDING DOCUMENTS TO FIRMS WITH WHOM BUSINESSHAS BEEN BANNED / SUSPENDED.

The bidding documents will be sold on receipt of application(s) alongwithrequisite tender fee. No bidding document will however be sold to theparty(ies) to whom no further business is to be given or dealings with whomhave been banned / suspended.

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35. TENDER FEE

(MM/8/2003 dated 02.04.03)

35.1 All open tenders will be issued after making necessary entries in the tenderregister against payment of prescribed tender fee. The tender fee will beacceptable in the form of crossed "Payee Account only" Bank Draft /Cashier's Cheque / Bankers Cheque drawn by Bank and valid for 180 daysfrom the date of issue of the same or in the form of Indian Postal Orderspayable to the ONGC.

35.2 Subject to provisions laid down vide para 36, the IPOs / Bank Drafts /Cashiers Cheques / Bankers Cheques will be deposited and accountedfor at the station where they are received and credited in the accountsthere itself. The Purchase Formation concerned from where bidding

documents have been received for sale will, however be furnished with fulldetails of parties to whom the bidding documents have been sold and thenumber of bidding documents not sold, which will be returned.

36. PURCHASE OF BIDDING DOCUMENTS BY AGENTS IN INDIA

In respect of imports, the Agents in India, duly authorised by their foreignprincipals, will be allowed to purchase bidding documents in Indian currencythrough Bank Draft drawn in favour of ONGC provided such foreign principal/ supplier remit the cost of bidding documents in foreign currencyequivalent to Indian Rupees through Bank draft / Cashiers Cheque / Bankerscheque in favour of ONGC alongwith their offer before due date. The BankDraft in Indian Currency received by tender (selling) agencies fromauthorised agents in India will be sent to the concerned FAO underintimation to Purchase Authority concerned. Demand Drafts received fromIndian Agents for the purchase of bidding documents will not be encashedimmediately. On receipt of requisite tender fee in foreign currency the BankDraft in Indian currency received from authorised agent in India will bereturned by concerned FAO under intimation to concerned PurchaseAuthority. Care should be taken by concerned FAO to ensure that demanddrafts are encashed within validi