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MODEL COMMUNITY PROCUREMENT GUIDELINES

Rashtriya Madhyamik Shiksha Abhiyan Technical Cooperation Agencywww.rmsaindia.org

RMSA TECHNICAL COOPERATION AGENCY

MODEL COMMUNITY PROCUREMENT GUIDELINES

OCTOBER, 2015

The RMSA Technical Cooperation Agency is funded by the UK Department of International Development (DFID)

Model Procurement Guidelines RMSA-TCA

Report Distribution and Revision Sheet

Project Name: RMSA Technical Cooperation Agency Report Number: RMSATCA 5.15 Report Number: Draft Model Community Procurement Guidelines

Note on Documentary Series

A series of documents has been produced by RMSA Technical Cooperation Agency for the Government of India’s programme to make good quality secondary education available, accessible and affordable to all young persons in the age group of 14-18 years.

The documentary series is arranged as follows:

RMSATCA 0 Programme Management Reports and Documents RMSATCA 1 National Achievement Survey (Reports and Documents for Thematic Area 1) RMSATCA 2 Teacher Management and Development (Reports and Documents for Thematic

Area RMSATCA 3 School Standards, Evaluation and Development (Reports and Documents for

Thematic Area 3) RMSATCA 4 Data Management and Use (Reports and Documents for Thematic Area 4) RMSATCA 5 Results Focused Planning (Reports and Documents for Thematic Area 5) RMSATCA 6 RMSATCA 7

Research (Reports and Documents for Thematic Area 6) Communication and Knowledge Management (Reports and Documents for Thematic Area 7)

Disclaimer

This document is issued for the party which commissioned it and for specific purposes connected with the above-captioned project only. It should not be relied upon by any other party or used for any other purpose.

Revision Date Originators Checker Approver 0.1 October 2015 Amit Kaushik Emma Mba Dr. Jayshree

2 October 2015

RMSA-TCA Model Procurement Guidelines

Table of Contents 1. Part A – For State and District Level.................................................................................................. 4

1.1 Universalising secondary school education....................................................................................... 4

1.2 School Management and Development Committee (SMDC) ............................................................ 4

1.3 What is the community? ................................................................................................................... 5

1.4 Community Participation in Procurement ........................................................................................ 5

1.5 Capacity building and training ........................................................................................................... 5

1.6 Amendments to these procedures .................................................................................................... 5

2. Part B – For Communities .................................................................................................................. 7

2.2 What will be purchased, who will purchase ...................................................................................... 7

2.3 Defining procurement ....................................................................................................................... 9

2.4 Types of funds .................................................................................................................................10

2.5 Functioning of the procurement committee ...................................................................................11

2.6 Works and supplies .........................................................................................................................11

2.7 Procurement methods ....................................................................................................................12

2.8 Tendering process ...........................................................................................................................17

2.9 Administration and inspection ........................................................................................................19

2.10 Record keeping and verification ......................................................................................................20

Annexure 1: Sample Procurement Plan .......................................................................................................22

Annexure 2: Sample Classroom Specification ..............................................................................................23

Annexure 3: Sample Tender Document .......................................................................................................24

Annexure 4: Sample Comparative Statement ..............................................................................................25

Annexure 5: Sample Contract Agreements ..................................................................................................26

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1. Part A – For State and District Level 1.1 Universalising secondary school education Rashtriya Madhyamik Shiksha Abhiyan (RMSA) is a centrally sponsored scheme of the Ministry of Human Resource Development, Government of India, for the development of secondary education in public schools throughout India1. It was launched in 2009. The principal objectives are to enhance quality of secondary education and increase the total enrolment rate. It aims to provide universal education for all children between 14-18 years of age. The funding from the central government is provided through state governments, which establish separate implementing agencies.

1.2 School Management and Development Committee (SMDC) According to the RMSA Framework2, there shall be a School Management and Development Committee constituted for all secondary and higher secondary schools, which will be responsible for all activities including, planning, collection of data under SEMIS, implementation, monitoring, evaluation and taking corrective/remedial actions on all the components/interventions of the scheme, infrastructural as well as academic and others, at the school level. While the specific composition of this committee may be decided by the states, the suggested composition of SMDC in the Framework is as follows:

o Principal, Chairman of the Committee o Vice Principal, Member o One teacher related to Social Science, Member o One teacher related to Science, Member o One teacher related to Mathematics, Member o One gentleman from parents, Member o One lady from parents, Member o Two members from Panchayat or Urban Local Body o One member from SC/ ST community o One member from Educationally Backward Minority Community o One member from women’s groups o One member from Education Development Committee of each village (to which the school

concerned caters) o Three experts as members, each from Science, Humanities and Art/ Craft/Culture background to

be nominated by the District Programme Coordinator through due process o One officer from Education Department to be nominated by the District Education Officer as

Member o One member from Audit and Accounts Department

The SMDC is empowered to undertake civil works for the school, including repairs and maintenance for improvement of school facilities, duly following prescribed procedures that include maintaining a transparent system of keeping accounts. Ideally, the local community should be encouraged to contribute to school-related construction works rather than having them executed through out-sourcing. RMSA also suggests that the SMDC should try to mobilise resources under various government developmental schemes, including the Rural Employment Programme, for constructing school buildings and other infrastructural requirements before engaging any other modes of executing civil works. The SMDC should also encourage use of local construction materials and low cost and

1 Ministry of Human Resource Development, Government of India. Framework for Implementation of Rashtriya Madhyamik Shiksha Abhiyan, New Delhi 2009. 2 Ibid, p 54.

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environment friendly technologies without compromising on the structural soundness and safety of the building.

Training to SMDC members in certain specific technical aspects such as development of drawings, understanding cost estimates, assessing building material quality, keeping accounts, material procurement etc., will need to be imparted in a simple and effective manner in the local language, through technical and other experts. Exercises to build capacity of committee members should be taken up periodically by the State Implementing Society either directly or through its district offices.

These guidelines can help to provide some of this basic training to members of the SMDCs in your district.

1.3 What is the community? The community may be defined as a group of people living together in the same geographical area, sharing common interests, beliefs or goals. In the case of the village for instance, the community would clearly be all those who live in the village and have a common interest or concern for the welfare of the local school. It is important to remember that communities are not always homogenous in nature, and vary from place to place and from time to time.

1.4 Community Participation in Procurement The RMSA Financial Management and Procurement Manual provides that community participation should be an important part of implementation of the programme3. Accordingly, it recommends that local communities should be involved in civil works and delivery of non-consulting services, further suggesting that “procurement procedures, specifications, and contract packaging shall be suitably adapted to reflect these considerations”.

Construction of all civil works under the programme is expected to be carried out through community participation. In places where the community is capable of undertaking such construction work, they may be allowed to do so, as long as the total value remains below Rs 30 lakh. The SDMC is required to make arrangements to carry out civil works in a transparent manner, and to maintain appropriate accounts.

1.5 Capacity building and training Periodic capacity building and training measures should be implemented for the SMDC and the procurement committee to enable effective implementation of RMSA through an enhanced understanding of its objectives, procurement processes, accounting and transparency. Such training should lead to more effective supervision and monitoring of the programme at the community level, thus enabling greater ownership and involvement.

In addition to training programmes organised for members of the SMDC, training should also be provided to members of the procurement committee on principles and procedures to be followed to ensure transparent and cost-effective procurement. Refresher training programmes may also be organised for procurement committee members periodically throughout the implementation of the programme.

1.6 Amendments to these procedures During the course of implementation of RMSA, it is possible that some amendment to these instructions may become necessary in order to ensure smooth procurement and to remove hindrances. In such a case, proposals for amendments may be submitted by the SMDC to the

3 Ministry of Human Resource Development, Government of India. Manual on Financial Management and Procurement for RMSA, New Delhi 2012, pp 75-78.

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district education office, providing appropriate justification. Thereafter, if the proposed amendments are found to be legitimate, they may be forwarded to the State Implementing Society to take a view, in consultation with the Finance Department. Any amendments arising either out of this process, or issued suo moto by the SIS, shall be incorporated in these guidelines and shared with all members of the SMDC.

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2. Part B – For Communities 2.1 Introduction What will this guide do? This guide is designed to help you understand the basics of community procurement if you are a stakeholder at school level. It will help you participate and own the procurement process at the community level. If you follow these guidelines, you should be able to take independent decisions at the local level, within the financial powers delegated to the school, on the basis of objective and transparent criteria, while maintaining relevant records of decisions taken for future reference.

Who will use these guidelines Anyone involved with purchasing goods or services for the local school: head teachers, teachers, parents, VEC members, local elected representatives, etc.

2.2 What will be purchased, who will purchase

2.2.1 Improving secondary school education Rashtriya Madhyamik Shiksha Abhiyan or RMSA is a centrally sponsored education scheme of the Ministry of Human Resource Development, Government of India, launched in 2009 for the development of secondary education in public schools throughout India4. Its principal objectives are to:

(a) enhance quality of secondary education, and, (b) increase the total enrolment rate.

RMSA is thus a plan to provide secondary school education to ALL children between 14-18 years of age. The central government pays for the programme through state governments, which establish separate implementing agencies for the purpose.

As a part of the scheme, several things may need to be purchased for the school from time to time. This guide will help you understand what those things might be, and how and when they would need to be purchased.

4 Ministry of Human Resource Development, Government of India. Framework for Implementation of Rashtriya Madhyamik Shiksha Abhiyan, New Delhi 2009.

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2.2.2 Who procures for schools? At the school level, purchases can be made either by teachers, the Principal, or members of the School Management and Development Committee (SMDC). Many items may also be purchased on behalf of the school at the district or State level, in order to achieve economies of scale.

Usually a procurement committee would be established under each SMDC. It may be established either by resolution of the SMDC duly approved by the District Education Office, or by Executive Order of the State government. Its functions include overseeing all procurements for the school, ensuring that required processes are followed, and rendering accounts of all expenditure to the SMDC and other school stakeholders.

2.2.3 Who would be the procurement committee’s members? The committee should have 3-5 members, who may be elected for a period of one year at a time from amongst members of the SMDC, including the Principal of the school, who as Chairman of the SMDC will also be the ex-officio Chairman of the procurement committee. Members of the procurement committee may elect a Vice-Chairperson and Member-Secretary from amongst themselves.

2.2.4 What would be purchased at community level? What are the kinds of items that might need to be purchased at the school (or community) level? Usually these would include items like books and periodicals, payment of water, electricity and telephone charges, stationery items, small sanitary or electrical fittings, teaching aids or instruments, lab equipment, sports kit, etc. Additionally, there may also be a need for some repair and maintenance work, as well as construction or modification of buildings, toilets, classrooms, and the like.

While major items will usually be purchased at the district or State level, there are some items that are purchased locally. These include5:

o Furniture o School equipment and other items for

the improvement of schools o Computers and IT related equipment

and accessories o Maintenance of school buildings from

the maintenance grant. o Maintenance of equipment and vehicles o Repair of school buildings from the

repair grant. o Printing work and stationery o Office contingencies o Teaching and Learning Equipment (TLE)

for existing and upgraded secondary schools as per local context and need determined by the teachers / school committee

o Provision for teacher and class rooms o Additional teaching learning materials

and other items required under Quality Improvement interventions

o Cash box, bricks, cement, iron, chips, local labour o Lab equipment and books

5 Ministry of Human Resource Development (2), op cit, p 62.

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o Non-consultancy services such as cleaning services, revenue collection, security services, generator facility, vehicle hiring and repair services

o Any other required goods and non-technical services

2.3 Defining procurement

2.3.1 What do we mean by procurement? Procurement is the complete process by which required goods or services are purchased by an institution or individual. This includes the preparation of justification, estimates of cost, approval to purchase, obtaining quotations, assessing received offers, placing the order, and receiving the material or services.

2.3.2 Some principles that must govern procurement We must remember that money spent under the RMSA project represents public money – in other words, our money. There is therefore a responsibility upon each person involved with using these funds to ensure that the money is spent wisely and judiciously, and achieves the best value.

In general, anyone using public money for purchases should exercise the same vigilance over these funds as a person of ordinary prudence would exercise in matters of his own personal expenditure. Some principles of public procurement that apply to purchases at school level include:

o Transparency – All purchases should be made in an open and transparent manner, and all interested parties should be encouraged to be familiar with and understand the actual procedures and processes by which contracts are awarded and managed. This includes ensuring that widespread publicity is given to all purchase requirements, that they are made in accordance with standard formats and rules, and that all bids received are opened publicly, disclosing the relevant information to anyone who may be interested.

o Accountability – At all times, persons responsible for taking decisions about procurement must be clearly identifiable and accountable. A good procurement system should have clear lines of responsibility in decision making and members responsible for procurement should be fully accountable for their decisions.

o Equality – Article 14 of our Constitution provides for equality of opportunity to all citizens; accordingly, all procurements funded by government resources are required to provide equal opportunity to all participants and avoid any form of discrimination between potential bidders. Potential suppliers should be treated equally and with utmost fairness throughout the contract award process.

o Competition – Procurement should be carried out by open competition unless there are convincing reasons to the contrary, in order to attract the best suppliers and contractors.

o Integrity – The integrity of the school or committee members responsible for procurement must be beyond doubt at all times. Under no circumstances should they be involved with corruption or collusion with suppliers or others.

o Value for money – We should always aim to acquire the right items at the right time, and at the right price to support value for money. This means following principles of economy and efficiency. Economy means buying only what is needed, and in the quantities required. A proper assessment of the amount and quality of material to be procured must be made, with the help of a technical person when necessary. Efficiency means that the goods and services need to be procured in a timely manner without delay, which is important for efficient and timely completion of work. All material purchased with government funding must be stored in safe custody so that there is no pilferage, and a stock register maintained to account for all items.

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2.4 Types of funds

2.4.1 Types of funds under RMSA RMSA is a partnership between the Central and State governments. During the 12th Five Year Plan period (2012-17), the Centre provides 75% of the required funding for the programme, while States meet the remaining 25%. In the case of special States such as those in the northeast, the Centre provides 90% of the needed funds, with the States only paying for the remaining 10%.

Funds provided under RMSA are either non-recurring or recurring in nature. Non-recurring funds are for one-time expenses of a capital nature, such as construction of a school building, Principal’s office, library, science lab, toilet blocks, additional classrooms, etc. Recurring funds are provided for annual expenditures such as annual grants, repairs and maintenance, purchase of books, etc.

2.4.2 Funds available at school level There are three types of funds that could be available to the SMDC for the school and these are:

Funds for civil works: In the case of civil works where the community is able to contribute to and carry out construction, the SMDC may incur expenditure up to Rs 30 lakh.

Funds for school grants: RMSA provides annual school grants for lab equipment, consumables, books and periodicals, art supplies, etc. up to an amount of Rs 50,000 per annum.

Additional funds: In addition to funds received from RMSA, schools may also receive funds from the State Government, MP or MLA Local Area Development funds, student’s contributions to school development fund, and other public funds from other sources from time to time.

ecurring Funds

Additional works

Funds for school grants Funds for civil works

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2.5 Functioning of the procurement committee

2.5.1 How does the procurement committee function?

As mentioned in para 2.2.2 above, a procurement committee would be established under each SMDC, either by resolution of the SMDC duly approved by the District Education Office, or by Executive Order of the State government. The functions of this 3-5 member body would include overseeing all procurements for the school, ensuring that required processes are followed, and rendering accounts of all expenditure to the SMDC and other school stakeholders.

Once the procurement committee has been established, the Chairperson shall preside over its proceedings. In his/her absence, the meeting shall be presided over by the Vice-Chairperson.

To ensure that decisions taken are transparent and acceptable to all, a minimum number of attendees must be present to complete the quorum; this number shall be determined based on the strength of the committee at the time of its constitution.

All matters discussed in meetings of the procurement committee must be recorded in the form of Minutes of the Meeting. These Minutes shall be recorded by the Member Secretary in a Minute Book, and circulated for information of the members after the meeting. A copy of the Minutes should also be pasted on the school notice board for information of various stakeholders.

The procurement committee may from time to time, co-opt outside experts or members to provide specialist advice if required.

Members of the procurement committee must be respectable with impeccable reputations, some knowledge of public procurement, and be inclined towards social service.

2.5.2 Preparation of an Annual Procurement Plan One of the important tasks of the procurement committee is preparation of an annual procurement plan. This is a document specifying the details of procurements of goods, assets or services required over the next one year. It should contain the mode of purchase, responsible officials, period, quantity, quality specifications, total funds required and source of funds.

• The procurement plan/schedule shall be prepared contract wise. • The method of procurement for a contract shall be based on the value of the contract as indicated

in Table 1 below. • It shall be ensured that the procurement is based on actual requirements. • Miscellaneous items not covered by the plan may be purchased according to actual requirement

at different points of time during the financial year, provided the value of such items is small and expenditure is met from within the sanctioned budget.

• Procurement plan can be revised during the year based on the actual situation.

A sample procurement plan is provided in Annexure 1.

2.6 Works and supplies

2.6.1 Civil Works The SMDC is empowered to carry out civil works for the school, including repairs and maintenance for improvement of school facilities. To help them to do so, certain procedures have been outlined, including maintaining a transparent system of accounts.

Ideally, the local community should be encouraged to contribute to school-related construction works instead of engaging an outside agency. The RMSA guidelines also suggest that the community (through the SMDC) should try to mobilise resources under various government developmental schemes, including the Rural Employment Programme, for constructing school buildings and other

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infrastructural requirements before considering any other modes of executing civil works. The SMDC should also encourage use of local construction materials and low cost and environment friendly technologies without compromising on the structural soundness and safety of the building.

The SMDC may therefore carry out these civil works either directly, or by organising contribution of labour from the community members, or by mobilising additional resources, manpower, etc. from other Central schemes like MGNREGA.

2.6.2 School Grant An amount of Rs 50,000 is released every year to each school under RMSA. This money is to be used by the SMDC to provide basic equipment and amenities to the school, as outlined in para 2.2.4. The spending of this money too, is to be supervised by the procurement committee.

The school grant should be utilised only for buying small items or undertaking minor repairs. There is usually no case for consultancy service contracts to be entered into at the school level, except for perhaps some minor cleaning services, which may be dealt with under the same rules as for purchase of goods. The State RMSA Society will normally issue appropriate instructions for dealing with more complicated consultancy service contracts, such as for instance, contracts for architectural design, and these should be followed as applicable. For anything that goes beyond simple purchase contracts, assistance of the district education office should be sought.

2.7 Procurement methods

2.7.1 Commonly used procurement methods

Purchases can be made directly or through invitation of quotations or tenders. A quotation is a written offer provided by a seller to supply a given quantity of items at a particular rate, usually provided on oral or written request. Tendering is a more formal process by which suppliers are invited to submit sealed, written bids for a specific work or for supply of a given quantity of items, and to quote their rate for doing so.

Given that RMSA is funded by public money, it is important that the best value for money is obtained, and hence it is best to use a system that can help achieve that goal. Several different types of procurement systems can be used to purchase the items required at school level.

The Ministry of Human Resource Development (MHRD) has set out limits for different types of purchases. The table below shows the different methods that may be used, and the financial limit for each. All of these methods can be used for both civil works and/or purchase of various items, depending on the context, except for limited tenders, which can only be used for civil works. A brief description of each method follows.

Table 1 – Different methods of procurement and related financial limits

S.No. Procurement Type Financial Limit 1 No Tender or Direct Purchase Up to Rs 15,000/- 2 Three member committee Above Rs 15,000/- but below Rs 1.00 lakh

3 Limited Tender Above Rs 1 lakh and upto Rs 10.00 lakh

4 Open tender Above Rs 10.00 Lakh and below Rs 50.00 lakh6

Source: Ministry of Human Resource Development, Government of India. Manual on Financial Management and Procurement for RMSA, New Delhi 2012.

6 In the case of community procurement, this limit will apply to the extent of Rs 30 lakh, the limit of powers currently delegated to the school.

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a) Direct Purchase (for small value items) up to Rs 15,000 Purchase of articles or group of articles estimated to cost less than Rs 15,000 on each occasion may be made without inviting tenders. Three quotations may be sought from different vendors and purchases may be made from the least expensive vendor. Care should be taken not to split a higher value purchase into smaller ones in order to keep the purchase within this limit. Before actual purchase, the price should be reviewed to ensure that the rate quoted is reasonable.

Quality and quantity should be certified and entered in the stock book before processing invoice for payment.

Direct purchase may also include the following types of purchases:

(i) Goods/works that are of very small value (less than Rs 15,000). (ii) Articles that are specifically certified to be of proprietary nature or cases where only a particular

firm is the manufacturer of the articles demanded. (iii) Extension of existing contracts for goods awarded following such procedures as may be

prescribed, provided such extension can be justified on financial grounds. (iv) Need to standardise equipment or spare parts so that they are compatible with existing

equipment. (v) The required item is proprietary and obtainable only from one source. (vi) Unforeseen conditions requiring early delivery to avoid costly delays. (vii) Exceptional or emergency cases, such as natural disasters, security requirements, etc.

b) Three Member Committee Purchase of goods worth less than Rs 1,00,00 but more than Rs 15,000 on each occasion may be made on the recommendations of a duly constituted school purchase committee consisting of three members. This committee may be constituted from among members of the school procurement committee.

The committee will survey the market to ascertain quality and specifications, as well as reasonableness of rates, and identify appropriate suppliers. It will then obtain quotations (at least three) from these suppliers on their letter head or stamped paper, compare them, and select the lowest, on whom the order shall be placed.

Full reasons shall be recorded in writing justifying selection of the identified supplier, along with details of the quotations and rates received. The recommendations of the Three Member Committee shall be approved by the Chairman of the procurement committee.

c) Limited Tender For works costing less than Rs 10,00,000 but more than Rs 1,00,000, limited tenders may be invited from approved contractors. This process is used for procuring small quantities of readily available off-the-shelf goods, or standard specification commodities of small value, or simple civil works of small value when more competitive methods are not justified for the sake of cost and efficiency.

Once again, it is not permitted to split larger value purchases into smaller lots in order to remain within these limits and avoid having to invite open tenders.

Goods including books, teaching learning materials, school equipment, hiring of vehicles and operation and maintenance of equipment may be procured under contracts awarded under the limited tender method.

This method requires the comparison of price quotations obtained from more than three firms to ensure competitive prices. As far as possible, limited tender enquiries will be issued to firms that are

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on the list of approved contractors/suppliers maintained by school or DEO7. If possible, internet-based publicity should be given when inviting limited tenders.

Requests for quotations under limited tender process shall be made in writing to selected contractors, indicating the description, specification, and quantity of goods, as well as desired delivery time and place. Offers received in response to this request should be carefully evaluated by a small sub-committee of the procurement committee to identify the lowest reasonable and workable rate, which should then be accepted by the Chairman of the procurement committee. Terms of the accepted offer shall be incorporated in a purchase order.

No less than 15 days should be given to suppliers from the date of issue of request for quotation to the date of submission of tenders.

Rate contracts of the Directorate General of Supplies and Disposals (DGS & D) may also be used as a substitute for limited tenders, if such a rate contract is already in operation. The DGS&D is a central purchase organisation of the Indian government, under the Ministry of Commerce & Industry, whose role is to finalise rate contracts to be used by various government departments to procure items of general use. DGS&D contract rates allow the state, central and government-owned entities to buy required goods at the predetermined and specified prices. The contract rates for such purchases by government departments and public sector undertakings (PSUs) are fixed once every year.

Approved DGS & D Items such as computers, printers, photocopier machines, drinking water coolers, ceiling fans, furniture, etc., are some items that may be purchased directly from approved suppliers on DGS & D rates. Details of items available, suppliers, and prices may be obtained from the DGS &D website, www.dgsnd.gov.in.

Steps to be followed for limited tender procurement include the following:

(i) Identifying items for purchase and including them in the procurement plan (ii) Working out specifications for the items identified (iii) Estimating total numbers and costs based on approximate unit costs (iv) Identifying likely firms from whom quotations can be invited (minimum three, but 8-10 firms

would ensure more competitive rates) (v) Obtaining approvals of competent authority for items to be purchased along with specifications,

estimated costs and agencies from whom tenders should be invited (vi) Issuing request for quotation to the selected suppliers based on approvals, followed by public

opening of tenders on the date and time specified (vii) Processing quotations received and obtaining orders of competent authority for placing orders

for supply (viii) Purchase Orders shall specify the description of goods/item ordered, quantity to be supplied, unit

rate and total cost, the period in which the delivery is to be completed, place of delivery, applicable taxes and duties and payment terms

(ix) Inspection of items at the point of delivery by a suitably representative group from the procurement committee

(x) Ensuring timely supply of items (xi) Receiving and accounting for the supply received, and paying the supplier after delivery of goods

in satisfactory condition

d) Open Tender Open tenders, also known as National Competitive Bidding (NCB), is the competitive bidding procedure normally used for public procurement in India. This procedure provides competition and helps to obtain reasonable prices. The process of evaluation of tenders and award of contracts under this system is transparently known to all bidders and is applied uniformly.

7 See Section 2.7.2 for a description of approved suppliers.

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http://www.dgsnd.gov.in/


In other words, competitive bidding refers to a process by which several parties are given an opportunity to bid for provision of goods or services, in order to obtain the best possible services/goods at competitive rates. The offer that is lowest in price and technically most suitable is then considered for acceptance.

In the case of procurement at the school level through open tender, these powers shall be exercised to the extent of Rs 30 lakh, which is the limit currently delegated to the school.

The Manual on Financial Management and Procurement for RMSA issued by the Ministry of HRD stipulates that the following requirements shall apply to all Open Tender (NCB) procurement under RMSA:

• Standard Bidding Documents (placed on RMSA website) for NCB of RMSA shall be adopted/adapted for bidding.

• Invitations to bid shall be advertised in newspapers and at least one widely circulated national daily newspaper, at least 30 days prior to the deadline for the submission of bids.

• No special preference will be accorded to any bidder either for price or for other terms and conditions when competing with foreign bidders, state-owned enterprises, small-scale enterprises or enterprises from any given state.

• Under normal circumstances, there should be no need to negotiate with any of the bidders after opening of tenders. If at all such negotiation is considered necessary, it should be carried out only with the lowest tenderer.

• Extension of bid validity shall not be allowed without the prior concurrence of the state Secretary, Secondary Education, for the first request for extension if it is longer than four weeks, and for all subsequent requests for extension irrespective of the period.

• Re-invitation of shall not be carried out without the prior concurrence of the state Secretary, Secondary Education.

• Rate contracts entered into by DGS&D will not be acceptable as a substitute for NCB procedures. Such contracts will be acceptable however for any procurement under limited tender procedures8.

• For tenders above Rs 10 lakh, suppliers should be asked to provide their bids in two separate envelopes, one containing their technical bid, and the other it’s pricing. Both envelopes should be clearly marked on the outside so that the wrong one is not opened inadvertently. The tender committee should open the technical bids only first and evaluate those; thereafter the financial bid of only the most technically suited offer will be opened and evaluated for reasonableness of rates.

The process for calling open tenders includes the following steps:

a) Issue of a bid notice containing - • Name & Address of Purchasing Authority • List of items to be purchased • Place, date and time of issue and submission of bid document • Place, date and time of opening of bid document

b) The bid document must contain - • Name and address of Purchasing Authority • List of items to be purchased • Specification of each item • Place, date and time of issue and submission of bid document • Place, date and time of opening of bid document • Time and place of delivery of goods • Terms and conditions determining capacity to supply

8 See Section 2.7.1 (c) above.

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• Warranty and maintenance requirements, if any • Performance security clause, if required • Format for quoting cost

c) Receiving the bid documents submitted d) Opening received bids on the appointed day and time e) Calculating and tabulating the relative cost of each offer, including consideration of all statutory

levies, taxes, etc f) Consideration of all technically suitable bids by the procurement committee and acceptance of the

lowest technically suitable bid g) Issue of acceptance letter to supplier

2.7.2 Approved contractors Approved contractors are contractors who have been pre-screened and whose details have been obtained, verified and listed in the school or district records. Such contractors are approved if they meet certain prescribed pre-qualification criteria, or criteria laid down in the present bid document.

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2.7.3 Splitting of transactions Financial limits for various types of purchases as set out in Table 1 above, and as amended by the appropriate government from time to time, shall be strictly complied with. Splitting of transactions to make them smaller and thus within a particular financial limit is strictly prohibited. The procurement committee and SMDC shall have the responsibility of ensuring that transactions of a similar nature are not made separately to avoid going through the appropriate bidding process.

2.8 Tendering process

2.8.1 Defining specifications

In order to ensure that the best quality is received at the most competitive rates, it is important to define the specifications of the item to be procured, or the work to be carried out, carefully and precisely. Specifications therefore refer to the details of items to be purchased, or work to be done, and is a comprehensive description of aspects like size, quality, and materials used, including if necessary part number, drawing and design. Precisely articulated specifications provide a clear idea of what is required, and allow bidders to share a common understanding of articles required.

For instance, if procuring furniture for the school, the tender should specify the type of wood to be used, the precise dimensions of the item, the colour (or polish), the thickness of wood, etc, so that any bidder can submit a suitable response. In the case of buildings, it is necessary to specify the size, roofing, wall thickness, lighting, electrical fittings, doors, windows, etc. A sample specification for construction of a classroom is attached as Annexure 2.

Wherever designs or specifications have already been prescribed by the SIS, these should inevitably be followed completely. Specifications must always be generic and should not include brand names, model numbers, catalogue numbers or trademarks except where these are essential for compatibility with existing machinery, equipment or instruments.

No significant deviation from specifications (sometimes called material modifications) should be allowed either after opening of tenders, or during execution, without appropriate approval of the competent authority.

2.8.2 Tender documents

In order to ensure that participating bidders submit their offers in a uniform manner and to ensure that each bidder does so under the same conditions, the procurement committee shall create suitable tender documents when inviting bids; these documents should contain sufficient details to enable prospective bidders to respond appropriately. The documents shall provide information, among other things, on the quantity and quality of items to be provided, the format in which bids should be submitted, method of evaluation of bids, manner in which the lowest evaluated bid will be determined for award of contract, and the place, date and time of opening of bids. A sample tender document is provided at Annexure 3.

Type of wood

Dimensions

Colour (Polish)

Thickness of wood

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2.8.3 Bidding and quotation rules

All bids and quotations submitted to the school must comply with some common basic conditions. These include:

o Bids must be submitted in plain sealed envelopes bearing only such endorsements or labels as may be specified in the invitation notice.

o The bid envelopes shall not contain any name, mark or identity that might identify the bidder. o All bids and quotations must be delivered by post, courier, or by hand, and deposited in a

specified tender box before expiry of the time limit specified in the notice. o The procurement committee will have the liberty, for reasons to be recorded in writing, to

accept, reject or cancel any bid or offer.

2.8.4 Tender box

When inviting suppliers to submit bids, it should be ensured that a suitable box is placed at a prominent, but secure, location within the school, in which sealed offers from the tenderers may be deposited. This box must be kept locked until the time specified in the tender documents, with the key in the custody of a responsible member of the procurement committee. The tender box should be so designed as to only permit sealed covers to be deposited in it, with no opportunity to remove any paper once deposited.

2.8.5 Opening of Bids Bids received shall be opened at the place, date and time specified in the tender documents. Representatives of bidders, or the bidders themselves, may be allowed to attend the opening. Each sealed envelope must be inspected to ensure that it is still sealed, marked as x/y, where x is the number of the tender and y the total number of tenders received. (Thus if 5 tenders have been received, each envelope will be marked 1/5, 2/5, 3/5, 4/5, and 5/5.)

The marking as above and the envelope should be initialled by the person opening it before actually being opened. The name of the bidder, individual items and rate quoted, total value of the bid, and special conditions, if any, must be encircled by the person opening the bid and initialled before being read out loud. These details must also be entered in a bid opening register, which must be signed by the person opening the tenders, and by at least two other persons present.

2.8.6 Evaluation of offers received

Once the bids have been opened, a statement of comparative rates and other important conditions should be prepared by the Member Secretary for consideration of the procurement committee. It must be ensured that all tenders received are tabulated in the above comparative statement and that the details of any offer received have not been inadvertently left out.

Along with the comparative statement, a short note should be prepared that contains related information such as previously received rates for similar works or materials, reasonableness of rates presently quoted, basic information about the tenderers and their performance in earlier contract (if any), special conditions quoted by the supplier, and any other relevant information that may have a bearing on the contract.

With the help of these documents, the procurement committee should meet to evaluate the lowest technically acceptable offer, and agree upon the final selected bidder.

It should be noted that on certain occasions, the committee may find itself unable to accept any of the offers received, either when they do not conform to tendered specifications, or fail to meet required eligibility conditions, or are otherwise not in order. In such circumstances, the committee may reject all offers and recommend re-tendering of the contract.

18 October 2015


If in response to a call for tenders, only one offer is received, it should not be rejected out of hand, but must be evaluated for reasonableness of rates and to examine whether it meets the required criteria before any decision is finally taken.

2.8.7 Notification of award The successful bidder shall be informed by the Member Secretary of the procurement committee of the award of contract in writing after all necessary approvals and formalities have been completed. Usually it is a good practice to also inform unsuccessful bidders of the final outcome.

2.8.8 Contract agreement The bidding process is completed when a formal contract for supply of goods or services or execution of works has been signed between the school and the successful bidder. This contract should be drawn up using standard conditions used by the State or district administration for similar works, and should usually include information such as the scope of work, the agency to which it has been awarded, the completion date agreed, stages of work or items to be delivered, the place of delivery or work, total value and amounts payable to the bidder and when, etc. Contracts are legally binding documents on both parties under the Indian Contract Act, 1872, and care must therefore be taken to ensure that the final document adequately protects the interests of the school as well as the supplier.

2.9 Administration and inspection

2.9.1 Storekeeper The SDMC may if required, designate one member of the committee as the “Storekeeper” who shall be responsible for managing school stores. This person shall be charged with receiving and issuing all stores procured by either cash, credit, bidding or donation. S/he shall take charge of each item on delivery by the supplier, and enter relevant details in the stores ledger, as well as make note of such details when issuing the material for use. Before payment is made for any goods received, the storekeeper shall be the person who certifies that goods received are in accordance with contract specifications.

2.9.2 Inspection of goods and works and verification of works All goods received from suppliers must be inspected before acceptance to ensure that they conform to the specifications of the concerned contract. This inspection will usually be carried out by the Storekeeper, but may also be undertaken by nominated members of the procurement committee or SMDC. Goods that do not conform to agreed specifications should not be accepted, and the supplier may be asked to replace them suitably.

In the case of civil works, progress of works should be recorded periodically in a suitable Measurement Book, and payment to the contractor released in stages only against recorded progress. The Measurement Book is a most important record and must be maintained carefully, as it captures details of quantities, labour, civil work, etc., and forms the basis of all payments made to the executing agency.

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2.10 Record keeping and verification

2.10.1 Keeping records of relevant information In addition to the Measurement Book referred above, the school should maintain detailed records of all matters related to procurement. Such records should be preserved carefully and be available for inspection by any member of the community who desires to see them. This includes minutes of procurement committee meetings, the tender register, original copies of offers received, comparative statements, award notifications, contract copies, stock register, contractor/supplier performance reports (if any), details of payments released, etc.

Each stage of the procurement process must be recorded and properly documented. This is as much to ensure adherence to key procurement rules, as it is to protect those involved with the process. Careful documentation of the process establishes the reasons behind decisions taken, and enables an understanding of the context and reasoning if required subsequently.

2.10.2 Internal controls

In order to ensure consistency and integrity of the procurement process, it is useful to ensure that certain internal controls are followed. These include the following:

o Any decision taken on procurement should be taken in a meeting of the procurement committee only. In an emergency, a decision may be taken by the Chairman of the committee, but this must be approved post facto by the committee as early as possible in its next meeting.

o Dates for submission and opening of tenders, once announced, should not usually be changed unless there are pressing reasons.

o The Receipt Book for sale of tender forms should be serially numbered. o Cash/cheques received for any reason (such as sale of tender forms) should be deposited in the

school bank account at the earliest, preferably on the day of receipt itself, and not later than the next working day.

o Periodic physical verification of material kept in the stores should be conducted, and items reconciled with store records.

o Supplier/contractor bills should be passed strictly in the order they are received; details of each bill received should be entered into the Bills Register, and paid consecutively to avoid any scope for manipulation or corruption.

2.10.3 Post Procurement Review The State Implementation Society or the district education office shall undertake a post procurement review of contracts awarded by the school for goods and works on a sample basis so that all schools are covered. For this purpose, all documents relating to award of contracts should be made available to the review team by the school. The post procurement review will also cover complaints, if any, received during the procurement process.

2.10.4 Audit Given that RMSA is funded by public funds, it is subject to audit of its accounts from time to time, under the overall supervision of the Comptroller and Auditor General (C&AG) of India. The essence of audit is to obtain independent, professional audit assurance that programme funds have been used for the purposes intended, that annual financial statements are free from material misstatement, and that the terms of the grant were complied with in all material respects.

As prescribed by the RMSA Financial Management and Procurement Manual, the periodic audit of RMSA by a Chartered Accountant shall cover the accounts of the State Implementing Society, all district project offices and all SMDCs each year. The school must make sure that all accounts and related documents are kept ready and made available to the auditors when they visit for this purpose.

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2.10.5 Transparency and Social Audit Social audit is a participatory process that enables direct accountability to citizens. It is a mechanism through which information is disseminated to citizens and they are provided an opportunity to evaluate works implemented and judge their procurement, quality, effectiveness and conformity to accepted norms.

In order to implement social audit and achieve transparency, the following steps are recommended:

o Procurement plans prepared by the procurement committee should be shared with the larger SMDC and put up on the school notice board for the information of all. Similarly minutes of meetings of the procurement committee should be displayed on the school notice board after each meeting.

o Information with respect to intended procurement through quotations and tendering should be displayed by the procurement committee on the notice boards at the school, and in other public places such as Community Halls, Panchayat Bhavan, etc.

o Any member of the community should be allowed to see documents related to school procurement on request. The Member Secretary of the procurement committee should facilitate the inspection of concerned procurement documents, and answer any queries that may arise. Copies of such documents may also be provided to community members on request, and on payment of such fees as may be deemed appropriate.

o At each meeting of the SMDC, minutes of the procurement committee meetings should be circulated and discussed for the information of all.

October 2015 21

Draft Model Procurement Guidelines RMSA-TCA

Annexure 1: Sample Procurement Plan

1 2 3 4 5 6 7 8 9 10 11 12 13 14

Activity Unit Unit Cost

Grand Total

Procurement Method Review

Expected Invitation (Date)

Expected Contract Award

Expected procurement Completion date

No Objection to Contract Award

Name of contractor / Date of award of contract

Amount of Contract

Date of completion of Contract

Expenditure incurred to Date

Goods & Non-technical services 1. 2. 3. Works 1. 2. Services 1 2

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Annexure 2: Sample Classroom Specification S.No Features Specifications

1 Size Length 28 ft, Breadth 25 ft, Height 11 ft Side Wall

2 Roof Structure M/S 3 Inch Square Pipe/2” M/S Square Pipe sloping towards both sides – hut model

3 Roof CGI colour coated sheet 0.5 mm 4 Wall Thickness 9 inch Brick Wall 5 Varandah Length 28 ft, Width 7 ft, Lowest roof height 8 ft 6 Flooring Tandoor Gray colour stone piece of size 2 ft x 2ft ** 7 Wiring Concealed Wiring with one switch board 8 Lighting Qty 10 x 40 watt tube light sets fitted on to the roof i.e. false ceiling. 9 Ceiling Fans 08 Nos

10 Doors Two x iron doors of size 6 ½ ft x 3 ft single door with six hinges. 11 Windows Four windows of size 4 ft x 3 ft with two doors of metal frame and glass with

iron grill 12 Walls Upto 7 ft brick wall of 9 inch width, after that upto a height of 4 ft iron grills

with pillars at a gap of 7 ft each i.e. 4 iron grills of length 7 ft, height 4 ft x 4 numbers for each room. Square rods to be used. Each square of size 4 inch x 4 inch.

13 False Ceiling Arm strength ceiling of 2 ft x 2 ft. 14 Wall Painting Tractor Emulsion Interior/Exterior with colour of user’s choice. 15 Cement Branded cement 16 Cement Sand mixture : 40 : 60

October 2015 23


Annexure 3: Sample Tender Document From : To Name & Address of the School M/s Name & Address of Supplier (Address) (Address) Dear Supplier, Subject: Supply of Goods. We request you to quote your lowest rate for the supply of materials, equipment as described below, on or before [date]

S.no Description of Goods Numbers Period of supply

1. All duties, taxes and other levies payable on the raw materials and components shall be included

in the total price. 2. The rate should be valid for 60 days. 3. Evaluation of Quotations - The Purchaser will evaluate and compare the quotations determined to

be substantially responsive i.e. which (a) are properly signed ; and (b) conform to the terms and conditions, and specifications.

4. The Quotations would be evaluated for all the item together/would be evaluated separately for each item. [Select one of the options].

5. Each bidder shall submit only one quotation. 6. The material should be supplied at the address noted above. 7. Period of warranty should be mentioned. Normal commercial warranty/ guarantee shall be

applicable to the supplied goods. 8. Terms of Payment should be mentioned.

Signature with Seal

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RMSA-TCA Draft Model Procurement Guidelines

Annexure 4: Sample Comparative Statement (Cost & Other requirement comparisons as per Bid document.)

Bidders name Bidder 1 Bidder 2 Bidder 3 Bidder 4 Bidder 5 Model & Manufacturers name Specification Required

Bidder’s Specification Bidder’s Specification Bidder’s Specification Bidder’s Specification Bidder’s Specification

Sl.no Items

No. of units required Unit Rate Total (Rs) Unit Rate

Total (Rs) Unit Rate Total (Rs) Unit Rate

Total (Rs) Unit Rate Total (Rs)

1 2

Table Chair...

Vat

Total inclusive of Vat

Delivery Period

Manufacturer Authorization letter

Registration under VAT

Warranty Responsiveness Ranking

October 2015 25


Annexure 5: Sample Contract Agreements (a) Format for Order & Contract for Supply of Goods

Order and Contract for supply of Goods

From : To Name & Address of the School M/s Name & Address of Supplier (Address) (Address) Dear Supplier, Subject : Supply of Goods Ref : Your Proforma Invoice No………………dated………………. We are pleased to place an order with you for the supply of / supply and installation of the materials/equipment specified below, in conformity with your above referred Profoma Invoice and the terms and conditions listed below:

1. Items of Goods

Item of material/equipment Quantity Unit Rate (Rs.) Specification of

Quality

2. The amount of the order is Rs……………..(Amount in words). 3. The materials/equipment shall be supplied within…………..days of acceptance of this order. 4. The materials/equipment shall be delivered at…………………(specify the place). 5. The amounts due shall be paid in the following manner:

Instalment Number Percentage of Amount Conditions 1. Receipt of

material/equipment in satisfactory condition (receipt and installation of equipment satisfactorily).

2. At the end of warranty period or whichever date of performance security.

6. The supplier shall agree to undertake at their expense, all repairs resulting from faulty equipment

including replacement of the equipment or its parts, should there be cause. The total period of warranty shall not be less than………….months from the date of satisfactory supply/supply and

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RMSA-TCA Draft Model Procurement Guidelines

installation of the equipment. The supplier shall guarantee after sale service of promptly providing all the maintenance services required and regular supply of spare parts.

7. The supplier shall pay a penalty of Rs……………… on the price of the goods ordered in case of any delay in the supply of materials/equipment.

8. All payment under this contract will be made by bank cheque. Thanking you, Yours faithfully, For the School SMDC…………………… For the Supplier………….. Signature : Signature: Name: Name: Designation: Designation: Date: Date:

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(b) Format for Order & Contract for Works

ORDER AND CONTRACT FOR WORKS From : To Name & Address of the School M/s Name & Address of Supplier (Address) (Address) Dear Contractor,

Subject: Contract for……………………………….(specify name of the work) Ref: Your Technical and Financial proposal dated…………………….. We are pleased to hire you to provide the subject contract service in accordance with the terms and conditions listed below: 1. Description of work – This contract is for ……………………(specify the work like Construction of shed,

Construction of Hand Pump Tank, Shed etc.) forming part of the………………………sub project. The detailed description, design, estimate, quotations and engineering drawings are attached, which will form part of this agreement.

2. The amount of this contract is fixed at Rs………………(Amount in figures and in words) and is not subject to revision. The amount includes all the costs related to completion of the work as above including overhead and any taxes.

3. This agreement will become effective upon confirmation of this letter by you and will terminate on………………………(specify the date of termination of the contract) or such other date as mutually agreed.

4. The SMDC sub-committee headed by Shri/Sushri/Shrimati.…………………..will supervise satisfactory performance of activities under this contract.

5. The contractor shall be responsible for damages and accidents of any kind caused to a third party by the personnel and equipment of the contractor during the execution of the work.

6. The amounts due will be paid in the following manner:

Payment Stages Condition of Payment Terms of Payment Stage-I Countersigning of this letter and completion

of preliminary mobilisation % of Contract Value

Stage-II Completion of foundation % of Contract Value Stage-III Completion of lintel % of Contract Value Stage-IV Completion of roofing % of Contract Value Stage-V Completion of woodwork and electrical

fittings % of Contract Value

Stage-VI Final completion and handover % of Contract Value 7. The SMDC will make arrangements for measurement and certification of the works at each stage

and payments will be subject to satisfactory completion of works in each stage. 8. The contractor shall pay a penalty of …………% of the amount of this contract in case of any delay

in completion. 9. All payments under this contract will be made by Bank Cheque.

For the School SMDC…………………… For the Supplier………….. Signature: Signature: Name: Name: Designation: Designation: Date: Date:

28 October 2015

ContactRoom No. 308 - 313, Central Institute of Educational Technology (CIET), NCERT, Sri Aurobindo Marg, New Delhi -110016 INDIA

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