Para 1.4 — CONSULT_MANUAL

a) Goods. b) Services i) Consultancy Services and ii) Non-consultancy services (NC services) c) Works 2. Distinctive Features: Normally such categorisation is clear as per their definition and procurement should be done accordingly, following the relevant guidelines and Model Tender Documents. The boundaries between such categorisation may not be clear cut and may overlap. It may neither be possible nor necessary to precisely distinguish between the categories in overlapping areas. Though simplistic, main distinguishing factors between these are:

a) While both Goods and Works lead to tangible outputs (with some exceptions like IPR materials), yet the main Difference between Goods and Works is that manufacture of goods is done in supplier’s own premises (other than installation/ commissioning), while ‘Works’ is done on the premises of the procuring entity (other than prefabricated components). Works may include incidental ‘Goods’ and vice-a-versa. b) Main Difference Between ‘Goods’ and ‘Works’ on one hand and ‘Services’ on the other is intangibility of outputs of Services. c) Main difference between Consultancy and Non-consultancy services is the level of intellectual inputs – predominant in Consultancy and not central to Non-consultancy. Another difference is that Non-consultancy services are repetitive, routine, with measurable and standardised outputs, while Consultancy services are one-off and non-routine with outputs that are neither exactly measurable nor standardised.

3. In case of Doubt: Procurement in cases of doubts about categorisation may be done as follows: a) In case of blurred border-lines and grey areas, a simpler procedure of procurement should be followed. In case of doubt between: i) Goods and works/ NC services/ consultancy, it should be processed as procurement of goods.

1.4 Categorisation of procurements 1. Categorisation of Procurements helps in preparing guidelines for Procurements and Model Tender Documents, which cater to peculiar contractual conditions of the categories of procurements. Following are the categories of procurements (please refer to the definition in procurement Glossary):

ii) Works and NC service/ consultancy, it should be processed as procurement of works. iii) Non-consultancy and Consultancy services, it should be processed as procurement of non-consultancy services.

b) Procurement of IT Projects should normally be carried out as Procurement of Consultancy services, as the outcomes/deliverables vary from one service provider to another. The IT Projects may include:

i) bespoke software development; ii) cloud based services and iii) composite IT system integration services involving design, development, deployment, commissioning of IT system including supply of hardware, development of software, bandwidth, and operation/maintenance of the system for a define period after go-live etc.

c) 8 Composite Contracts: Composite contracts may involve mixed elements of Goods, Works, and Services. For example, in the Procurement of large machinery, some works and services like Installation, Commissioning, Training, Annual Maintenance Contract (AMC) or a Comprehensive Maintenance Contract (CMC), and so on may be incidental to the supply of goods. The relationship of primacy between the goods element and the works/ services element may be examined, irrespective of the relative values. A possible alternative approach could be to have separate but linked contracts for such elements of Goods, Works, and Services, but implementation may become challenging. If the primary objective is the Procurement of goods with services/ works being incidental to it, it may be processed as procurement of Goods. However, if the primary objective is Procurement of Works/ services with Procurement of goods being incidental, then it should generally be processed as Procurement of works/ services (as the case may be), irrespective of the relative values.

i) Procurement of “new product” viz. Mechanical, Electrical or ICT assets etc of the nature of Machinery and Plant with incidental works/ services like fabrication, installation, erection, commissioning, AMC/CMC should be handled as procurement of goods, except for procurement of IT Projects as specified above. ii) AMC/ CMC of existing Mechanical, Electrical or ICT assets of the nature of Machinery and Plant should be treated as procurement of Non-Consultancy Services.

1) If the NC services primarily involve construction, fabrication, repair, maintenance, overhaul, renovation, decoration, installation, erection, excavation, dredging, and so on, of Civil assets, then it should be handled as procurement of Works. 2) Procurement of new mechanical and electrical works (not in the nature of Machinery and Plant) involving fabrication, installation, erection of a mechanical or electrical nature should be treated as procurement of Works, if elements of procurement of Goods is incidental.

3) Repair, renovation, maintenance, overhauling, decoration, AMC/ CMC, or similar work for existing Mechanical, Electrical or ICT assets NOT of the nature of Machinery and Plant etc should normally be handled as procurement of services. d) It is possible that, depending on the nature and complexity of the assignment, a task could be dealt with either as a consultancy or non-consultancy service. In essence, if the intellectual and advisory part of services is the primary objective (irrespective of relative value of these component), the selection needs to be dealt with in Consultancy mode. For example, if the task is looking at the condition of a dam (for dam safety) by physically inspecting a dam through underwater observation, this task is collection of data using technologies and photography, but the actual analysis is an intellectual and advisory task and is the primary objective of the assignment. Therefore, the entire task needs to be dealt with as selection of a consultant.