Para 1.5 — CONSULT_MANUAL

2. Being a decision with a financial bearing and hence invariably requires consultation of the Financial Adviser (unless validly re-delegated within permissible limits or otherwise permitted by DoE through specific orders). The extent of involvement of the Financial Adviser and the Integrated Finance (IFD) in in subsequent stages of procurement matters may be based on one of the following procedures (Para 19, Charter for FA, 2023):

a) Normal Procedure: Under this procedure, the concurrence of the Financial Adviser/ IFD shall be required on all procurement matters, except for matters where redelegation has been done within the limits permissible under the rules/ general orders/ general instructions of DoE. Unless a special procedure is approved by the Secretary of the Department with concurrence of DoE, this procedure shall be followed. b) Special Procedure: The Secretary of the Department may, with the prior concurrence of Secretary Expenditure, decide on a different level of involvement of the Financial Adviser /IFD specific to the Department. The procedure will lay out the types/ classes of cases where the Financial Adviser/ Integrated Finance Division’s (IFD) consultation would be required which may be in terms of threshold financial limits, stages in procurement or types of procurement and contracts viz. consultancy, goods and works contracts etc. or any permutation thereof.

3. In all procedures, payments under approved contracts shall not require IFD consultation except in cases where the payments are in relaxation/variation to approved contract conditions.

1.5 Authorities Competent to incur Expenditure on a Procurement 1. The first step in procurement to procure goods, services or works involves a formal decision to procure something along with the exact or approximate expenditure to be incurred. A Competent authority which is competent to incur expenditure may accord administrative sanction/ approval to incur expenditure on a specific procurement in accordance with the Delegation of Financial Rules (DFPR – extracted in Annexure 1) by following the ‘Procurement Guidelines’ described in this Manual (Rule 145 of GFR 2017). Each ‘Procuring Entity’ may issue a Schedule of Procurement Powers (SoPP) adding further details to the broad delegations in the DFPR, based on the assessment of risks involved in different decisions/ approvals at various stages of Procurement Cycle. A suggested structure of such SoPP is enclosed as Annexure 2.

1.6 Basic Aims of Procurement – Five R’s of Procurement In every procurement, public or private, the basic aim is to achieve just the right balance between costs and requirements concerning five parameters called the five ‘R’s of procurement. The entire process of procurement (from the time that need for an item, facility or services is identified till the need is satisfied) is designed to achieve such a right balance. Although couched in jargon of procurement of Goods, it’s equally applicable to procurement of Consultancy services. The term ‘Right’ is used here in the sense of being ‘optimal balance’:

1.7 Refined Concepts of Cost and Value – Value for Money The concept of price or cost has been further refined into Total Cost Of Ownership (TCO), Life Cycle Cost (LCC) or Whole-of-Life (WOL) to consider not only the initial acquisition cost but also the cost of operation, maintenance, and disposal during the lifetime of the external resource procured. Similarly, the concept of quality is linked to the need and is refined into the concept of utility/ value. These two, taken together, are used to develop the concept of Value for Money (VfM, also called Best Value for Money in certain contexts). VfM means the effective, efficient, and economical use of resources, which may involve the evaluation of relevant costs and benefits, along with an assessment of risks, non-price attributes (e.g., in goods and/or services that contain recyclable content, are recyclable, minimise waste and greenhouse gas emissions, conserve energy and water and minimise habitat destruction and environmental degradation, are non-toxic etc.) and/or life cycle costs, as appropriate. Price alone may not necessarily represent VfM. In public Procurement, VfM is achieved by attracting the widest competition by way of optimal description of need; development of valueengineered specifications/ Terms of Reference (ToR); appropriate packaging/ slicing of requirement; selection of an appropriate mode of Procurement and tendering system. These advanced concepts are explained in Chapter 1 and ‘Appendix 1: Advanced Concepts of Value for Money’ of the Manual for Procurement of Goods, 2024.

1. Right quality; 2. Right quantity; 3. Right price; 4. Right time and place; and 5. Right source. (For more details on basic aims of procurement, please refer to Chapter 1 and ‘Appendix 1: Advanced Concepts of Value for Money’ of the Manual for Procurement of Goods, 2024).