Annexure 18 — GOODS_MANUAL

The formula for price variation will thus be: - = ⎣ ⎢ ⎢ ⎢ ⎡� + � 1 � + � 1 �� 100 ⎦ ⎥ ⎥ ⎥ ⎤ − Pa is then adjustment amount payable to the supplier (a minus figure will indicate a reduction in the contract price) on the date of supply.

Po is the contract price assumed to be price prevailing on the base date (date of last deadline for submission of bids) but is based on indices prevailing on dates prior to this date as explained in L0 and M0 below.

F is the weightage of fixed element not subject to price variation, as a percentage of the total price. a is the weightage of the material element, as a percentage of the total price.

b is the weightage of the labour element, as a percentage of the total price. F, a, and b being percentages should total 100. It is important that these weightages (especially of elements (e.g., fuel, which are known to only become costlier) should match the actual content of Goods, otherwise PVC may result in excessive profit or loss to the bidder.

Lo and L1 are the average wage indices for the quarter before the respective quarters in which base date and date of supply falls; respectively. For example, for a tender with deadline of submission on March 17, 2022, and date of supply is September 15, 2022, Lo would be average wage index for the quarter of Oct-Dec 2021 and L1 would be average wage index for the quarter of Apr-Jun 2022.

140Mo and M1 are the material prices/indices as average of the month, specified number of months (time lag – say two months) prior to the month in which base date falls and average of the month, two months prior to the month in which date of supply falls, respectively. For example, for a tender with deadline of submission on March 17, 2022, and date of supply is September 15, 2022, Mo would be prices/index as average of the month of January 2012 and M1 would be prices/index as average of the month of July 2022. All material prices/indices will be basic prices without excise duty and without any other central, state, local taxes, and duties and Octroi.

If more than one major item of material is involved, the material element can be broken up into two or three components such as Mx, My, Mz.

The following conditions would be applicable to price adjustment: 1. There is a Time-lag period between the date of supply/ base date respectively and the dates on which indices/ prices are to be considered as per above formula. This time lag can be a few months/ weeks prior to such base date/ date of supply, depending on the frequency of publishing/ availability of indices/ prices and the supply chain process of manufacturing. This must be specified in the definitions of L0/ L1 and M0/M1 indices in the formula in the tender document as above. 2. Base date shall be assumed to be the date of last deadline of submission of bids. 3. No price increase is allowed beyond original delivery period. 4. No price adjustment shall be payable on the portion of contract price paid to the seller as an advance/interim payment after the date of such payment. 5. No price adjustment shall be payable if this is less than or equal to 2% (two per cent) of Po.

Annexure 18: Example of Formula for Price Variation Clause (Refer Para 6.6-5-d-x) (The formula for price variation should ordinarily include a fixed element and input elements (material / labour, other inputs e.g., fuel etc. may also be added, if relevant). The figures representing the material element and the labour element should reflect the corresponding proportion of input costs, while the fixed element may range from 10 to 25% (ten to twenty-five per cent). The portion of the price represented by fixed element includes fixed costs and profits and is not subject to variation. The portions of the price represented by the material element and labour element along will attract price variation in proportion to their relative share in total cost.)

6. The total adjustment will be subject to a maximum ceiling of ____% (to be specified in the tender document), beyond which the price variation would be capped at this level. As soon as it comes to light that price variations are likely to go beyond this ceiling, and if the Supplier is not agreeable to the price variation being capped at that level, he may notify the Purchaser under ‘Frustration of Contract’ provisions in the Tender Document/ Clause, for termination of the contract. 7. Payments for each supply would initially be made as per the base price mentioned in the contract. Price adjustment bills should be submitted only quarterly for the supplies made during the quarter. 8. In GTE tenders, extra care should be taken when selecting the price indices. Preferably, the price indices should be from the same country and of the same currency as the country and currency of the bidder. In case, the price is in the currency of a country where inflation is low, and the indices are from a country with much higher inflation rates, � 1 � and � 1 � should be multiplied by a correction factor of exchange rates� 1�, where E0 is the exchange rate of country of M and L indices with reference to currency of price P. For example, if M&L are from India and P is in $, then Eo is Number of Rs. in a $ on base date and E1 is the exchange rate on determination date. 9. Even if there is no price adjustment claim, the supplier must submit all relevant data to prove that there is no downward variation. In any case, he must submit a declaration as follows; “It is certified that there has been no decrease in the price because of decrease in price variation indices in the price variation formula. In the event of any decrease of such indices that come to light later regarding the payment claimed by us, we shall promptly notify this to the purchaser, and we undertake to refund and agree to the purchaser deducting any excess payment made to us in this regard, from our future payment due.”

(Refer Para 6.9-3) Manual for Procurement of Goods, Second Edition, 2024 Annexure 19: Incoterms 2020 More Common Terms in Incoterms:

TERM SERVICE EXW FCA FAS FOB CFR CIF CPT DAP DDP Who Pays Who Pays Who Pays Who Pays Who Pays Who Pays Who Pays Who Pays Who Pays Export packing Seller Seller Seller Seller Seller Seller Seller Seller Seller Loading at point of origin Buyer Seller Seller Seller Seller Seller Seller Seller Seller Inland freight Buyer Buyer Seller Seller Seller Seller Seller Seller Seller Port receiving charges Buyer Buyer Seller Seller Seller Seller Seller Seller Seller Forwarders fee Buyer Buyer Seller Seller Seller Seller Seller Seller Seller Loading on ocean carrier Buyer Buyer Buyer Seller Seller Seller Seller Seller Seller Ocean/air freight charges Buyer Buyer Buyer Buyer Seller Seller Seller Seller Seller Insurance charges for transit risk of the buyer Buyer Buyer Buyer Buyer Buyer Seller Seller Seller Seller Charges at foreign port/airport Buyer Buyer Buyer Buyer Buyer Buyer Seller Seller Seller Customs, duties & taxes abroad Buyer Buyer Buyer Buyer Buyer Buyer Buyer Buyer Seller Delivery charges to the final destination Buyer Buyer Buyer Buyer Buyer Buyer Buyer Buyer Seller

Annexure 20: Progress of Supply Order Register Manual for Procurement of Goods, Second Edition, 2024

Procuring Officer 1. The register will be reviewed and signed by the Head of Office every month. 2. A summary will be prepared and submitted to HoD every quarterly.

Office Superintendent

Sr. No. Supply Order No. and Date Brief Description of Material Name of the Supplier & Registration No. Quantity & Due Date of Delivery Quantity & Actual Date of Delivery Was the delay attributable to the supplier or the procuring entity? Is Penalty Imposed or not? Status of Security Deposit Remarks Qty, Date Qty, Date 1 2 3 4 5 6 7 8 9 10 11 12