Para 1.10.7 — GOODS_MANUAL

2. The Delhi Special Police Establishment (DSPE), which forms a part of the Central Bureau of Investigation, has two Divisions, viz.

(i) Anti-corruption Division (ACD) and

(ii) Special Crimes Division (SCD). ACD investigates all cases registered under the Prevention of Corruption Act 1988. If an offence under any section of the Indian Penal Code18 (IPC), 1860 or any other law is committed along with the offence of bribery and corruption, it shall also be investigated by the ACD. The ACD also investigates cases of serious irregularities allegedly committed by public servants. The SCD, on the other hand, investigates all cases of Economic offences and all cases of conventional crime, such as offences relating to internal security, espionage, sabotage narcotics and psychotropic substances, antiquities, murders and dacoities/robberies, cheating, criminal breach of trust, forgery dowry deaths, suspicious deaths, etc.

1.10.7 Central Bureau of Investigation (CBI) 1. Under the Delhi Special Police Establishment Act, 194616, the Central Bureau of Investigation (CBI), a police organisation under the Dept. of Personnel, Ministry of Personnel, Pension & Public Grievances, is the only oversight agency with police powers. It investigates and prosecutes corruption cases (including those related to public procurement) requiring arrest, seizure of properties and enforcement of compliance from non-government agencies. The prosecutions are carried out under inter-alia the Prevention of Corruption Act17, 1988. It takes up cases based on complaints received from stakeholders or the general public. Though its jurisdiction is restricted to Delhi and UTs, under sections 5 & 6 of the act, the Central government can extend its powers and jurisdiction to a state with the consent of the government of that State for investigation of specified offences (generally related to All India services or Members of Parliament). High Courts and the Supreme Court can also order the CBI to investigate cases outside its normal jurisdiction for which no consent is required from the state.

Reserved Items and Other Purchase/ Price Preference Policies The Central Government may, by notification, provide for mandatory procurement of any goods or services from any category of bidders or provide for preference to bidders on the grounds of promotion of locally manufactured goods or locally provided services. (General and Financial Rules, 2017, Rule 153).

1.11.1 Reservation of Procurement of Certain Class of Products from Certain Agencies 1. Khadi Goods/Handloom Textiles: Out of the total procurement of handloom origin textiles required by Central Government departments throughout the year, it shall be mandatory to make procurement of at least 20% from the Khadi & Village Industries Commission (KVIC) and/ or Handloom Clusters such as Co-Operative Societies, Self Help Group (SHG) Federations, Joint Liability Group (JLG), Producer Companies (PC), Corporations etc. including Weavers having Pehchan Card19. Khadi and Handloom goods are also available in the government e-marketplace (GeM). (General and Financial Rules, 2014, Rule 153-(i)).

3. While the superintendence of DSPE, as far as it relates to an investigation of offences under the Prevention of Corruption Act, 1988, vests in the CVC, for all other matters, the superintendence of DSPE vests in the Central Government. 4. The administration of DSPE vests in the Director of the CBI, who is appointed on the recommendations of a committee headed by the Central Vigilance Commissioner. He holds office for a period of not less than two years. The Director of CBI exercises in respect of DSPE powers exercisable by an Inspector General of Police regarding the police force in a State. 5. DSPE cannot conduct any inquiry or investigation into any offence alleged to have been committed under the Prevention of Corruption Act, 1988, except with the prior approval of the Central Government where such allegation relates to employees at the level of Joint Secretary and above in the Central Government or corporations established by or under any Central Act, Government companies, societies, and local authorities owned or controlled by it. 6. No such approval, however, is necessary for cases involving the arrest of a person on the spot on the charge of accepting or attempting to accept any gratification other than legal remuneration.

Note: Before considering any purchase preference/ product reservation mentioned below, the procuring entity should check the latest directives for necessary action. Product Reservation/ Purchase Preference provision shall invariably be part of the Notice Inviting Tender (NIT) and Instructions to Bidders (ITB).

3 Reservation of specific items for procurement from Micro and Small Enterprises (MSE): To enable wider dispersal of enterprises in the country, particularly in rural areas, the Central Government Ministries or Departments or Public Sector Undertakings shall continue to procure items reserved for procurement exclusively from MSE [presently 358 (three hundred and fifty-eight] items including eight items of Handicrafts) from Micro and Small Enterprises, which have been reserved for exclusive purchase from them. The latest list can be found on the MSME Ministry’s website. Ministry of MSME has clarified that the laminated paper Gr. l, ll and Ill are not covered under the paper conversion product (SI.No.202) of the

2. Pharmaceuticals from Pharmaceutical CPSEs: a) The Pharmaceuticals Purchase Policy20, 2013 is intended to ensure. i) Optimum utilization of the installed capacity and the provision of a necessary fillip in reviving these ailing pharmaceuticals CPSEs. ii) Availability of quality medicines at low prices to the masses iii) Drug security of the nation. b) The salient features of this policy are as follows: i) Pharmaceuticals Purchase Policy in respect of 103 (one hundred and three) medicines, originally valid for a period of five years, has now been renewed and extended21 till the final closure/ strategic disinvestment of the Pharma PSEs mentioned below. ii) Pharmaceuticals Purchase Policy will extend only to Central Public Sector Enterprises (CPSEs) under the administrative control of the Department of Pharmaceuticals, such as Indian Drugs and Pharmaceuticals Limited (IDPL), Hindustan Antibiotics Limited (HAL), Bengal Chemicals and Pharmaceuticals Limited (BCPL), Karnataka Antibiotics and Pharmaceuticals Limited (KAPL) and Rajasthan Drugs and Pharmaceuticals Limited (RDPL) and their subsidiaries where Government of India owns 51% (fifty-one per cent) or above shares. iii) This would be applicable to purchases by Central Government Departments, their Public Sector Undertakings, Autonomous Bodies, etc. This would also be applicable to the purchase of medicines by state governments under health programmes funded by the government of India, such as the National Rural Health Mission. iv) The pricing of the products would be done by the National Pharmaceutical Pricing Authority (NPPA) using the cost-based formula, as mentioned in the Drugs Price Control Order, 1995. A uniform discount of 16% (Sixteen per cent) would be extended to all products. All the taxes, whatsoever, would have to be passed on to buyers. v) Annual revision of prices would be linked to the Wholesale Price Index as per provisions contained in the Drugs Prices Control Order, 2013. vi) The procuring entity would purchase from pharma CPSEs and their subsidiaries subject to their meeting Good Manufacturing Practices (GMP) norms as per Schedule 'M' of the Drugs & Cosmetic Rules. vii) In case pharma CPSEs and their subsidiaries fail to supply the medicines, the procuring entity would be at liberty to make purchases from other manufacturers. If the pharma CPSEs or their subsidiaries fail to perform as per the purchase order, they would also be subject to payment of liquidated damages or any other penalty as per the terms of the contract. viii) The list of medicines (please refer to Annexure 29) may be reviewed and revised by the Department of Pharmaceuticals as per requirement.

(Rule 153

(ii) of GFR 2017) 1. The Policy: From time to time, the Government of India (Procuring Entity) lays down procurement policies to help inclusive national economic growth by providing long-term support to micro, small and medium enterprises, and disadvantaged sections of society. The Procurement Policy for Micro and Small Enterprises, 2012 [amended 2018 and 2021] has been notified by the Government in the exercise of the powers conferred in Section 11 of the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006, which is mandatory to be followed by Central Government Ministries/ Departments/ Public Sector Undertakings. Details of the policy, along with the amendments issued in 201823 and 2021, 24 are available on the MSME website25.

Public Procurement Policy22. NSIC may be contacted to locate the sources of such reserved items. 1.11.2 Public Procurement Policy for Micro and Small Enterprises (MSEs)

2. Eligibility: a) Micro and Small Enterprises (MSEs) registered under Udyam Registration are eligible to avail the benefits under the policy. b) This Policy provides preferential procurement of goods produced and services rendered by MSEs. Traders/ distributors/ sole agents/ Works Contract are excluded from the purview of the policy. i) 26In case of an upward change in terms of investment in plant and machinery or equipment or turnover or both, and consequent re-classification, an enterprise shall continue to avail of all nontax benefits of the category (micro, small, or medium) it was in before the re-classification, for a period of three years from the date of such upward change. ii) MSEs would be treated as owned by SC/ ST or Women entrepreneurs: 1) In the case of proprietary MSE, proprietor

(s) are SC /ST or Woman; 2) In the case of partnership MSE, the SC/ ST or Women partners hold at least 51% (fifty-one per cent) shares in the unit; 3) In the case of Private Limited Companies, SC/ ST or Women promoters hold at least 51% (fifty-one per cent) share.

4. Facilities for MSE: a) Reduced Transaction Costs: To reduce the transaction cost of doing business, MSEs will be facilitated by providing them tender documents free of cost, exempting MSEs from payment of earnest money deposits, and adopting e-procurement to bring transparency in the tender process. However, exemption from paying Performance Bank Guarantee/ Security Deposit is not covered under the policy. b) Relaxation in Prior Turnover and Experience: The Procuring Entity may relax the condition of prior turnover and prior experience for start-up enterprises recognized by the Department for Industry & Internal Trade (DPIIT), subject to meeting quality & technical specifications. Startups may be MSMEs or otherwise. Such relaxation can be provided in the case of procurement of works as well. It is further clarified that such relaxation is not optional but normally has to be ensured, except in case of procurement of items related to public safety, health, critical security operations and equipment, etc) where adequate justification exists for the Procuring Entity not to relax such criteria27. The decision of the Procuring Entity in this regard shall be final. Please also refer to para 5.1.3-7-c) and 7.4.1-1-b). (Rule 173

(i) of GFR 2017). c) Timely Payments: Chapter V of the MSMED Act, 2006, also has provisions for ensuring timely payments to the MSE suppliers. The period agreed upon for payment must not exceed forty-five days from the deemed acceptance of the materials supplied by the MSMEs; in case of any discrepancies in the supplies, then the Procuring Entity shall raise an objection to the MSME supplier within 15 days from the date of receipt of materials if such objection is not raised, then it will be taken as deemed acceptance. For delays in payment, the buyer shall be liable to pay compound interest to the supplier on the delayed amount at three times the bank rate notified by the Reserve Bank. For arbitration and conciliation regarding the recovery of such payments and interests, the Micro and Small Enterprises Facilitation Council has been set up in various states.

3. Applicability and Exemptions: a) The policy is applicable to Central Government Ministries/ Departments/ Public Sector Undertakings b) The policy is not applicable to State Government Ministries/ Departments/ State PSEs, but they have similar policies applicable in their state. c) Exemptions: Given their unique nature, defence armament imports shall not be included in computing the 25 (twenty-five) per cent goal for the Ministry of Defence. In addition, defence equipment like weapon systems, missiles, etc., shall remain out of the purview of such a reservation policy. Monitoring of goals set under the policy will be done, as far as they relate to the Defence sector, by the Ministry of Defence itself in accordance with suitable procedures to be established by them.

5. Purchase Preference: a) Under the amended Public Procurement Policy for MSEs, Order 2012, the Central Government Ministries/ Departments/ Public Sector Undertakings shall procure a minimum of 25 per cent of their annual value of goods or services from MSEs. (In accordance with General Financial Rules, 2017, Rule 153-(ii)). b) The annual goal of procurement from MSEs also includes subcontracts to Micro and Small Enterprises by large enterprises and consortia of Micro and Small Enterprises formed by the National Small Industries Corporation. If a subcontract is given to MSEs, it will be considered as procurement from MSEs. c) In tender, if the L1 price is from someone other than an MSE, participating Micro and Small Enterprises (MSE) quoting prices within a price band of L1+15 (fifteen) per cent shall be allowed to supply up to 25 (twenty-five) per cent of the total tendered value by bringing down their price to L1 price. If there is more than one eligible MSE within such price band who agree to match the L1 price, the 25 (twenty-five) per cent quantity is to be distributed proportionately to them

Note: If the procuring entity negotiates with the non-MSE L1 bidder, the price band (L1+15%) should be calculated based on the original L1 price, not the lower negotiated price, and such eligible MSE bidders shall be called to match the new negotiated L1 price as per procedure mentioned above for placement of 25% quantity.

i) Out of the target of 25% of annual procurement from MSEs (Not in the specific tender), the sub-target of 4% of annual procurement from MSEs is earmarked for procurement from MSEs owned by Scheduled Caste (SC)/ Scheduled Tribe (ST) entrepreneurs, and 3% of annual procurement from MSEs is earmarked for procurement from MSEs owned by women entrepreneur. However, in the event of failure of such MSEs to participate in the tender process or meet tender requirements and L1 price, the 4% sub-target for procurement earmarked for MSEs owned by SC/ST entrepreneurs and 3% earmarked to women entrepreneurs will also be met from other MSEs. ii) In case the tender item cannot be split or divided, etc., the MSE quoting a price within the band L1+15% may be awarded for full/ complete supply of total tendered value to MSE, considering the spirit of the Policy for enhancing Govt. Procurement from MSEs. iii) When an L1 bidder is not a Micro and Small Enterprise (MSE), MSE bidders eligible for purchase preference under the policy are those whose prices fall within the preference margin of L1+15%. If the procuring entity negotiates with the L1 bidder, the preference margin (L1+15%) should be calculated based on the original L1 price, not the lower negotiated price. Such eligible MSEs should be invited to match the negotiated L1 price as per the policy.

6. Developing MSE Vendors: The Central Ministries or Departments or Public Sector Undertakings shall take necessary steps to develop appropriate vendors by organising Vendor Development Programmes (VDP) or Buyer-Seller Meets focused on developing Micro and Small Enterprises (MSEs) for procurement through GeM Portal. To enhance the participation of MSEs owned by SCs /STs/ Women in Government procurement, Central Government Ministries/ Departments/ CPSEs should conduct Special Vendor Development Programmes/ Buyer-Seller Meets for SC/STs and Women MSEs.

7. Policy Implementation: a) A Review Committee has been constituted under the Chairmanship of the Secretary, Ministry of MSME, to monitor and review the Public Procurement Policy for MSEs. M/o MSME will review and/or modify the composition of the Committee as and when required. This Committee will, inter alia, review the list of 358 items reserved for exclusive purchase from MSEs on a continuous basis, consider requests from Central Government Departments CPSEs for exemption from 25 (twenty-five) per cent target on a case-to-case basis and monitor achievements under the Policy. b) To monitor the progress of procurement by Central Government Ministries/ Departments and CPSEs from MSEs, the Ministry of MSME launched the MSME ‘Sambandh’28 Portal on 8th December 2017 for uploading procurement details by all CPSEs on a monthly and an annual basis, which the Ministry regularly monitors.

Chapter 1: Introduction –Principles and Policies c) To redress the grievances of MSEs related to non-compliance with the policy, a Grievance cell named “CHAMPION Portal” has been set up in the Ministry of MSME. d) A National SC/ST hub (NSSH - https://scsthub.in/) scheme was launched in October 2016 to provide handholding support to SC/ST entrepreneurs, and it is being coordinated / implemented by the NSIC under this Ministry. e) Clarifications: The office of the Development Commissioner (Micro, Small & Medium Enterprises) issued an FAQ on the Public Procurement Policy for MSE Order, 2012, which is in Annexure 32.