Para 1.11.4 - Procurement Scope | KartavyaDesk
Original Rule Text
a) to all Autonomous Bodies; b) to public sector banks and public sector financial institutions; c) to all Central Public Sector Enterprises; d) to all procurement in Public Private Partnership projects receiving financial support from the Government or public sector enterprises/ undertakings; e) Union Territories, National Capital Territory of Delhi, and all agencies/ undertakings thereof. f) The Order is not applicable: i) In projects that receive international funding with the approval of the Department of Economic Affairs (DEA), Ministry of Finance, the procurement guidelines applicable to the project shall normally be followed, notwithstanding anything contained in this order and without reference to the Competent Authority. Exceptions to this shall be decided in consultation with DEA. ii) On procurements made by Indian missions and by offices of government agencies/ undertakings located outside India. iii) On bidders (or entities) from those countries (even if sharing a land border with India) to which the Government of India has extended lines of credit or in which the Government of India is engaged in development projects. Updated lists of countries to which lines of credit have been extended or in which development projects are undertaken are given on the Ministry of External Affairs’ website31. iv) On procurement of spare parts and other essential service support like Annual Maintenance Contract (AMC)/ Comprehensive Maintenance Contract (CMC), including consumables for closed systems, from Original Equipment Manufacturers (OEMs) or their authorized agents, shall be exempted from the requirement of registration as mandated under Rule 144(xi) of GFR, 2017 and Public Procurement orders issued in this regard32. v) A bidder is permitted to procure raw materials, components, sub-assemblies, etc., from vendors from countries that share a land border with India. Such vendors will not be required to be registered with the Competent Authority, as it is not regarded as “sub-contracting.” However, if a bidder proposes to supply finished goods procured directly/ indirectly from vendors from countries sharing a land border with
What This Means
Para 1.11.4 of the Manual for Procurement of Goods, 2017, essentially defines the scope of application and exceptions to certain procurement rules. It specifies which government bodies and projects are subject to these rules and, more importantly, outlines situations where the rules don't apply. This is crucial because it ensures that specific projects, like those funded internationally or involving unique circumstances like procuring spare parts for specialized equipment, aren't unnecessarily burdened by standard procurement procedures. This helps streamline processes and allows for flexibility when dealing with international collaborations or specialized needs.
Specifically, the rule states that the procurement guidelines apply to autonomous bodies, public sector banks and financial institutions, Central Public Sector Enterprises, Public Private Partnership projects receiving government funding, and Union Territories (including Delhi). However, it carves out exceptions for projects with international funding approved by the Department of Economic Affairs, procurements by Indian missions abroad, and situations involving countries with Indian lines of credit or development projects. It also exempts procurement of spare parts and essential service support from OEMs and allows bidders to source raw materials from countries sharing a land border with India without requiring vendor registration.
In essence, this rule aims to balance the need for transparency and accountability in government procurement with the practical realities of international collaborations, specialized equipment maintenance, and geopolitical considerations. Understanding these exceptions is vital for government employees involved in procurement to ensure compliance while maintaining efficiency and flexibility.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- •The rule applies to a wide range of government bodies including autonomous bodies, PSBs, CPSEs, PPP projects with government funding, and Union Territories.
- •Exceptions exist for projects with international funding approved by DEA, procurements by Indian missions abroad, and countries with Indian lines of credit/development projects.
- •Procurement of spare parts and essential service support from OEMs is exempted from certain registration requirements.
- •Bidders can procure raw materials from countries sharing a land border with India without vendor registration.
- •The rule aims to balance transparency with practical considerations in procurement.
Practical Example
The National Highways Authority of India (NHAI) is undertaking a road construction project in partnership with a Japanese company, J-Roads, with partial funding from the Japan International Cooperation Agency (JICA). The Department of Economic Affairs (DEA) has approved the international funding. According to Para 1.11.4(f)(i), the procurement guidelines applicable to the JICA-funded project will be followed, even if they differ from the standard Manual for Procurement of Goods, 2017.
Later, NHAI needs to procure specialized road maintenance equipment, including spare parts, for a machine originally manufactured by a German company, RoadTech GmbH. According to Para 1.11.4(f)(iv), NHAI can directly procure these spare parts and related AMC from RoadTech GmbH or their authorized Indian agent without requiring them to register as a vendor under Rule 144(xi) of GFR, 2017.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Frequently Asked Questions
Does this rule apply to all government departments?▼
What happens if there's a conflict between this rule and the procurement guidelines of an internationally funded project?▼
If a company from Nepal wants to bid on a government project, do they need to register with a Competent Authority?▼
What constitutes 'essential service support' that is exempted from registration?▼
Where can I find the updated lists of countries to which lines of credit have been extended or in which development projects are undertaken?▼
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Test Your Knowledge
Question 1 of 3
According to Para 1.11.4 of the Manual for Procurement of Goods, 2017, which of the following entities is generally subject to the procurement guidelines outlined in the manual?
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