Para 1.13 - Procurement Planning | KartavyaDesk
Original Rule Text
different users or slicing requirements into smaller tenders. Please refer to para 2.5.1-2-b) below on merits and demerits of packaging and slicing of requirements. iii) Units of quantity are an important parameter. Some items may be manufactured in metric tons but may be used in units of numbers or units of lengths (for example, steel sheets/structural). For the sake of transparency, it is important to buy an item in units of manufacture. For example, it is better to buy steel/structural in units of weight since it has a tolerance in weight per unit of length; this usually works to the disadvantage of the buyer if it is bought in units of length. The buying and issuing units of an item may be different – but should be standardised. d) Time-schedule and place of product/work/service delivery: Need assessment and generation of indent for procurement should be done sufficiently in advance of the time when goods are required. Delays in need assessment have an adverse impact on the value for money and transparency. Great care is required to be exercised in filling up realistic dates for the requirement of material. The procuring entity should be allowed time in accordance with the established lead times. In urgent cases, the procuring entity may entertain indents providing shorter periods, but such urgencies should be approved by the authority empowered to grant administrative approval for the indent and must be accompanied by proper justification. e) Formulation of Specifications ensures value for money, transparency, a level playing field, and the widest competition. This is further detailed in para 2.2 below. f) Estimation of Cost: The estimated cost in the indent is a vital element in various procurement processes, approvals, and the establishment of reasonable prices at the time of evaluation of the bids. Therefore, it should be worked out realistically and objectively. Following are some of the suggested methods of cost estimates. These are neither mandatory nor comprehensive nor in any order of preference. These methods are not mutually exclusive, and triangulation from different methods would give a more accurate estimate of cost: i) Where historical cost data is available - Last purchase price (or estimated rate in past indents) of this or similar or nearly equivalent requirements, after due updation as per sub-para iv) below; ii) Where no historical cost data is available – Costing Analysis: Where no historical cost data is available, costing analysis through the internal or external expert costing agencies provides a reliable estimate of cost; iii) Where no historical cost data is available, and Costing Analysis is not feasible: In such situations, a rough assessment of cost can be arrived at but should be used with caution for evaluation of the reasonableness of bids: 1) Rough assessment from the price of the assembly/ machine of which the item is a part or vice versa; 2) Published catalogues/ Maximum Retail Price (MRP) printed on the item is the main source for establishing the estimated cost of items. It may be noted that MRPs usually include significant margins for distributors, wholesalers, and retailers; 3) As a last resort, a rough assessment of the opportunity cost of not using this item at all; 4) Market Survey: For commercially available goods, a formal market survey online (GeM portal or other commercial market apps) or a physical survey of the market can provide a reasonable estimate of cost.
What This Means
Para 1.13 of the Manual for Procurement of Goods, 2017, focuses on several crucial aspects of the procurement process to ensure transparency, value for money, and a level playing field for all vendors. It covers important considerations like avoiding artificial division of requirements to favor specific vendors, choosing appropriate units of quantity for procurement, and the significance of timely need assessment. The rule also emphasizes the importance of well-defined specifications and realistic cost estimation during the procurement process.
This rule applies to all government departments and agencies involved in the procurement of goods. It affects everyone from the initial indenting officer to the final approving authority. By adhering to these guidelines, government employees can ensure that procurement processes are fair, efficient, and result in the best possible value for the government. The rule highlights the need for careful planning, accurate specifications, and realistic cost estimations to avoid delays and ensure transparency.
Ultimately, Para 1.13 aims to streamline the procurement process, reduce the potential for corruption, and ensure that public funds are used responsibly. It serves as a reminder that thorough planning and adherence to established procedures are essential for effective and ethical procurement practices.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- •Avoid artificially dividing requirements into smaller tenders to favor specific vendors.
- •Procure items in appropriate units of quantity, preferably units of manufacture (e.g., weight for steel).
- •Conduct need assessment and generate indents well in advance to avoid delays and ensure value for money.
- •Formulate clear and comprehensive specifications to ensure a level playing field and widest competition.
- •Estimate costs realistically and objectively using available data and costing methods.
Practical Example
The Department of Water Resources needs to procure steel pipes for a new irrigation project. Instead of dividing the total requirement of 100 metric tons into five separate tenders of 20 metric tons each (potentially favoring smaller, less competitive suppliers), the department issues a single tender for the entire 100 metric tons. Furthermore, they specify that the steel should be purchased in units of weight (metric tons) rather than length, as weight is a more accurate measure given potential variations in thickness. The indent is raised three months before the pipes are actually needed, allowing ample time for the tendering process. The estimated cost is determined by referencing the last purchase price of similar pipes, adjusted for current market rates. This ensures a fair and transparent procurement process, maximizing value for money.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Frequently Asked Questions
What does 'slicing of requirements' mean, and why is it discouraged?▼
Why is it important to buy items in units of manufacture?▼
What should be done if there is an urgent need for goods and the standard lead time cannot be met?▼
What methods can be used to estimate the cost of goods being procured?▼
Who is responsible for ensuring compliance with Para 1.13?▼
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 1.13 of the Manual for Procurement of Goods, 2017, what is a key consideration regarding the quantity of items being procured?
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