Para 1.4 — GOODS_MANUAL

a) Goods. b) Services i) Consultancy Services and ii) Non-consultancy services c) Works 2. Distinctive Features: Normally, such categorisation is evident from their definition (please refer to the Procurement Glossary section), and Procurement should be done accordingly, following the relevant guidelines and Model Tender Documents. The boundaries between such categorisation may not be clear-cut and may overlap. It may neither be possible nor necessary to distinguish between the categories in overlapping areas precisely. Though simplistic, the main distinguishing factors between these are:

a) While both goods and works lead to tangible outputs (with some exceptions like IPR materials), the main difference between goods and works is that the manufacture of goods is done on the supplier’s own premises (other than installation/ commissioning). In contrast, ‘Works’ is executed on the premises of the procuring entity (other than prefabricated components). Works may include incidental ‘Goods’ and vice-versa. b) The main difference Between ‘Goods’ or ‘Works’ on the one hand and ‘Services’ on the other is the intangibility of the outputs of Services. c) The main difference between Consultancy and Non-consultancy services is the level of intellectual input, which is predominant in Consultancy and not central to Nonconsultancy. Another difference is that non-consultancy services are repetitive routines with measurable and standardised outputs, while consultancy services are one-off and non-routine, with outputs that are neither precisely measurable nor standardised.

3. In case of Doubt: Procurement in cases of doubts about categorisation may be handled as follows: a) A simpler procurement procedure should be followed in the case of blurred border lines and grey areas. In case of doubt between:

i) Goods and works/services/ consultancy - it should generally be processed as Procurement of goods. ii) Works and service/ consultancy - it should generally be processed as Procurement of works.

1.4. Categorisation of procurements 1. Categories: Categorisation of Procurements helps prepare guidelines for Procurements and Model Tender Documents, which cater to peculiar contractual conditions of the categories of procurements. These categories may be further sub-categorised, e.g., Capital Equipment procurement in Goods. Following are the categories of procurements (please refer to their definitions in the ‘Procurement Glossary’ section):

iii) Non-consultancy and Consultancy services - it should generally be processed as Procurement of non-consultancy services. b) The Procurement of IT projects should usually be carried out as a procurement of consultancy services, as the outcomes/deliverables vary from one service provider to another. The IT Projects may include: i) tailor-made software development; ii) cloud-based services iii) Composite IT system integration services involve the design, development, deployment, and commissioning of IT systems, including hardware supply, software development, bandwidth, and operation/maintenance of the system for a defined period after going live, etc. c) If the Non-consultancy services involve construction, fabrication, repair, maintenance, overhaul, renovation, decoration, installation, erection, excavation, dredging, and so on, of Civil assets, then it should be handled as Procurement of Works. In case of fabrication, repair, maintenance, overhaul, renovation, decoration, installation, erection and so on, of mechanical, electrical or ICT assets – e.g., Annual Maintenance Contracts or installation/ commissioning of Machinery and Plant and so on, it may be handled as Procurement of Goods rather than Procurement of services. d) Composite contracts may involve mixed elements of Goods, Works, and Services. For example, in the Procurement of large machinery, some works and services like Installation, Commissioning, Training, Annual Maintenance Contract (AMC) (or a Comprehensive Maintenance Contract (CMC)), and so on may be incidental to the supply of goods. The relationship of primacy between the goods element and the works/ services element may be examined, irrespective of the relative values. If the primary intention is the Procurement of goods with services/ works being incidental to it, it may be processed as such. However, if the primary intention is Procurement of Works/ services with Procurement of goods being incidental, then it should generally be processed as Procurement of works/ services (as the case may be), irrespective of the relative values. A possible approach could be to have separate but linked contracts for such elements of Goods, Works, and Services, but implementation may become challenging.