Para 2.3 — GOODS_MANUAL

2.4. Need Assessment and Technical Specification - Risks and Mitigations

Risk Mitigation 1. The need is either artificially created or exaggerated, with the intention to channel benefits to an individual or an organisation. For example, demand is created for a good that is not needed to benefit the company’s owner. Keep records and involve stakeholders: Records of decision-making and data used should be kept. Involve procurement and finance functions at this stage also. End-user and stakeholder consultations should be part of the process. 2. Delays in the Assessment of Need and generation of Indent for Procurement may lead to shortcut procurement procedures that dilute transparency and prevent the achievement of value for money. It may also lead to delays in the delivery of goods. Need assessment should be done sufficiently in advance of the time when goods are required. In the case of urgent requirements, the urgency certificate should be approved by an authority empowered to grant administrative approval for the indent, recording justification – why the need could not be formulated earlier. 3. The estimate of the costs may be inadequate. This may lead to an inadequate response from the bidders and may delay the finalisation of procurement. It may also adversely affect the quality of supplies. Estimates of procurement should be prepared with due diligence, keeping inflation, technology changes, profit margins, etc., in view. 4. Need Description/ Specifications involving subjectivity: Procurements, where samples are asked to be submitted along with the offer and the evaluation, are based on the subjective evaluation of If required, a stock sample for indeterminable parameters, such as shade/tone, size, makeup, feel, finish, and workmanship, may be displayed during procurement to which the offers must conform. If necessary, provide for

2.3. Obtaining Technical, Administrative and Budgetary Sanctions/ Approvals and signing of Indents. Procuring Entities may lay down a schedule of powers for administrative and budgetary approval of indents generated for the procurement of goods (Please refer to Annexure 4 for suggested Structure of SoPP). Before granting such approvals, it should be certified that funds in the budget are available and liability for this indent is noted against the total available budget. In case the delivery schedule is urgent (or shorter than the usual lead time), an urgency certificate should be recorded to justify the urgency. The indenting authority may submit an indent in the form of a Purchase Requisition (Annexure 5) to the procuring entity, giving it adequate time for procurement. Indentors should monitor the progress of the Indents they submit. For this purpose, a register may be maintained in the format provided in Annexure 6. On receipt from the procuring authority, the progress of such Indents should be monitored, and a register may be maintained in the format provided in Annexure 7.

2.5. Procurement Planning

Risk Mitigation samples – which may lead to allegations of corruption. submission of a pre-production sample by the successful bidder

(s) before giving clearance for bulk production of the supply. (para 2.2.1- 9) 5. Need Description/ Specifications and terms of reference are disproportionate to the need identified or made to tilt in favour of one or a group of vendor

(s) or contractor

(s) to restrict competition artificially. Use a formal market discovery tool: A prebid conference and/ or well-publicised EoI may be used to discover the market. Otherwise, encourage and invite comments on the technical and commercial conditions in the tender document or hold a pre-bid conference. 6. Asymmetric dissemination of vital need information: Dialogue for determining solutions available in the market is held only with selected prospective bidders, giving them an undue advantage in preparing for the bidding. Selected prospective bidders get access to inside information that has not been disclosed or disclosed late to others.

Under law any person who has attained majority and is of sound mind or not debarred by law to which he is subject, may enter into contracts. It, therefore, follows that minors and persons of unsound mind cannot enter into contracts nor can insolvent person do so.

2.3 Competency of Parties a) Competency of the parties b) Freedom of consent of both parties c) Lawfulness of consideration d) Lawfulness of object

2.3.1 Parties to the Contract Categories of persons and bodies who are parties to the contract may be broadly sub-divided under the following heads: - a) Individuals b) Partnerships c) Limited Companies d) Corporations other than limited companies i) Contracts with Individuals: Individuals tender either in their own name or in the name and style of their business. If the tender is signed by any person other than the concerned individual, the authority of the person signing the tender on behalf of another must be verified and a proper power of attorney authorizing such person should be insisted on. In case, a tender is submitted in a business name and if it is a concern of an individual, the constitution of the business and the capacity of the individual must appear on the face of the contract and the tender signed by the individual himself as proprietor or by his duly authorized attorney. ii) Contracts with Partnerships: A partnership is an association of two or more individuals formed for the purpose of doing business jointly under a business name. It is also called a firm. It should be noted that a partnership is not a legal entity by itself, apart from the individuals constituting it. A partner is the implied authority to bind the firm in a contract coming in the purview of the usual business of the firm. The implied authority of a partner, however, does not extend to enter into arbitration agreement on behalf of the firm. While entering into a contract with partnership firm care should be taken to verify the existence of consent of all the partners to the arbitration agreement. iii) Contracts with Limited Companies: Companies are associations of individuals registered under Companies Act in which the liability of the members comprising the association is limited to the extent of the shares held by them in such companies. The company, after its incorporation or registration, is an artificial legal person which has an existence quite distinct and separate from the members of shareholders comprising the same. A company is not empowered to enter into a contract for purposes not covered by its memorandum of association; any such agreement more than power entered into the company is void and cannot be enforced. Therefore, in cases of doubt, the company must be asked to produce its memorandum for verification, or the position may be verified by an inspection of the memorandum from the office of the Registrar of Companies before entering into a contract. Normally, any one of the Directors of the company is empowered to present the company. Where persons other than Directors or authorized Managing Agents sign the tenders, it may be necessary to examine if the person signing the tender is authorized by the company to enter into contracts on its behalf. iv) Corporation other than Limited Companies: Associations of individuals incorporated under statutes such as Trade Union Act, CooperativeSocietiesActandSocietiesRegistrationActarealsoartificial persons in the eye of law and are entitled to enter into such contracts as are authorized by their memorandum of association. If any contract must be entered into with any one or such corporations or associations, the capacity of such associations to enter into contract should be verified and also the authority of the person coming forward to represent the said Association.