Para 4.12.1 — GOODS_MANUAL

4.12.2 Direct Procurement without Quotations - Risks and Mitigations

Risk Mitigation 1. The main risk is the splitting of demand to avoid higher approvals or higher modes of procurements. Supervisors should carry out periodic reviews of such procurements to ensure that the demand is not split into small quantities for the sole purpose of avoiding the necessity of getting approval from the higher authority required for sanctioning the purchase of the original demand or for avoiding LTE or OTE mode of procurement. An annual review of such procurements shall be carried out to ensure that future anticipated requirements are clubbed and procured through LTE/ OTE/ RC. To keep better control, an annual ceiling may be fixed for each office for such a mode of procurement, say, Rupees five Lakh for each office per year. Each office should maintain records to monitor such limits. 2. Over a period, intentionally or otherwise, the due diligence of enquiries from the market may degenerate into a mechanical obtaining of quotations, leading to the development of nexus and crony suppliers. Vendor selection may be manipulated with fake supporting vouchers. Since such smallvalue materials do not undergo accounting Supervisors should cross-check a percentage of cases in the market for prices, fake vouchers, and so on. Supervisors should also check that the same vendor

(s) is not being patronised repeatedly. For the sake of transparency, payments should be made by cheque or through Electronic Clearance Service, except that cash payment may be

4.12.1 Terms and Conditions 1. The competent officer of the procuring entity can initiate and complete this purchase after diligent enquiries from the market and filling out the certificate prescribed (Annexure 10). Such powers, to a limited extent, can also be given to various user sections for operational needs. 2. Normally, an imprest amount (with facilities for cheque payments) sufficient for two months’ estimated procurements can be sanctioned so that officers can handle such procurements. The imprest amount can be recouped on a monthly basis by submission of expense vouchers. 3. In a summary form, records should be kept of the vendors/contractors approached and the prices they indicate. 4. Selection of sellers by diligent market enquiry is of the essence of this mode of procurement. 5. In larger cities, reputed shopping malls may also be included in the market survey. Reputed internet shopping portals may also be explored.

Chapter 4: Modes of Procurement and Tendering Systems

4.13. Direct Procurement by Purchase Committee This mode of procurement is made by a local purchase committee consisting of three members of an appropriate level constituted by HoD. This procedure is slightly more complex and is likely to provide better VfM than direct procurement without quotation; hence, it is suitable for marginally higher thresholds. It is used in the following conditions:

Risk Mitigation and inventory control, there is a risk of the development of a nexus, leakages, and fake procurements and payments. The same set of vendors may get patronised repeatedly for a wide variety of requirements. Since only cursory visual inspections are done, quality may be at risk. allowed up to Rs. 5,000 (Rupees Five thousand). Staff involved with such procurements should not continue in the same role for long and should be rotated frequently.

1. For procurements valued above Rs. 50,000/- (Rupees Fifty Thousand) and upto Rs. 5,00,000/- (Rupees Five Lakh) only on each occasion. This limit for Scientific Ministries/ Departments has been enhanced75 to Rs. Ten Lakhs (above Rs. 1 lakh, as in para 4.11-1 above) on each occasion. 2. Only in case when a certain item is not available on the GeM portal (of required specification or within the required delivery period, etc.)76. However, for procurement outside GeM, it is mandatory for a buyer to generate a “GeM Availability Report and Past Transaction Summary” (GeMAR&PTS)77 with a unique ID on the GeM portal (please see para 4.17.2-8) using his login credentials on GeM. 3. This mode of procurement is described in parlance of procurement of goods; however, in principle, it is equally applicable to contingency expenditure on small works/services.

(Rule 155 of GFR 2017)