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Para 5.2 - OEM Authorization | KartavyaDesk

Goods Manual

Original Rule Text

4. OEM/ Agents of Supplier: a) Except in the case of Commercially-Off-the-Shelf (COTS) items, when a firm sends a quotation for an item manufactured by some different company, the firm is also required to attach, in its quotation, the manufacturer's authorisation certificate and manufacturer's confirmation of extending the required warranty support for that product (in addition to the bidders' confirmation to the required warranty) as per formats given in Tender Documents. This is necessary to ensure a quotation from a responsible party offering a genuine product backed by a warranty obligation from the concerned manufacturer. b) In the case of large contracts, especially capital equipment, the manufacturer’s authorisation must be insisted upon on a tender-specific basis, not general authorisation/dealership, by clearly declaring it in the tender documents.

What This Means

Para 5.2 of the Manual for Procurement of Goods, 2017, focuses on ensuring that when you're buying goods, especially those not readily available 'off-the-shelf' (COTS), you're getting a genuine product with proper warranty support. If a company quoting for a product isn't the actual manufacturer, they need to provide proof that the manufacturer authorizes them to sell it and that the manufacturer will honor the warranty. This protects the government from buying counterfeit or unsupported products. For big purchases like expensive equipment, the authorization needs to be specifically for that tender, not just a general dealership agreement.

This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.

Key Points

  • •Applies to non-COTS (Commercially-Off-the-Shelf) items.
  • •Requires manufacturer's authorization certificate when the bidder is not the manufacturer.
  • •Manufacturer must confirm warranty support in addition to the bidder's warranty.
  • •For large contracts (especially capital equipment), tender-specific manufacturer's authorization is mandatory.
  • •Ensures genuine products and proper warranty support.

Practical Example

The Ministry of Agriculture needs to purchase 10 high-tech soil testing machines. Company 'AgriSolutions' submits a bid, but they don't manufacture the machines; 'TerraTech' does. AgriSolutions must include a letter from TerraTech authorizing them to bid on this specific tender and confirming that TerraTech will provide warranty support for the machines. If the contract is worth ₹5 crore, the tender document should explicitly state that a general dealership agreement is not sufficient; a tender-specific authorization from TerraTech is required. Without this, the Ministry cannot accept AgriSolutions' bid, even if it's the lowest, because it lacks assurance of manufacturer backing.

This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.

Frequently Asked Questions

What are 'Commercially-Off-the-Shelf' (COTS) items?▼
COTS items are products readily available in the market, like standard office supplies or commonly used software. This rule doesn't strictly apply to them.
What happens if the bidder doesn't provide the manufacturer's authorization?▼
The bid is likely to be rejected. The authorization is crucial to ensure the product's authenticity and warranty support.
Is a general dealership agreement sufficient for large contracts?▼
No. For large contracts, especially for capital equipment, the tender document must explicitly require a tender-specific manufacturer's authorization, not just a general dealership agreement.
Why is manufacturer's warranty confirmation required in addition to the bidder's warranty?▼
It provides an additional layer of security. If the bidder goes out of business, the manufacturer's warranty still protects the government's investment.
Does this rule apply to services?▼
This rule primarily applies to the procurement of goods. Services may have different requirements outlined elsewhere in the procurement manual.

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 5.2 of the Manual for Procurement of Goods, 2017, which of the following items generally requires a manufacturer's authorization certificate if the bidder is not the original manufacturer?

Related Rules

Para 9.4Manual for Procurement of Goods, 2024 - Para 9.4 - Chapter 9Para 9.5.5Manual for Procurement of Goods, 2024 - Para 9.5.5 - Chapter 9Para 1.8.2Manual for Procurement of Goods, 2024 - Para 1.8.2 - Chapter 1Para 2.2.2Manual for Procurement of Goods, 2024 - Para 2.2.2 - Chapter 2Para 2.2Manual for Procurement of Goods, 2024 - Para 2.2 - Chapter 2

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