Para 7.7.6 — GOODS_MANUAL

2. However, many organisations now process procurements on their own or eProcurement Portals. In such cases, taking printouts and making a physical file just for records may be counter-productive, provided the portals have provisions for audit trails. The documents and records to be maintained electronically or physically will include the following:

a) documents pertaining to the determination of the need for procurement; b) description of the subject matter of the procurement; c) Statement of the justification for the choice of a mode of procurement other than open competitive tendering; d) Documents relating to pre-qualification and registration of bidders, if applicable; e) Particulars of issue, receipt, opening of the bids and the participating bidders at each stage; f) Requests for clarifications and any reply thereof, including the clarifications given during pre-bid conferences; g) Bids evaluated and documents relating to their evaluation;

7.7.6 Audit Trails - Procurement Records 1. As mentioned in para 1.8.5 above, the procuring entity must maintain and retain audit trails, records and documents generated or received during its procurement proceedings in chronological order. The files should be stored in an identified place and retrievable for scrutiny whenever needed without wasting time.

7.8. Evaluation of Bids and Award of Contract - Risks and Mitigations

Risk Mitigation 1. Evaluation of bids is subjective or leaves room for manipulation and biased assessments. Some TC members may not be independent or neutral or may have a conflict of interest (COI). TC should give an undertaking at the appropriate time (as per para 7.6.13-3) that none of the members has any COI with the companies/agencies participating in the tender process. Any member having a COI with any company should refrain from participating in the TC. Some members of a TC may be subordinate to or related to others in a strictly hierarchical organisation so that they are not free to express independent views – such a situation must be avoided when constituting the TC. 2. Discriminating against a Best Value Bid: In case a bidder’s bid (not in the good books of the procuring entity) becomes the best value bid as per the evaluation criteria, some of the following actions may have risks of misuse. There is also a reverse risk in these actions if a favourite becomes the best value bid: Mitigation for each type of risk is mentioned below. 3. Unwarranted retendering: Rejecting all bids and calling for retendering on the pretext of prices being high, change of specifications, budget not being available, and so on. Please refer to para 7.6.11 regarding safeguards against this. In case a procurement is rebid more than once, approval of one level above the CA may be

h) Contracts and Contract Amendments i) Complaint handling, correspondence with clients, consultants, and banks. 3. In organisations where physical files are still maintained, the Procurement file should start with the Indent and related documents. All subsequent documents relating to procurement planning; Copy of Tender Document and documents relating to its formulation, publishing and issue/ uploading; Bid Opening; Bids received; Correspondence and documents (including Technical Evaluation and TC report) relating to pre-qualification, evaluation, Award of Contract; and finally, the Contract copy, should be kept on the file. In case of bulky Bids received, all bids received may be kept in a separate volume, with a copy of accepted bids later being put on the main volume. To maintain the integrity of the records relating to Procurement, these files should be kept secure, and for contract management, a new volume of files may be opened to obviate frequent exposure of sensitive procurement files. In contract management volume, copies of successful bids, Tender Committee Reports, and Contract may also be kept for ready reference, besides correspondence and documents relating to Contract Management and its closure.

Risk Mitigation taken. Please also see the complaint mechanism. 4. Sudden quantity reduction/increase or splitting of quantity work at the time of award: Many organisations have provisions for change/ splitting in the bid quantity at the time of award. Some organisations vary quantity even without such provisions Bid conditions must specify a limit beyond which the originally announced quantity/scope cannot be reduced/increased. If parallel contracts are envisaged, clear criteria for the splitting may be specified in the tender documents beforehand. (Refer to para. Please refer to para 7.6.3. 5. Unwarranted negotiations: negotiations are called without justification. Sometimes, a counteroffer is made to discourage the lowest acceptable bidder. Normally, there should be no post-tender negotiations. In certain exceptional situations, for example, procurement of proprietary items, items with limited sources of supply, and items where there is suspicion of a cartel formation, negotiations may be held with L-1. In case of L-1 backing out, there should be retendering. Please refer to para 7.6.9. 6. Unwarranted delays in finalizing or varying the terms of the contract agreement: even after the TC recommendations are accepted, the signing of the contract is delayed on one pretext or the other. Although there is a standard contract form in the tender documents, the contract may be drafted in a fashion that favours or discourages the successful bidder. A target timeline for the finalisation of procurement should be laid down. Delays and reasons thereof should be brought out before the CA on the file at the time of TC’s acceptance or contract signing. Please refer to para 7.6.1. The contract should be strictly as per the bid conditions and accepted offer. Please refer to para 7.7.5-1. 7. Anti-competitive practices: Bidders, which would otherwise be expected to compete, secretly conspire to frustrate the buyer’s attempts to get VfM in a tender process. Anti-competitive conspiracies can take many forms. Sometimes, the officers involved in procurement may be part of such collusion. Bid coordination: The bidders collude to quote the same or similar rates that are much higher than the reasonable price to force the These strategies, in turn, may result in patterns that procurement officials can detect, and steps can be taken to thwart such attempts. Such anti-competitive activities come under the purview of competition law, which provides stringent penalties. Regular training should be held for officers involved in procurement to detect and mitigate such practices and also to use the competition law against such bidders.

Chapter 7: Bid Evaluation and Award of Contract

Risk Mitigation buyer to settle the procurement at exorbitant prices. Cover bidding: Cover bidding is designed to give the appearance of genuine competition by way of supporting bids for the leading bidrigger. Bid suppression: Bid suppression means that a company does not submit a bid for final consideration in support of the leading bidrigger. Bid rotation: In bid-rotation schemes, conspiring firms continue to bid, but they agree to take turns being the winning (i.e., lowest qualifying) bidder in a group of tenders of a similar nature. Market allocation: Competitors carve up the market and agree not to give competitive bids for certain customers or in certain geographic areas.

8.1.2 Procurement in Crisis Situations - Disaster Management/ Pandemic Normal procurement modes, thresholds and bid systems are not tailored for procurement in crises like Disaster management/ Pandemic. Hence, during such a situation, the following dispensations may be allowed with the approval of competent authorities:

1. There are sufficient fast-track procurement modes and flexibilities in the Procurement guidelines to tackle procurements in operational emergencies/ urgencies. Enhanced delegations of procurement powers may be incorporated in SoPP to handle such situations. The following modes of procurements may be utilised in order of speed:

a) Procurement through the GeM portal b) Direct Procurement Without Quotation c) Direct Procurement by Purchase Committee d) SLTE/ Limited/ Single Tender Enquiry, with reduced time for submission of Bids

1. An order may be issued by the competent authority, declaring the crisis, and promulgating the start of procurements procedures under the crisis, with an estimated validity period till which these would apply. 2. Need Assessment: The most crucial task is to consolidate and aggregate the requirements from all jurisdictions. Specifications should be rationalised considering the market situation. A centralised list may be prepared containing the quantities (unit-wise) and specifications of each item. Such lists may be preserved for future use. 3. If a Crisis is likely to extend over a prolonged period or if such disasters are endemic to the region (floods/ cyclones), rate contracts may be entered into to cater to such situations. 4. This is not the time for complex methods, e.g., reverse auction, etc. The use of the following modes of procurements is suggested in order of speed. To speed up procurement, advance cash may be drawn for direct procurement modes and made available to the Committees/ officer, with accounts and vouchers to be submitted after purchase: a) Procurement through the GeM portal, which responds to such situations as COVID19. b) Direct Procurement Without Quotation c) Direct Procurement by Purchase Committee d) SLTE/ Limited/ Single Tender Enquiry, with reduced time for submission of Bids e) Other than these, unlisted but fast modes of procurement, e.g., enhancement of quantity or repeat orders at the same terms in existing contracts, may be pursued. All contracts may be placed with clauses for quantity enhancements and repeat orders. f) All procurement may be done using single-stage, single-envelope tendering systems. g) Even if pre-qualification is felt necessary, self-declaration in a single envelope may be called for instead of a time-consuming pre-qualification bid. h) Pre-bid conferences may be replaced by informal market research.

Chapter 8: Procurements with Unique Features 8.1. Handling Procurement in Emergencies and Disaster Management 8.1.1 Procurements in Emergencies/ Urgencies

5. Enhanced delegations of procurement powers in SoPP may be considered, with the approval of the Secretary of the Department, to handle such situations. 6. Deliveries that suit the urgent/ emergent and disaster management situation may only be allowed. 7. The reasonableness of prices in such situations may be judged by keeping in mind that prices in such situations may be higher than in normal procurement to cater to express deliveries/ disruptions, etc. 8. Model Tender Documents or General Conditions of Contract should not apply to emergency procurements. 9. Minimum timelines for bid submission may be shortened (say 1-3 days). Bids by phone, email, and in-person may also be considered. 10. Norms of minimum bids in a tender may be relaxed, and even a single offer may be accepted without retendering. No tender should normally be allowed to be discharged or re-invited. 11. In emergency procurements, time-consuming norms for Tender Document costs, Earnest Money Deposit (EMD), Security Deposit (SD or performance guarantee), vendor registration fee, verification of eligibility/ qualification (by putting the onus on the vendors to self-declare his eligibility, qualifications, and capability, with penalties for false declarations), Liquidated Damages (LD) or other penalties, Negotiations, etc., may be dispensed with or relaxed. Delegation in this regard may be enhanced and delegated to cutting-edge levels. 12. Documents required for various stages – bids, qualification, eligibility, inspection, and payment must be barely minimum. 13. Instead of physical inspections, vendors’ self-declaration of quality may be accepted. 14. Putting GeM at the centre of all such emergency procurement would help in transparency and price monitoring. However, in urgent/ emergent and Disaster Management situations, in case of procurement below Rs. 50,000, if deliveries are not suitable on GeM, procurement may be done locally as per sub-para 4) above, even if the items are available on GeM, as an exception to the rule. Prior or post facto sanction may be taken from the Secretary of the Department. 15. Ensuring Transparency, Integrity, and Accountability: a) As far as feasible, procurement may be done on the GeM portal. b) All procuring agencies should constitute a separate team (without hampering people involved in procurement) to keep a record of justification and quantum of emergency procurements for future accountability. c) After the crisis is over i) The Competent Authority may issue an order signalling the end of the crisis and the emergency procurement procedures. ii) Special time-bound internal and external audits of all emergency procurements should be done with a large sampling size when normalcy returns. If need be, public or private agencies may be hired to assist with this large volume of audits. iii) Any undelivered contract, if any, may be reviewed for cancellation. iv) Unutilised stocks, if any, may be reviewed for gainful use. 16. Getting Ready for Future Disasters: Such emergency procurement systems and lists may be formalised for future disasters, e.g., the enhanced delegations may be integrated into the normal SoPP as delegations in defined crisis.