Annexure 22 — NONCONSULT_MANUAL

NONCONSULT_MANUAL

Local content’ means the amount of value added in India which shall, unless otherwise prescribed by the Nodal Ministry, be the total value of the item procured (excluding net domestic indirect taxes) minus the value of imported content in the item (including all customs duties) as a proportion of the total value, in percent.
Mathematically, Local content = (Sale price - Value of imported content) * 100/ Sale price Where, “Sale price” means price excluding net domestic indirect taxes and “Value of imported content” means price of imported content inclusive of all customs duties
Question 2. How to calculate Local Content in bids involving supply of multiple items from single bidder? Answer: In case of bids requiring supply of multiple items (say “X1”, “X2” and “X3”) by a single bidder, the local content in the bid shall be
Local content = ((Sale price of “X1” - Value of imported content in “X1”) + (Sale price of “X2” - Value of imported content in “X2”) + (Sale price of “X3” - Value of imported content in “X3”)) * 100/ (Sale price of “X1” + Sale price of “X2” + Sale price of “X3”)
Question 3. How to obtain Make in India “MII” certificate? Answer: No such certificate issued by Government of India. As per para 9
(a) of PPP-MII Order, 2017 (as amended on 16.09.2020), the bidders are required to self-certify the local content in their product for purchase value less than Rs.10 crore. For purchases more than Rs.10 crore, as per para 9
(b) of PPP-MII Order, 2017, a certificate from the statutory auditor or cost auditor of the company (in the case of companies) or from a practicing cost accountant or practicing chartered accountant (in respect of suppliers other than companies) is required to be submitted.
Question 4. What is the meaning of class-I local supplier, class-II local supplier and non-local supplier? Answer: PPP-MII Order, 2017 (as amended on 16.09.2020) classifies the suppliers into following 3 categories:
a. ‘Class-I local supplier’ – Suppliers offering items with equal to or more than 50% local content b. ‘Class-II local supplier’ - Suppliers offering items with equal to or more than 20% but less than 50% local content c. ‘Non-local supplier’ - Suppliers offering items with Less than 20% local content
Nodal Ministries/ Departments are authorized to notify a higher minimum local content requirement for any item, i.e., higher than 50/20%, if they deem fit
Question 5. Details of product categories for which nodal Ministry have been notified by DPIIT for PPP-MII, Order 2017 may be provided?
Answer: DPIIT has notified 20 nodal Ministries for different product categories. The details of such product categories and associated Ministry/ Department are available on DPIIT website. Refer link: https://dpiit.gov.in/sites/default/files/Approved%20product%20category%20list
Annexure 22: FAQs About PPP-MII Order, 2017 Question 1. How to calculate Local Content? (Refer para 1.10.2-20) Answer: Para 2 of the PPP-MII Order, 2017 (as amended on 16.09.2020) defines local content as
Answer: Non-local suppliers can only participate in global tender enquiry. Against domestic/ national tenders, only Class-I and Class-II local suppliers can participate in the bidding process. Hence, in case item is not available locally from Class-I/ Class-II local suppliers, global tender enquiry may be floated for procuring item after taking approval of competent authority, as notified by Department of Expenditure under Rule 161
(iv) of GFR.
Question 7. Are provisions of PPP-MII Order applicable only in procurement of the items for which nodal Ministries have been notified and the items for which nodal ministries have issued local content notification?
Answer: No. The provisions of PPP-MII Order are applicable on procurement of all the items by Central Government procurement entities. For the items, for which nodal ministries have not been designated and the items for which nodal ministries have not issued minimum local content notification, the default provision of PPP- MII Order shall apply.
Question 8. Will the cost of transportation, insurance, installation, commissioning, training and after sales service support like AMC/CMC etc. will be considered as a part of local content?
Answer: The cost of transportation, insurance, installation, commissioning, training and after sales service support like AMC/CMC etc. will not be taken into account for calculating local content in any item. DPIIT OM No.P-45021/102/2019-BE-II- Part(1) (E-50310) dated 04.03.2021 refers, available on DPIIT Website. Refer link https://dpiit.gov.in/sites/default/files/Letter%20to%20All%20Ministries030420 21_clarification.pdf
Question 9. Can administrative Ministries grant exemption/ relaxation for procurement of imported items with the approval of Hon’ble Minister In-charge under Para 14 of PPP-MII Order?
Answer: Procurement of imported item is governed by Rule 161
(iv) of GFR. Hon’ble Minister In-charge of administrative Ministry is not the appropriate authority for any exemption/waiver in GFR. As such, procuring entities are advised to follow the procedures as prescribed in GFR Rule 161
(iv) for procurement of imported items. In this regard, minutes of 14th Standing Committee Meeting held on 20.09.2022 issued by DPIIT, refers. (Agenda point Number 5.)
Question 10. Can administrative Ministry/Departments give exemption for wide range of product categories for an extended period of time under Para 14 of PPP- MII Order with the approval of Hon’ble Minister In- charge?
Answer: The administrative Ministries/ Departments shall grant only tender specific exemptions under Para 14 of the Order. Exemptions granted shall remain valid for a period of maximum 01 year only. If the same items are procured again within the aforesaid period of 01year, fresh approval of Minister-in-charge is not required. If any administrative Ministry/ Department intends to grant exemption beyond a period of 01 year, it shall do so only with prior written concurrence of concerned nodal Ministry. In this regard, minutes of 14th Standing Committee Meeting held on 20.09.2022 issued by DPIIT, refers. (Agenda point Number 5.)
Question 11. How do I apply for DPIIT registration under Rule 144
(xi) GFR for entities having beneficial ownership in land border sharing countries?
Answer: The application format for registration of bidders under Rule 144
(xi) GFR is available on DPIIT website. Refer link: https://dpiit.gov.in/sites/default/files/Revised-Format-Bidders-
%20as%20per%2012th%20SCM.pdf Question 6. Can an item be procured from non-local suppliers, if there are no Class-I/ ClassII local suppliers in the country.
31March2021.pdf. Applicants are required to submit one hard copy in the prescribed format along with soft copy (pdf), as detailed in the covering letter of the format. The applicant shall be asked to submit additional hard copies, if required at the later stage.
Question 12. What will be the category of the local suppliers having exactly 20% and 50% local content? Answer: Vide its para 5, the Public Procurement (Preference to Make in India) Order, 2017 dated 16.09.2020 stipulates the minimum local content requirement as under:
“The ‘local content’ requirement to categorize a supplier as ‘Class-I local supplier’ is minimum 50%. For ‘Class-II local supplier,’ the ‘local content’ requirement is minimum 20%. Nodal Ministry/Department may prescribe only a higher percentage of minimum local content requirement to categorize a supplier as ‘Class-I local supplier’/’Class-II local supplier.’ For the items, for which Nodal Ministry/Department has not prescribed higher minimum local content notification under the Order, it shall be 50% and 20% for ‘Class-I local supplier’/” Class-II local supplier’ respectively.”
Accordingly, the local suppliers having exactly 20% and 50% local content will be categorized as "Class-II Local Supplier" and ‘Class-I Local Supplier’ respectively.
Question 13. Whether a Central Government/CPSE Buyer can take cognizance of open undertakings/ futuristic declarations and treat bidder as Class I/ Class II local supplier through the present level of local content of the bidder happens to be below 50%/ 20% respectively?
Answer: Detailed Procedure for Verification of local content declared by suppliers /vendors is elaborated on clause 9 of PPP-MII Order, 2017 dated 16.09.2020 and as per the Order, futuristic declarations regarding local content is not allowed.
4. Opportunity to Explain: a) In light of the above misdemeanours, we hereby grant you a fair opportunity to explain in writing why you should not be debarred, as mentioned in para 2 above.
Annexure 23: Format for Show-cause Notice for Debarment (Refer para 3.8.2-3-c) (On Department Letterhead) File No: (….) (Date) (DoE/ Ministry/ Department/ CPSE/ Organisation) (Address) To, The (Company Name) (Company Address)
Subject: Show Cause Notice for debarment of your Company from participation in Tenders of (Govt. of India/ Ministry/ Department/ CPSE/ Organisation) for the following misdemeanour
References: Relevant Tenders/ Contracts: (……….) Dear Sir/Madam, 1. As a service provider participating in government tenders/ contracts, you must maintain the highest standards of ethical conduct and transparency, as laid down in the Code of Integrity in Public Procurement and other provisions in the relevant Tender Documents/Contracts. 2. Due to your misdemeanour mentioned below relating to the Tender Document/ Contract referred to above, you are proposed to be debarred from participation in all tenders/ contracts of (Govt. of India/ Ministry/ Department/ CPSE/ Organisation) for a period not exceeding two years. 3. Articles of Misdemeanours: As per the imputations detailed in Annexure-1 attached herewith, it is determined that you have committed the following serious misdemeanours relating to the tender/ contract referred to above: a) (You breached the Code of Integrity in Public Procurement as specified in (clause …..) in the Tender Document/ Contract referred to above (please also see Rule 175 of GFR 2017). b) (You made a false declaration of local content as Class I/ Class II local suppliers under Public Procurement (Preference to Make in India, Order 2017, Dtd 16/09/2020 or later, i.e., the Make in India Order), which is also be treated as a breach of code of integrity.) c) (any other actions or omissions101 by the firm that, in the opinion of the Ministry/ Department, warrants debarment).
b) Your response should include Specific Reasons, Mitigating Factors, and Corrective Measures that you intend to take to rectify the situation and prevent recurrence. c) Please also mention if you desire to avail of additional opportunities for an oral hearing in addition to the written submissions. d) Please address your response to the undersigned using the contact details mentioned below. e) Response Deadline: Please submit your response within 15 days of receiving this notice. Failure to do so will result in further action, including an order for debarment.
5. You are required to give details of all ‘allied’ firms that come within the sphere of effective influence based on the following criteria:
a) You, being a proprietary firm, own it, b) You, being a partnership firm, have common (all or majority of) partners, or any one of partners having a profit share of 20% or more in it. c) You have common Management (say the majority of the directors) with it. d) Your partners or directors have a majority interest in its management; e) You have a controlling voice by owning substantial or majority (20% or more) shares in it. f) You directly or indirectly control it, are controlled by it, or are under common control through any agreement/ MoU or otherwise. g) You are a successor/ subsidiary to it or vice-a-versa; h) You have common offices/ manufacturing facilities with it.
6. Annexure-1 details the imputation based on which these misdemeanours have been determined. 7. Annexure 2 lists the documents relied upon for establishing such imputation.
Sincerely, (Name) (Designation) (Contact Information) Annexure 1: (Details of actions/ omissions committed by the firm) Annexure-2: (List of relied upon documents) DA: (Copies of documents attached)

NONCONSULT_MANUAL

Local content’ means the amount of value added in India which shall, unless otherwise prescribed by the Nodal Ministry, be the total value of the item procured (excluding net domestic indirect taxes) minus the value of imported content in the item (including all customs duties) as a proportion of the total value, in percent.
Mathematically, Local content = (Sale price - Value of imported content) * 100/ Sale price Where, “Sale price” means price excluding net domestic indirect taxes and “Value of imported content” means price of imported content inclusive of all customs duties
Question 2. How to calculate Local Content in bids involving supply of multiple items from single bidder? Answer: In case of bids requiring supply of multiple items (say “X1”, “X2” and “X3”) by a single bidder, the local content in the bid shall be
Local content = ((Sale price of “X1” - Value of imported content in “X1”) + (Sale price of “X2” - Value of imported content in “X2”) + (Sale price of “X3” - Value of imported content in “X3”)) * 100/ (Sale price of “X1” + Sale price of “X2” + Sale price of “X3”)
Question 3. How to obtain Make in India “MII” certificate? Answer: No such certificate issued by Government of India. As per para 9
(a) of PPP-MII Order, 2017 (as amended on 16.09.2020), the bidders are required to self-certify the local content in their product for purchase value less than Rs.10 crore. For purchases more than Rs.10 crore, as per para 9
(b) of PPP-MII Order, 2017, a certificate from the statutory auditor or cost auditor of the company (in the case of companies) or from a practicing cost accountant or practicing chartered accountant (in respect of suppliers other than companies) is required to be submitted.
Question 4. What is the meaning of class-I local supplier, class-II local supplier and non-local supplier? Answer: PPP-MII Order, 2017 (as amended on 16.09.2020) classifies the suppliers into following 3 categories:
a. ‘Class-I local supplier’ – Suppliers offering items with equal to or more than 50% local content b. ‘Class-II local supplier’ - Suppliers offering items with equal to or more than 20% but less than 50% local content c. ‘Non-local supplier’ - Suppliers offering items with Less than 20% local content
Nodal Ministries/ Departments are authorized to notify a higher minimum local content requirement for any item, i.e., higher than 50/20%, if they deem fit
Question 5. Details of product categories for which nodal Ministry have been notified by DPIIT for PPP-MII, Order 2017 may be provided?
Answer: DPIIT has notified 20 nodal Ministries for different product categories. The details of such product categories and associated Ministry/ Department are available on DPIIT website. Refer link: https://dpiit.gov.in/sites/default/files/Approved%20product%20category%20list
Annexure 22: FAQs About PPP-MII Order, 2017 Question 1. How to calculate Local Content? (Refer para 1.10.2-20) Answer: Para 2 of the PPP-MII Order, 2017 (as amended on 16.09.2020) defines local content as
Answer: Non-local suppliers can only participate in global tender enquiry. Against domestic/ national tenders, only Class-I and Class-II local suppliers can participate in the bidding process. Hence, in case item is not available locally from Class-I/ Class-II local suppliers, global tender enquiry may be floated for procuring item after taking approval of competent authority, as notified by Department of Expenditure under Rule 161
(iv) of GFR.
Question 7. Are provisions of PPP-MII Order applicable only in procurement of the items for which nodal Ministries have been notified and the items for which nodal ministries have issued local content notification?
Answer: No. The provisions of PPP-MII Order are applicable on procurement of all the items by Central Government procurement entities. For the items, for which nodal ministries have not been designated and the items for which nodal ministries have not issued minimum local content notification, the default provision of PPP- MII Order shall apply.
Question 8. Will the cost of transportation, insurance, installation, commissioning, training and after sales service support like AMC/CMC etc. will be considered as a part of local content?
Answer: The cost of transportation, insurance, installation, commissioning, training and after sales service support like AMC/CMC etc. will not be taken into account for calculating local content in any item. DPIIT OM No.P-45021/102/2019-BE-II- Part(1) (E-50310) dated 04.03.2021 refers, available on DPIIT Website. Refer link https://dpiit.gov.in/sites/default/files/Letter%20to%20All%20Ministries030420 21_clarification.pdf
Question 9. Can administrative Ministries grant exemption/ relaxation for procurement of imported items with the approval of Hon’ble Minister In-charge under Para 14 of PPP-MII Order?
Answer: Procurement of imported item is governed by Rule 161
(iv) of GFR. Hon’ble Minister In-charge of administrative Ministry is not the appropriate authority for any exemption/waiver in GFR. As such, procuring entities are advised to follow the procedures as prescribed in GFR Rule 161
(iv) for procurement of imported items. In this regard, minutes of 14th Standing Committee Meeting held on 20.09.2022 issued by DPIIT, refers. (Agenda point Number 5.)
Question 10. Can administrative Ministry/Departments give exemption for wide range of product categories for an extended period of time under Para 14 of PPP- MII Order with the approval of Hon’ble Minister In- charge?
Answer: The administrative Ministries/ Departments shall grant only tender specific exemptions under Para 14 of the Order. Exemptions granted shall remain valid for a period of maximum 01 year only. If the same items are procured again within the aforesaid period of 01year, fresh approval of Minister-in-charge is not required. If any administrative Ministry/ Department intends to grant exemption beyond a period of 01 year, it shall do so only with prior written concurrence of concerned nodal Ministry. In this regard, minutes of 14th Standing Committee Meeting held on 20.09.2022 issued by DPIIT, refers. (Agenda point Number 5.)
Question 11. How do I apply for DPIIT registration under Rule 144
(xi) GFR for entities having beneficial ownership in land border sharing countries?
Answer: The application format for registration of bidders under Rule 144
(xi) GFR is available on DPIIT website. Refer link: https://dpiit.gov.in/sites/default/files/Revised-Format-Bidders-
%20as%20per%2012th%20SCM.pdf Question 6. Can an item be procured from non-local suppliers, if there are no Class-I/ ClassII local suppliers in the country.
31March2021.pdf. Applicants are required to submit one hard copy in the prescribed format along with soft copy (pdf), as detailed in the covering letter of the format. The applicant shall be asked to submit additional hard copies, if required at the later stage.
Question 12. What will be the category of the local suppliers having exactly 20% and 50% local content? Answer: Vide its para 5, the Public Procurement (Preference to Make in India) Order, 2017 dated 16.09.2020 stipulates the minimum local content requirement as under:
“The ‘local content’ requirement to categorize a supplier as ‘Class-I local supplier’ is minimum 50%. For ‘Class-II local supplier,’ the ‘local content’ requirement is minimum 20%. Nodal Ministry/Department may prescribe only a higher percentage of minimum local content requirement to categorize a supplier as ‘Class-I local supplier’/’Class-II local supplier.’ For the items, for which Nodal Ministry/Department has not prescribed higher minimum local content notification under the Order, it shall be 50% and 20% for ‘Class-I local supplier’/” Class-II local supplier’ respectively.”
Accordingly, the local suppliers having exactly 20% and 50% local content will be categorized as "Class-II Local Supplier" and ‘Class-I Local Supplier’ respectively.
Question 13. Whether a Central Government/CPSE Buyer can take cognizance of open undertakings/ futuristic declarations and treat bidder as Class I/ Class II local supplier through the present level of local content of the bidder happens to be below 50%/ 20% respectively?
Answer: Detailed Procedure for Verification of local content declared by suppliers /vendors is elaborated on clause 9 of PPP-MII Order, 2017 dated 16.09.2020 and as per the Order, futuristic declarations regarding local content is not allowed.
4. Opportunity to Explain: a) In light of the above misdemeanours, we hereby grant you a fair opportunity to explain in writing why you should not be debarred, as mentioned in para 2 above.
Annexure 23: Format for Show-cause Notice for Debarment (Refer para 3.8.2-3-c) (On Department Letterhead) File No: (….) (Date) (DoE/ Ministry/ Department/ CPSE/ Organisation) (Address) To, The (Company Name) (Company Address)
Subject: Show Cause Notice for debarment of your Company from participation in Tenders of (Govt. of India/ Ministry/ Department/ CPSE/ Organisation) for the following misdemeanour
References: Relevant Tenders/ Contracts: (……….) Dear Sir/Madam, 1. As a service provider participating in government tenders/ contracts, you must maintain the highest standards of ethical conduct and transparency, as laid down in the Code of Integrity in Public Procurement and other provisions in the relevant Tender Documents/Contracts. 2. Due to your misdemeanour mentioned below relating to the Tender Document/ Contract referred to above, you are proposed to be debarred from participation in all tenders/ contracts of (Govt. of India/ Ministry/ Department/ CPSE/ Organisation) for a period not exceeding two years. 3. Articles of Misdemeanours: As per the imputations detailed in Annexure-1 attached herewith, it is determined that you have committed the following serious misdemeanours relating to the tender/ contract referred to above: a) (You breached the Code of Integrity in Public Procurement as specified in (clause …..) in the Tender Document/ Contract referred to above (please also see Rule 175 of GFR 2017). b) (You made a false declaration of local content as Class I/ Class II local suppliers under Public Procurement (Preference to Make in India, Order 2017, Dtd 16/09/2020 or later, i.e., the Make in India Order), which is also be treated as a breach of code of integrity.) c) (any other actions or omissions101 by the firm that, in the opinion of the Ministry/ Department, warrants debarment).
b) Your response should include Specific Reasons, Mitigating Factors, and Corrective Measures that you intend to take to rectify the situation and prevent recurrence. c) Please also mention if you desire to avail of additional opportunities for an oral hearing in addition to the written submissions. d) Please address your response to the undersigned using the contact details mentioned below. e) Response Deadline: Please submit your response within 15 days of receiving this notice. Failure to do so will result in further action, including an order for debarment.
5. You are required to give details of all ‘allied’ firms that come within the sphere of effective influence based on the following criteria:
a) You, being a proprietary firm, own it, b) You, being a partnership firm, have common (all or majority of) partners, or any one of partners having a profit share of 20% or more in it. c) You have common Management (say the majority of the directors) with it. d) Your partners or directors have a majority interest in its management; e) You have a controlling voice by owning substantial or majority (20% or more) shares in it. f) You directly or indirectly control it, are controlled by it, or are under common control through any agreement/ MoU or otherwise. g) You are a successor/ subsidiary to it or vice-a-versa; h) You have common offices/ manufacturing facilities with it.
6. Annexure-1 details the imputation based on which these misdemeanours have been determined. 7. Annexure 2 lists the documents relied upon for establishing such imputation.
Sincerely, (Name) (Designation) (Contact Information) Annexure 1: (Details of actions/ omissions committed by the firm) Annexure-2: (List of relied upon documents) DA: (Copies of documents attached)

Annexure 22 — NONCONSULT_MANUAL

Original Rule Text

Annexure 22 — NONCONSULT_MANUAL

Original Rule Text