Procurement Processes and Principles

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Questions and Answers

What factor should be considered when making a make or buy decision?

Capacity of ordnance factories and the cost of production (correct)

Exclusively using resources from private sectors

Only the cost of imported supplies

The reliability of only indigenous sources

Who chairs the Make or Buy Committee at a factory?

AGM/Jt.GM(User)

AGM/Jt.GM(MM)

Member (P&MM)

Sr.GM/GM (correct)

What should be done with non-core activities in ordnance factories?

They should be handled internally regardless of cost

They should not be considered in procurement decisions

They should always be prioritized over core activities

They should be outsourced if cheaper options exist (correct)

Which document serves as an authority for procurement?

Letters of Intent and Roll-on-Plans Signup and view all the answers

What is a crucial criterion for all procurements?

Meeting stringent specifications Signup and view all the answers

What is the purpose of a Notice Inviting Tender?

To invite suppliers or contractors to submit their proposals. Signup and view all the answers

What is the main focus of a Pre-bid Conference?

Clarifying any doubts or questions about the tender prior to submission. Signup and view all the answers

Which statement best describes a Two Bid System?

It requires bidders to submit a technical bid and a financial bid separately. Signup and view all the answers

What usually happens to late tenders in the tender process?

They are typically rejected and not opened. Signup and view all the answers

In the context of tendering, what is meant by Force Majeure?

An unforeseen event preventing a party from fulfilling its contractual obligations. Signup and view all the answers

What is required for bidders to access the benefits available to MSEs under the Public Procurement Policy for MSEs Order, 2012?

Submission of a valid UAM number Signup and view all the answers

For which type of procurement are prior experience and turnover requirements typically not relaxed for Startups?

Public safety needs Signup and view all the answers

What action must be taken if goods and services are being procured specifically for the Defence Services?

They must be sourced from a Defence Public Sector Undertaking. Signup and view all the answers

What should be recorded when invoking the provision to procure from Defence PSUs?

Reasons for invocation of procurement provision Signup and view all the answers

What authority can permit deviations in the standard provisions of tender documents?

An authority competent to grant waivers Signup and view all the answers

Which statement is true regarding Defence PSUs bidding for contracts?

They must bid for contracts through an open tendering process. Signup and view all the answers

What is the status of standard tender documents in the procurement process?

They must be used as enquiry documents and contracts. Signup and view all the answers

What should a contractor provide to justify procurement from Defence PSUs?

Adequate justification for the choice Signup and view all the answers

What is the authorised SIH inventory level for Armoured Vehicles excluding HVF?

6 Months Signup and view all the answers

Which group of factories has the highest authorised SIH inventory level?

HVF Signup and view all the answers

How often should the authorised inventory levels be reviewed?

Annually Signup and view all the answers

What should be done if any Ordnance Factory holds inventory in excess of their authorised limit?

Liquidate the excess inventory Signup and view all the answers

What do the SIH inventory levels reflect in terms of procurement?

They prevent any excess procurement of inventory. Signup and view all the answers

What actions comprise the provisioning period?

Lead time and production duration Signup and view all the answers

What must the Factory monitor when liquidating excess inventory?

Progress of the action plan Signup and view all the answers

Which of the following statements is true regarding the stocking of COTS and Rate contract items?

Stocking is decided based on contract terms. Signup and view all the answers

What is the condition for accepting supplies against subsequent LTE orders?

Completion of supplies under the SDOTE. Signup and view all the answers

Under what circumstance can the OC be exercised?

When SDOTE supplies will not materialise in time. Signup and view all the answers

What is the maximum value of net deficiency for MTO items to procure entirely through LTE without SDOTE?

Rs. 25 lakh Signup and view all the answers

What is crucial for keeping established production lines active?

Obtaining orders from established sources. Signup and view all the answers

What happens if there are fewer than 3 established vendors for LTE procurement?

Registered vendors in the same product range can be included. Signup and view all the answers

What is the maximum monetary ceiling applicable for purchases made through GeM?

Rs. 30,00,000/- Signup and view all the answers

What is the main purpose of utilizing Electronic Reverse Auction?

To allow bidders to present successively more favorable bids Signup and view all the answers

Which tool can government buyers use to ascertain the reasonableness of prices prior to placing an order?

Business Analytics (BA) tools Signup and view all the answers

What is NOT a requirement for purchases above Rs. 30,00,000/- through GeM?

Using offline methods Signup and view all the answers

What should not be done with a demand for goods to avoid piecemeal purchases?

Divide into small quantities Signup and view all the answers

What type of stores is classified as Commercially-off-the-Shelf (COTS) in the context of ordnance factories?

Goods available for retail purchase Signup and view all the answers

Which provision applies to purchases made outside the GeM platform?

Relevant provisions of the Procurement Manual Signup and view all the answers

Who may implement Electronic Reverse Auction according to the guidelines?

OFB after creating a web portal Signup and view all the answers

Study Notes

Tender Process Overview

Tendering Process: A structured process for procuring goods and services, involving various stages like publicity, document sale, bid submission, and evaluation.
Publicity & Notices: Methods for publicizing tender opportunities (e.g., advertised tenders, notice inviting tenders).
Tender Documents: Detailed specifications and requirements for the procurement, including formats and deadlines for submission of bids.
Amendments & Extensions: Process for modifying tender terms or extending deadlines, if necessary.
Prequalification: Requirements for potential bidders to meet certain criteria before participation.
Pre-bid Conferences: Meetings held to clarify any ambiguities in the tender documents.
Tender Receipt & Custody: Procedures for receiving and securely managing submitted bids.
Bid Evaluation Systems: Methods for evaluating bids (e.g., single bid system, two-bid system).
Late Submissions & Unsolicited Offers: Policies for handling late submissions and unsolicited proposals.
Force Majeure: Circumstances that may excuse non-compliance with tender terms under specific conditions.

Special Considerations for Specific Bidders

MSE Bidders: MSE (Micro, Small and Medium Enterprises) bidders who don't submit the required UAM number will lose MSE benefits in electronic tenders.
Startups: Startups might have relaxed prior experience/turnover requirements, but not in critical items like public safety, health, or security equipment.

Procurement from Defence Public Sector Undertakings

Defense PSUs: Defence public sector undertakings will be prioritized to fulfill specific requirements related to defense services, but private sector companies may also be considered for other goods and services through tendering.
Transfer of Tech: Goods developed or manufactured by Defense PSUs will typically be procured only from the related Defense PSU, especially when related to technology transfer.

Standard Tender Documents

Standardization: Standard tender forms are used for consistency and compliance with rules.
Deviations: Exceptions to standard terms or provisions might be possible with clearance by the appropriate authorities.
Indigenous Sourcing: Initiatives to promote domestic production by prioritizing indigenous sources over imports.

Make-or-Buy Decisions

Optimal Use: Decisions to manufacture (make) in-house or outsource (buy) should balance the utilization of factory resources with reasonable costs.
Outsourcing: Non-core activities are encouraged for outsourcing if suitable cost-effective options exist.
Make-Buy Committee: Internal committees oversee make-or-buy decisions based on advice and consultations with technical and procurement members.

Procurement Authority & Specifications

Formalization: Indents, letters of intent, etc., are the official requests for procurement, along with supply plans.
Specifications: Stringent specifications must be met for all procured items.
Inventory Levels: Standardized inventory holding levels are prescribed for various factory groups.
Inventory Review: Inventory holding levels are reviewed periodically, and action plans are required to dispose of excess inventory.

Procurement via GeM

Online Bidding: Large-value procurements (above Rs. 30,00,000) typically take place through the GeM online platform, involving e-bidding or reverse auctions.
Eligibility: This method allows all registered sellers on the GeM portal to bid provided they're eligible for that specific product or service.
Price Reasonableness: The reasonableness of prices is verified before any order placement, including reference to previous purchase prices on GeM or others.
Piecemeal Purchases: Breaking down a large demand for goods into small quantities is discouraged to avoid frequent use of L1 buying or reverse auctions.
SOP: A standard operating procedure (SOP) from OFB/MM will govern the process.

Electronic Reverse Auction

Process: A real-time online bidding method with successively lower bids until the successful bid is selected.
Implementation: Available after establishing a web portal for electronic reverse auctions.

Classification of Goods/Stores

COTS & Non-COTS: Stores are broadly categorized as commercially available (COTS) or specialized (non-COTS, or MTO).
Special Items (MTO): Emphasis on maintaining established sources for specialized items (MTO) due to their non-commercial nature and importance for continued capability.

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Description

This quiz explores key concepts related to make or buy decisions, procurement authority, and tendering processes. Test your knowledge on the roles in procurement committees and the specifics of tender documentation, including the criteria for MSE benefits. Learn about the implications of various procurement strategies and the legalities surrounding procurement for defence services.