Railway Materials Purchase Policies
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Questions and Answers

When should full payment for stores be made?

  • After inspection and delivery by the Receiving Officer (correct)
  • After shipping documents are received
  • Immediately after the despatch documents are provided
  • Upon placing the order
  • What is required before making advance payment to firms?

  • Verification of the shipping documents
  • Inspection of stores prior to despatch by a purchaser's nominee (correct)
  • A written guarantee from the Railway Board
  • Payment terms agreed upon verbally
  • In exceptional cases involving import, what must be done if prior inspection is not possible?

  • Consult the Railway Board for pricing approval
  • Make payment without any guarantees
  • Request a formal inspection after delivery
  • Obtain bank guarantee and consult specific financial authorities (correct)
  • Who has the discretion to invite tenders from abroad?

    <p>General Manager</p> Signup and view all the answers

    Why should tenders be invited from abroad as well as in India?

    <p>To obtain adequate publicity and ensure economic purchase</p> Signup and view all the answers

    What is the standard medium for public advertisements in India?

    <p>Indian Trades Journal</p> Signup and view all the answers

    What should be done to promote tenders invited from abroad?

    <p>Engage agencies of Indian Embassies for additional publicity</p> Signup and view all the answers

    When is the acceptance of a tender considered complete if posted via registered post?

    <p>As soon as it is posted</p> Signup and view all the answers

    What should be taken into consideration along with quotations from supplying firms for purchasing materials?

    <p>Freight element in determining cost</p> Signup and view all the answers

    Which factor is NOT mentioned as a reason to divide contracts?

    <p>Market trends</p> Signup and view all the answers

    What is required before placing an order for imported articles after inviting tenders for locomotive components manufactured in India?

    <p>Sanction from the Railway Board</p> Signup and view all the answers

    For tenders over Rs. 8 crores or Rs. 2 crores involving foreign exchange, what is required before acceptance?

    <p>Recommendations sent to the Railway Board</p> Signup and view all the answers

    What should be done if the response to an invitation to tender is poor?

    <p>Invite fresh tenders and improve publicity</p> Signup and view all the answers

    Which consideration is important when inviting tenders financed through foreign loans?

    <p>Terms and conditions of the loan or agreement</p> Signup and view all the answers

    What information must tenderers provide regarding their products?

    <p>The country of manufacture and/or origin</p> Signup and view all the answers

    How should offers for imported articles be evaluated?

    <p>Converted to Indian Currency at the exchange rate on the tender opening date</p> Signup and view all the answers

    What basis should contracts for imported articles generally be finalized on?

    <p>F.O.B./F.A.S.</p> Signup and view all the answers

    What should be considered when specifying the point or place of delivery?

    <p>Ensure equal opportunities for all tenderers to offer their lowest prices</p> Signup and view all the answers

    In the case of imported articles, which additional terms may be justified for contracts?

    <p>F.O.R. Indian Port</p> Signup and view all the answers

    Who are typically instructed to submit tenders?

    <p>The General Manager or Controller of Stores in India</p> Signup and view all the answers

    What is the primary reason for providing sufficient time for submitting tenders?

    <p>To allow tenderers to prepare comprehensive bids</p> Signup and view all the answers

    What is the estimated purchase value that mandates the use of the OPEN Tender System in normal circumstances for items other than safety items?

    <p>Rs. 10 lakh</p> Signup and view all the answers

    In emergency procurement, what is the value threshold for the OPEN Tender System to be applicable?

    <p>Over Rs. 2 crore</p> Signup and view all the answers

    Which document is NOT required from firms not on the list of approved contractors when submitting a tender?

    <p>Details of financial status</p> Signup and view all the answers

    What is required to determine if a tender from an unknown firm is satisfactory before placing an order?

    <p>Verification of the firm's production capacity</p> Signup and view all the answers

    What happens to the name of a firm if their executed order is satisfactory?

    <p>It is added to the list of approved contractors</p> Signup and view all the answers

    Which of the following states the maximum value for safety item procurement via the OPEN Tender System?

    <p>Rs. 2 crore</p> Signup and view all the answers

    What must firms submit along with their quotation, according to the prescribed proforma?

    <p>Details of quality control equipment</p> Signup and view all the answers

    What should be recorded if an inquiry about an unknown firm yields unsatisfactory results?

    <p>The result of the inquiries</p> Signup and view all the answers

    What is the purpose of inviting tenders by public advertisement according to the OPEN Tender System?

    <p>To ensure transparency and competition</p> Signup and view all the answers

    Which of the following is NOT an exception to the general rule of using the OPEN Tender System?

    <p>Procurement of office supplies under Rs. 5 lakh</p> Signup and view all the answers

    Which supply order value range requires firms to be a manufacturer or an authorized agent?

    <p>Above Rs. 1 Lakh</p> Signup and view all the answers

    What is the revised limit for firms executing supply orders as per the new regulations?

    <p>Rs. 1 Lakh and Rs. 5 Lakhs</p> Signup and view all the answers

    What is required for a firm to be included in the approved list of suppliers?

    <p>Provisional registration and satisfactory execution of one order</p> Signup and view all the answers

    What should be done if firms not on the approved list are to be issued limited tender enquiries?

    <p>Approval from a higher authority is needed</p> Signup and view all the answers

    What is the minimum number of firms to which limited tender enquiries should preferably be issued?

    <p>Three firms</p> Signup and view all the answers

    What happens if a firm is pre-inspected and found fit for the approved list of one Railway?

    <p>It is automatically included in other Railways' approved lists</p> Signup and view all the answers

    What is one of the criteria for assessing a firm's capability before registration?

    <p>Quality control effectiveness</p> Signup and view all the answers

    Which of the following is a correct statement regarding registration of firms?

    <p>New and old registered firms are treated equally after confirmation.</p> Signup and view all the answers

    What is the maximum order value mentioned for firms capable of executing orders to be newly registered?

    <p>Above Rs. 10 Lakhs</p> Signup and view all the answers

    What detailed information must firms not on the approved contractors' list provide when submitting a tender?

    <p>Name and full address of their Bankers</p> Signup and view all the answers

    In what scenario should the OPEN Tender System be used for the procurement of safety items?

    <p>When the estimated value exceeds Rs. 2 Crores</p> Signup and view all the answers

    What action should be taken if inquiries about a tender from an unknown firm prove unsatisfactory?

    <p>Record the unsatisfactory results and refrain from placing the order</p> Signup and view all the answers

    What document must firms provide related to income when submitting a tender for the first time?

    <p>Income tax clearance certificate</p> Signup and view all the answers

    Under what condition can a firm not on the approved contractor list be added to that list?

    <p>If their performance on a completed order is satisfactory</p> Signup and view all the answers

    What is the primary consideration when choosing suppliers for purchases of railway stores?

    <p>The quality of materials provided</p> Signup and view all the answers

    Which of the following categories of articles is prioritized last when making purchases?

    <p>Articles manufactured abroad that need special importation</p> Signup and view all the answers

    What condition must articles produced in India meet for them to be accepted as a priority?

    <p>They should be of sufficiently good quality for the intended purpose</p> Signup and view all the answers

    How should articles from the second category, partially manufactured in India, be evaluated?

    <p>With consideration of their suitability and quality</p> Signup and view all the answers

    Which of the following is NOT a source of supply for stores as per the established purchasing policy?

    <p>Direct imports without prior tender process</p> Signup and view all the answers

    When considering foreign articles held in stock in India, what is the necessary condition for their acceptance?

    <p>They should be of suitable type and requisite quality</p> Signup and view all the answers

    What is one of the main objectives of the government's purchasing policies regarding stores?

    <p>To encourage the development of domestic industries</p> Signup and view all the answers

    How many items are currently reserved for exclusive purchase from KVIC/Women’s Development Corporations/Small Scale Sector Units?

    <p>409</p> Signup and view all the answers

    What criteria defines a Public Sector Undertaking according to the directives mentioned?

    <p>Companies where not less than 51% of the paid-up share capital is held by the government</p> Signup and view all the answers

    What is the currency condition for articles required to be purchased for Indian Railways that do not need special import?

    <p>Payment in rupees with delivery in India</p> Signup and view all the answers

    What percentage of paid-up share capital defines a company as a Public Sector Undertaking?

    <p>Not less than 51%</p> Signup and view all the answers

    For imported articles, what currency should the payment normally be made in?

    <p>In the currency of the country of origin or a widely used international currency</p> Signup and view all the answers

    Which organization is responsible for revising the items reserved for small scale sector purchases?

    <p>Railway Board</p> Signup and view all the answers

    What should be done regarding items requiring special import according to the directives provided?

    <p>Payment should be made in the currency of the country of origin.</p> Signup and view all the answers

    What directive governs the purchase price preference associated with Public Sector Undertakings?

    <p>Guidelines issued by the Ministry of Industry</p> Signup and view all the answers

    For articles requiring import, which expense must be paid in Indian currency?

    <p>Agency commission incurred in India</p> Signup and view all the answers

    What must be provided to claim advance payment when making payments against shipping documents?

    <p>Documentary evidence of inspection prior to despatch</p> Signup and view all the answers

    In what circumstance can advance payment be made to firms before the delivery of stores?

    <p>If the firm is of repute and commercial standing, with prior inspection</p> Signup and view all the answers

    Which of the following measures is NOT recommended for ensuring economic purchase when inviting tenders?

    <p>Inviting tenders only from domestic suppliers</p> Signup and view all the answers

    Who is responsible for the discretion to invite tenders from abroad according to the guidelines?

    <p>The General Manager</p> Signup and view all the answers

    What is required if a prior inspection of imported articles is not possible?

    <p>A bank guarantee for the payment amount</p> Signup and view all the answers

    To ensure adequate publicity for tenders, which publication is regarded as the standard medium in India?

    <p>The Indian Trades Journal</p> Signup and view all the answers

    What action should be taken if tender responses are insufficient?

    <p>Extend the deadline for submission of tenders</p> Signup and view all the answers

    What may be utilized for additional publicity when inviting tenders from abroad?

    <p>Agencies of Indian Embassies abroad</p> Signup and view all the answers

    Which of the following statements is incorrect regarding the tender process?

    <p>General Managers have unlimited discretion in inviting tenders.</p> Signup and view all the answers

    What is one of the requirements for inviting tenders according to the guidelines?

    <p>Tender documents, specifications, and drawings should be sent to interested parties</p> Signup and view all the answers

    What should be done if the invitation to tender receives a poor response?

    <p>Renew the invitation and enhance publicity</p> Signup and view all the answers

    When evaluating offers involving foreign currency payments, what must be done with the offers?

    <p>Convert them into local currency at the official rate</p> Signup and view all the answers

    What information must tenderers provide regarding the materials used?

    <p>Country of manufacture or origin of materials</p> Signup and view all the answers

    When specifying the point or place of delivery, what is the aim?

    <p>To give all tenderers equal opportunities for pricing</p> Signup and view all the answers

    For articles needing import, how should contracts be typically finalized?

    <p>On Free on Board (FOB) or Free Alongside Ship (FAS) basis</p> Signup and view all the answers

    What should be considered when the purchases are financed through foreign loans?

    <p>Terms and conditions of the loan or agreement</p> Signup and view all the answers

    What factors may justify imports under different basis terms such as CFR or CIF?

    <p>Specific circumstances or cases</p> Signup and view all the answers

    How should adequate time for submission of tenders be determined?

    <p>In light of the complexity of the items specified</p> Signup and view all the answers

    What must be done if imports are required but the usual inspection is not feasible?

    <p>Seek an alternative inspection methodology</p> Signup and view all the answers

    Study Notes

    Purchase of Stores: Policy and Rules

    • Four sources of supply for railway materials: Purchases, railway workshops, returned stores, and transfer from other railways/departments
    • Purchases are the most important source, aligned with government policy encouraging Indian industries
    • Order of preference for purchases:
      • Firstly, articles produced in India from Indian raw materials.
      • Secondly, articles partially or wholly manufactured in India from imported materials.
      • Thirdly, articles of foreign manufacture held in stock in India.
      • Fourthly, articles manufactured abroad requiring import.
    • Quality: Quality must be sufficiently good for the purpose, and for category three, the condition is that the articles are of suitable type and requisite quality.
    • Articles from the first two categories should be accepted unless their quality is demonstrably substandard, even if imported articles are higher quality
    • Railway Board letter no. 95/RS(G)/768 dated 17.08.1995, and Ministry of Finance S.O.M no. F. 23 (2) –E.II(A)/92 dated 24.6.92, and Railway Board's Letter No. 95/RS(G)/768 dt 17.08.1995 are relevant documents.
    • Price preference for products of small scale industries:
      • Items reserved for exclusive purchase from KVIC/Women's Development Corporations/Small Scale Sectors Units (409 items currently )
      • Subject to revision by Railway Board
      • Guidelines by the Department of Supply, Government of India
      • Other items not so reserved

    Currency of Payment

    • Payment for most Indian Railway purchases should be made in Indian rupees.
    • Imported items may be paid for in the currency of origin or a widely used international currency
    • Agency commissions (if any) should be paid in Indian rupees.

    Payment

    • Full payment should be made after stores delivery, inspection, and satisfaction.
    • Advance payment may be permitted in specific cases with security and inspected shipment.

    Publicity and Tenders

    • Tenders should be invited in India and abroad if needed for economic purchase.
    • The Indian Trades Journal is the primary medium for public advertisements in India. Other publications may be used at the discretion of the Purchasing Officer.
    • Embassies/Trade Commissioners in other countries can be utilized for additional publicity.
    • Tenders should be invited to accommodate enough time for submissions
    • Financial aid conditions should be considered if applicable (foreign loans)

    Country of Manufacture

    • Tenderers should reveal the country of origin/manufacture of materials.

    Evaluation of Offers/Payment in Foreign Currency

    • Offers involving foreign currency payments are converted to Indian rupees at the official rate for comparison..

    Place of Delivery

    • Delivery terms should provide equal opportunities for competitive pricing
    • Import contracts should often be finalized on an F.O.B./F.A.S. basis (Free on Board/Free Alongside Ship).
    • Other bases (C.F.R. / C.I.F.) might be used if appropriate.

    Price Preference for Early Delivery

    • Higher quotations for earlier delivery are prioritized
    • Contractors are liable for the difference between their contracted rate and that of the lowest acceptable tender, including associated costs, for any failure to meet early delivery dates..

    Indian Agents for Tenderers Abroad

    • Tenderers should specify Indian agents (if applicable including extent of authority, commission payable, and currency)

    Tendering Methods (Open, Limited, Single)

    • Open tenders are used for a general procurement approach and can be used if the estimated value exceeds Rs. 10 lakhs and/ or Rs 2 crores, for safety items, emergencies or if the vendors' list is issued by a centralized body.
    • Limited tenders are primarily used for items with an estimated value up to Rs. 10 Lakhs (or 2 Crores in certain regulated cases) and only certain qualified suppliers are allowed to bid
    • Single tenders are used for orders not exceeding either 3 Lakhs (non-proprietary) or 5 lakhs (proprietary) for specific circumstances.
    • Procedures must respect all rules for proper tendering

    Classes of Tenders

    • By advertisement, by direct invitation, or by invitation to one designated firm
    • Tenders should be given very serious consideration, where applicable as a method to lower procurement prices

    Additional Points

    • If there is poor response to tender invitations, new invitations should be issued.
    • Inspection of delivered items (whether manufactured in India or abroad) to ensure compliance with specifications is required.
    • If necessary, specialized institutions (such as RDSO, RI&TS, or DGS&D) can be utilized for inspection
    • Appropriate nomenclature should be used in invitations for tenders
    • If needed, contracts can be split between several firms to accommodate their capabilities

    Tender Committee & Powers of Stores Officers

    • Each tender value range has specific relevant authority level for acceptance (e.g., JAG / SAG / PHOD/CHOD/AGM/GM) for approval.

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    Description

    Explore the essential policies and rules governing the purchase of railway materials. This quiz covers the sources of supply, order of preference for purchases, and quality standards set forth by the Railway Board. Test your knowledge on how Indian industries are prioritized in procurement processes.

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