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OVERVIEW ON GFR-2005

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Title: OVERVIEW ON GFR-2005


1
1
NATIONAL SUMMIT ON PUBLIC PROCUREMENT
OVERVIEW ON GFR-2005
Presentation by G A R Rao, Director (Finance)
Mazagon Dock LTD.
2
EVOLUTIONARY PROCESS OF GENERAL FINANCIAL RULES
2
  • 1947 IN THE FORM OF EXECUTIVE INSTRUCTIONS
  • 1963 THE COMPENDIUM OF EXECUTIVE INSTRUCTION
    MODIFIED AND GENERAL FINANCIAL RULES,
    1963 WERE ISSUED.
  • 1963 JUN 05 GFR. 1963 SUPPLEMENTED BY GOVT. OF
    INDIA DECISIONS.TASK FORCE SET UP TO
    RECAST THE RULES, SINCE SOME OFTHESE HAD
    BECOME REDUNDANT.
  • JUL 2005 RULES RECAST AND ISSUED IN THE FORM
    OF GFR 2005.

3
THE TOPICS COVERED IN G.F.R. 2005 ARE SHOWN BELOW
Relevant for Material Managers Chapter
6 Procurement of Goods and Services
  • Chapter 1 Introduction

Chapter 2 General System Of Financial Management
Chapter 3 Budget formulation and implementation
Chapter 4 Government Accounts
Chapter 5 Works
Chapter 6 Procurement of Goods and Services
Chapter 7 Inventory Management
Chapter 8 Contract Management
Chapter 9 Grants-in-Aid and Loans
Chapter 10 Budgeting and Accounting for
Externally Aided Projects
Chapter 11 Government Guarantees
Chapter 12 Miscellaneous Subjects
4
GENERAL FINANCIAL RULES, 2005
4
  • Fundamental principles of Public Buying (Rule 137)

Every authority delegated with the financial
powers of procuring goods in public interest
shall have the responsibility and
accountability to bring Efficiency,Economy and
Transparency in matters relating to Public
procurement and for fair and equitable
treatment of suppliers and promotion of
competition in public procurement.
5
FUNDAMENTAL PRINCIPLES OF PUBLIC BUYING(RULE 137)
5
  • The specification in terms of quality,type etc
    .,as also quantity of goods.
  • Remove superfluous and non-essential
    features,which may
  • result in unwarranted expenditure.
  • Fair,transparent and reasonable procedure.
  • Get satisfied that the selected offer
    adequately meets the
  • requirement in all respects.
  • Offer is reasonable and consistent with the
    quality required.
  • Concerned procuring authority must place on
    record, in precise
  • terms,the considerations which weighed with
    it while taking
  • the procurement decision.

6
6
FUNDAMENTAL PRINCIPLES OF PUBLIC BUYING
RESPONSIBILITY AND ACCOUNTABILITY TO BRING
  • EFFICIENCY
  • ECONOMY
  • TRANSPARENCY
  • PROMOTION OF COMPETITION
  • FAIR AND EQUITABLE TREATMENT OF SUPPLIERS
  • RECORD THE CONSIDERATIONS FOR THE DECISION

7
POWER FOR PROCUREMENT OF GOODSRule 140
7
GFR
Equivalent Procedure in MDL
  • The ministries or departments have been
    delegated full powers to make their own
    arrangement for procurement of Goods
  • DGS D
  • Delegation of Powers for CFA
  • Board of Directors
  • Procurement SubCommittee(PSC)
  • CMD
  • Functional Director
  • GGM,GM to the level of Manager

8
REGISTRATION OF SUPPLIERS(SRR Dept) Rule 142
8
GFR
Equivalent Procedure in MDL
  • Eligible Capable suppliers Credentials
    verification.
  • - Mfg. Capabilities
  • - Quality Control System
  • - Past Performance
  • - After Sales Service
  • - Financial Background
  • Item-wise list of suppliers
  • Registered for fixed period between(1-3 years)
    Suppliers willing to continue will have to apply
    for renewal.
  • Vendor Rating
  • -Mfg. Capabilities
  • -Quality Control System
  • -Past Performance
  • After Sales Service
  • - Financial Background
  • Documents as per statutory requirement
  • Site visits
  • Product wise list of , Permanent and Temporary
    supplier

Permanent vendors registered for 3 Yrs Suppliers
willing to continue will have to apply for
re-registration.
  • Vendor Rating is done on basis of
  • Quality, Delivery, Services
  • Where gt80 is Very good
  • lt 40 is Unsatisfactory
  • Yearly Vendors Meet

9
PURCHASE OF GOODS WITHOUT TENDERS
9
PURCHASE OF GOODS WITHOUT TENDERS
GFR
Equivalent procedure in MDL
  • Rule 145
  • Upto 15000/- on each occassion
  • (Certificate to be recorded by Competent
    authority)
  • Rule 146
  • gt 15000/- upto 1Lakh by 3 Members purchase
    committee
  • Rule 147
  • Purchase of goods directely under rate
    contract(DGSD)
  • Emergency Cash Purchase for Projects
  • up to 10000 per item/service for projects
  • Petty Cash Purchase
  • up to 20000 for petty miscellaneous items
  • Per purchase.

Delegated power upto 10 Lakhs
Items covered under DGSD
10
PURCHASE OF GOODS WITH TENDER
10
GFR
Equivalent Procedure in MDL
  • Rule 150
  • Advertised Tender Enquiry
  • Subject to exemptions incorporated
  • under Rules 151 and 154.
  • (for the value above 25L)
  • Rule 151
  • Limited Tender Enquiry.
  • (upto 25L)
  • No. of supplier more than Three
  • Rule 154
  • Single Tender Enquiry
  • Particular firm is the
  • manufacturer of required goods
  • In case of Emergency
  • Web Tender - 5L to 25L
  • Global/Press Tender- gt 25L

Upto 5L No of Supplier more than Five.
  • Items Proprietery in nature (PAC)
  • Customer instruction/Requirement
  • Emergency Tender Exigency due to operational
    or technical requirements
  • CMDgt 25L DirectorUp to 25L
  • Enquiry by Fax/E-mail/Courier/Speed Post
  • TEF with essential conditions only.

11
CONTENTS OF BID DOCUMENT RULE 155
11
GFR
Equivalent Procedure in MDL
  • Instruction to Bidders
  • Condition of Contract
  • Schedule of Requirement
  • Specification and allied technical.
  • Price schedule
  • Contract form
  • Other standard form if any.
  • Tender enquiry form(TEF)
  • Detail scope of supplies/work specification
    including InspQA requirement.
  • Price bid format.
  • Standard terms and condition(STACS) along with
    acceptance form.
  • General terms and condition(GTC) along with
    acceptance form.
  • Shipping instruction
  • Statutory Requirement
  • Official Secret Act 1923 and Safety clause.
  • Format for BG,SD,RTGS/NEFT,LC, BID BOND ,BG for
    advance payment etc.

12
ADVANCE PAYMENT TO SUPPLIER RULE 159
12
GFR
Equivalent Procedure of MDL
  • Advance payment is demanded by supplier for
    maintenance contract
  • Advance payment is demanded by Firms against
    turnkey contracts/High value/Overseas supplies
  • Limit for Advance Payment
  • a) 30 to Private firm
  • b)40 State or Central Govt agency or PSU.
  • c)Maintenance Contract,Amt not exceeding the
    Amt. Payable for six months.
  • Upto 1Cr contract value - No advance payment.
  • gt 1Cr contract value 15 interest bearing
    (PLR2) against BG equivalent to the amount.

13
TRANPARENCY,COMPETITION,FAIRNESS AND ELIMIMNATION
OF ARBITRARINESS IN PROCUREMENT PROCESSRule 160
13
Equivalent Procedure in MDL
GFR
  • Bidding document to be self contained and
    comprehensive without any ambiguities
  • Criteria for eligibility and qualification
  • -Date ,place and time for sending/opening bids
  • -Terms of delivery
  • Suitable provision for settlement of dispute.
  • Reasonable time for sending bids.
  • The bids should be opened in public
  • The specification of required goods should be
    clearly stated without any ambiguity
  • .
  • Draft of tender enquiry approved by HOD(C)

Bid Rejection criteria is defined.
Date ,place and time for sending/opening bids
Terms of Delivery -Indian Free delivery at
MDL - Overseas FOB
Indian arbitration and conciliation act 1996
Press Tender 4 Wks,Web Tender 3 Wks Limited
2 Wks for local bidder , Emergency 1 Wk for
local bidder
Part III bids witnessed by the bidders
Technical specification prepared by Design
14
TRANPARENCY,COMPETITION,FAIRNESS AND ELIMIMNATION
OF ARBITRARINESS IN PROCUREMENT PROCESSRule 160
14
GFR
Equivalent Procedure in MDL
  • In case of turn-key projects pre-bid conference
    to be indicated in bid,for clarifying
    issues/doubts.
  • Criteria /Factors for evaluating the bids
  • Received bids to be evaluated as per bidding
    documents.
  • Bidders should not be allowed to alter/modify
    bids.
  • Negotiation in exceptional circumstances.
  • Contract should be awarded to lowest evaluated
    bidder
  • Pre Bid may be scheduled as an exception rather
    than a rule to avoid cartel formation.

Loading criteria towers deviation in delivery
, warranty payment terms are defined in bid
documents
Bid evaluated by designated technical Evaluation
Committee
Bidders cannot alter/modify bids.
Based on specific reason and beyond wide
variation in prices with approval of CFA
Lowest Technically qualified bidder
15
EFFICIENCY,ECONOMY AND ACCOUNTABILITY IN PUBLIC
PROCUREMENT SYSTEMRule 161
15
GFR
Equivalent procedure in MDL
  • Appropriate time frame of each stage of
    procurement should be prescribed to reduce delay.
  • Placement of contract with in original validity
    of bids
  • Rate contract system
  • Techno-commercial scrutiny- 4 Wks
  • Order Placement- 6 Wks after Techno-commercial
    clearance

Overall time frame within validity period
Coded items/Service/Maintenance Contract DGSD
contract with supplier consent
16
16
  • BUYER IN PRIVATE SECTOR
  • Principles of Confidentiality
  • Compliance with Statutory and Internal Audit
  • Responsible to mainly Share Holders
  • BUYER IN PUBLIC SECTOR
  • Transperacy ,Non Discrimination Equal
    Opportunity to all
  • Rule based,Compliance with Government Audit(CAG)
    in addition to Statutory and internal Audit.
  • Responsible to Public
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