The purchases made in different set-ups, whether in the Government or in the Public sector both Central/State, Municipal Corporations etc. are deemed as Government purchases. The total procurement by these entities gross up to Rs. 4,50,000 crores per annum i.e. 30 % of India’s Gross Domestic Product (GDP). The Public Sector both Central and State Units form a sizeable chunk of share in Government purchases. Of late a number of Govt. Organizations have been converted into PSU’s/Corporations/Autonomous Organizations, which has further added their share of Purchases.

The law recognizes Government as a model purchaser, and therefore places a higher responsibility on all those who are associated with it, and does expect that due care shall be exercised by all, in safeguarding the Government interests, while discharging their duties, and at the same time laying emphasis on the transparency aspect as well.

While dealing with the suppliers, particularly the large number of Small Scale Industries, who often find themselves highly vulnerable, because of lack of infrastructure, and understanding of the laws, rules and the procedures relating to the Tendering and Contracting?

The purchasing therefore lays more emphasis, on the Government officers, not only to equip themselves, and their staff with the provision of applicable laws of the land, they may have to guide the suppliers as well, so that it results in proper understanding of the various laws as applicable to the Contract, their implications, leading to timely execution of the contract, leading to acceptable supply of stores, off course at competitive prices.

The accountability of the Government Purchasers is many fold, besides being accountable to the administrative ministries, the board of directors – in case of public sector, but also to different outside agencies like the public accounts committee, the CAG, the CVC etc. This does not leave enough scope for individual initiatives. The system has in built disincentives for taking decisions. At times the Executive becomes a prisoner of procedures, rather than an achiever of purpose.

Not withstanding the above, the salient features as indicated below, need to be properly noted and if strictly followed, shall lead to cost effective purchases – The concepts below even though may appear to be elementary, but are essential, and deemed as Good Practices: –

• The terms and conditions that are to govern the purchases, should be readily assessable, be simple so that they are easily and uniformly understood by one and all.

• A brief knowledge of the applicable laws of the land – like the sale of goods act, the contract act, the various tax laws, the interest on delayed payments act, the limitation act and the Arbitration and Conciliation Act etc. The detailed acts should be readily available for reference as and when required.

• The tender specifications have to be clear, supported by the relevant drawings and the specification. In case of items of general nature, the relevant BIS specification should be found and incorporated. If for some reasons the same is not possible, then the available reputed brands have to be short-listed. All of these have to be processed as far as possibly directly from the manufacturers, or their authorized outlets, so as to avoid duplication/fraudulent purchases.

• The basis or the manner in which the tender (s) would be settled should be laid down in the tender itself. The settlement has to be done within the original validity and within the reasonable time.

• The sanctity of the tendering system has to be maintained. Avoid re-invitation of Tenders.

• Post tender correspondence should be generally avoided, as it generally leads to delays, and at times results in changing of the inter-see position due to tax structures or discounts.

• There should be no unusual conditions, like approval of sample before bulk supply, or modification to the specification midway, which has implications on the price structure & are do not lead to legally enforceable contracts