Goal: Purchase of items/services/goods/equipments on project funds and institute funds.
Role and responsibilities of Purchase Committee:
Formulate a Purchase Procedure taking into consideration of small, medium and big expenditure utilizing either institute-fund or project grant funds.
Calling for quotations:
- Purchases up to Rs.25,000/- : without calling for quotations but after satisfying that the items purchased or services acquired are of requisite quality / specification and have been purchased from a reliable supplier at a reasonable cost.
- Purchases above Rs.25,000/- and up to Rs.100,000/- : Minimum 3 quotations are to be called for.
- Purchases above Rs.100,000/- and up to Rs.10.00 lakh: Notice inviting quotations should be sent to minimum 6 firms as far as practicable. Such quotations should be obtained either from the manufacturers directly or authorized dealers / distributors who are registered with the Commercial Tax Department of the respective State (for VAT purpose).
- Purchases above Rs.10.00 lakh/-: Quotations should be obtained by giving wide publicity in the local newspapers. (One or more news papers as situation may demand) in the classified column in respect of stores / consumables. In respect of scientific equipment and related items, tendering through websites system may also be resorted to in addition to news paper advertisement.
- Quotation, as far as possible, should be called for from the original manufacturers / principals / reputed and regular dealers only. In cases where quotations are obtained from the agents, a letter of authorization or dealership from the principal is required to be obtained.
- To ensure sound financial status, the manufacturer / suppliers are to be asked to mention in the quotation their valid Sales Tax / VAT / Service Tax / PAN registration references.
Opening of quotations and preparation of Comparative Statements
- As soon as the last date for receipt of quotations is over, each envelope containing the quotations should be initialed and serially numbered and then opened by the purchase proposer ( to be invited by purchase committee) in the presence of two to three members (depending upon the value of quotation) (preferably from the PC). The representatives of the firm may be allowed to be present on the specified date where substantial amount of Purchases is involved, say above Rs.25,00,000/-. Dated initials of all the members present while opening the quotations should be obtained on each page of the quotation duly high lighting the corrections if any, in the quotation.
- A Comparative Statement of the rates quoted by each firm is required to be prepared simultaneously. A list of quotations which are not considered for inclusion in the Comparative Statement is to be prepared duly recording the reason(s) for non inclusion.
Following precautions are required to be taken while preparing a comparative statement.
- Basic rate of each item and the taxes, insurance, freight etc., are required to be exhibited in the comparative statement. In case spares / attachments also are being purchased along with the main equipment, then separate column may be opened for these items.
- This would facilitate comparison. Wherever discount has been offered, it may be indicated under the total column with a view to arrive at the net cost quoted.
- Special conditions relating to payment, place of delivery of articles, time schedule for supply, warranty, any other charges etc., are required to be noted in the comparative statement. Monetary value of all the items is to be included when arriving at net cost quoted.
- The dated signatures of the officials preparing and checking the comparative statement are invariably required to be effaced on the comparative statement.
- Reasons / justification for rejecting the lowest quotations, if any, should also be recorded on the comparative statement.
- Late quotations (i.e. quotations received after the specified time of opening), delayed quotations (i.e. quotations received before the time of opening but after the due date and time of receipt of quotations) and post quotations offers, should not be considered.
- When the quotations are under examination, no other authority should be allowed to make queries or call for reports or exercise any sort of influence, as it is improper and would lead to delays in taking correct decisions.
- Validity of quotation should be sufficiently longer, say upto 60 days, so that the proposal can be processed without any need for seeking re-validation.
- From among those suppliers meeting all the specifications prescribed by us, the one who has quoted the lowest may be called for negotiation , if felt necessary
Documents required to be kept in any purchase proposal file:
A neatly arranged and prepared file (not loose sheets), serially numbered, may be opened, keeping the following documents therein:
- Notice inviting quotations / tenders and / or a report of survey conducted.
- Copy of in principle approval, if available
- Quotations / bids received (all in original)
- Report of the Technical committee (in the case of two-bid system).
- Comparative Statement(s) – pre-negotiation and post-negotiation, signed by the proposer on each
- Purchase Proposal in the prescribed format, duly obtaining the signatures of the PC members (wherever required)
Placing Purchase Orders:
- All proposals which require approval of the appropriate authorities (Heads of Department, Principal etc.) Empowered to sanction the expenditure, are required to be submitted to them duly complying the formalities
- As soon as approval of the appropriate authority is obtained for purchase of the articles etc from a particular firm, a purchase order should be placed on the firm duly specifying the terms & conditions of the institute of the quotation by the indenter. Acknowledgement of purchase order is to be obtained from the party. Each purchase order should be assigned a separate serial number in each financial year commencing from serial number one on 1st April and ending the last serial number on the 31st For this purpose a purchase Order Register should be maintained. Maintenance of a purchase Order Register is mandatory and Internal Audit should ensure about it. A review of pending purchase orders should be made periodically and necessary follow up action taken with the firms concerned for expediting the supplies.
- A copy of the purchase order/work order/service order may be sent to Bills Section / Projects Section as the case may be so that while admitting the bill for payment, they may be linked with the P.O. and make an endorsement as paid & cancelled. The unpaid P.Os will be reviewed at the end of 31st March and report given to Accounts Section quantifying the out standings to account for them as O/S Liabilities in the Balance Sheet.
- Receipt of the equipment etc, the indenting official shall take steps for installation and commissioning. Upon satisfactory commissioning, suitable entries in the Assets Registers (in respect of durable and long life items) or in the Stock Register (in respect of consumable items) shall be made. These details are required to be noted on the back side of the invoice / bill with proper attestation bearing full signature with date and stamp.
- As regards the purchase for Projects by the respective Project Investigators, a copy of the purchase order and invoice may be marked to the Head/Principal, so that the stock register is periodically updated by the School Office on receipt of the same.
- The F&A should send a copy of the cheque forwarding memo to the user department to update the Bills Register.