Financial Rules for Purchase of Stores

1
Financial Rules for Purchase of Stores

• Stores generally applies to all articles and
  materials purchased e.g., Plant Machinery,
  Instruments, Furniture, Equipment, Fixtures,
  etc., but not Books/Publications/ Periodicals
  required in library.
• Allocation of funds/source of funds to be
  ensured.
• Approval of Funding Body in case of sponsored
  Research Projects.
• Plant Machinery etc., can also be obtained from
  firms registered with or approved by DGSD.

2
Rules Instructions Governing the Purchase of
Stores

• Purchases shall be made in most economical
  manner.
• Periodical indents be prepared.
• Scale of consumption be laid down/ approved.
• Purchase orders shall not be split up to avoid
  necessary for obtaining the sanction of next
  higher authority.
• No price preferences to be given to domestic
  suppliers over the duty paid price of imports.

3
Calling Quotations

• Purchases up to Rs. 10,000/- no need of calling
  quotations.
• Purchases above Rs. 10,000/- to Rs. 50,000/-
  minimum three quotations.
• Purchases above Rs. 50,000/- to Rs. 5.00 lakhs
  minimum six quotations should be called for from
  reputed/regular dealers. Proposals should be
  raised with the recommendations of the Purchase
  Committee.
• Purchases above Rs. 5.00 lakhs newspaper
  advertisement and on University Website.

4
Open Tender System
5
Single Tender / Proprietary

• Indenter is sure that only on particular firm is
  the manufacturer.
• No other make / model is suited.
• Upgradation / spares comes under this category.
• Justification is to be given
• Proprietary Certificate
• (a) Item is solely manufactured by a
• single manufacturer.
• (b) No other make or model is suitable for
  the
• following reasons.

6
Rate Contractors

• They should be used for stationery, chemicals,
  consumables, furniture, computers, etc. i.e.,
  which are in the nature of common use and
  frequently needed by the Departments.
• Rate contract may be concluded by the University
  or any other enlisted approved organization like
  DGS D.

7
Limited Tenders

• May be adopted for value of goods up to Rs. 5.00
  lakhs.
• Copy of the bidding document is to be sent by
  courier / UCP.
• Notice is also to be placed in University
  Website.
• Source of supplies are definitely known.
• Fresh sources of getting quotations (or) chances
  are rare or remote
• Urgency.

8
Repeat Orders

• Repeat order may be placed within 3 months from
  the date of original purchase order.
• To ensure that there is no downward trend in the
  price, no change in the tax structure.

9
Delegation of Financial Powers
10
Delegation of Financial Powers at Research
Centres level
11
Safeguards for the purchases

• Scope of the supply
• Technical Specifications
• Payment Terms
• (a) 90 and 10
• (b) Discounts offered
• Delivery period
• Warranty Clause
• Local purchases
• Foreign Purchases (FOB / CIF Value)
• (a) Letter of
  Credit/T.T./F.D.D.
• (b) Clearing charges
• (c) Bank Charges outside the
  country
• (d) Agency Commission
• Validity of Quotations
• Agreement Clause
• Performance Bank Guarantee
• Liquidated Damages Clause
• Arbitration Clause
• Late Bids

12
Bidding Document / Notice of Inviting Quotations

• Scope of the work
• Specifications Technical details
• Price schedule
• Taxes / Discounts
• Excise Duty / Customs Duty Exemptions
• CST/VAT
• Commercial conditions
• General conditions
• Agreement Clause
• Warranty / Post Warranty
• Delivery Period
• Bank Guarantee Form
• Security Deposit (2 to 5)

13
File for purchase proposal should contain

• 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 case of
  two-bid system).
• Comparative Statement(s) pre-negotiation and
  post-negotiation, signed by the proposed on each
  statement.
• Purchase proposal in the prescribed format (New),
  duly obtaining the signatures of the Purchase
  Committee members (wherever required).

14
Special Items

• Inprinciple approval of V.C. / P.V.C. is
  required
• Budget Non-Plan Development Funds only
• (a) Furniture items beyond Rs. 10,000/-
• (b) A.Cs.
• (c) Laptop
• (d) Digital Video Cameras

15
Precautions in award of contracts

• Price justification
• Lack of competition or cartel formation
• Negotiations only to be held with (L1)
• High rate tenders EMD should be adequate
• No post award amendments
• No changes in financial terms
• Agreements concluded should be legally
  enforceable in court of law.
• Files should be neatly stitched or bounded to
  avoid no interpolation no tampering.
• Wherever Bank Guarantee given their validity
  should be for sufficient period.

16
Shortcomings noticed by the Finance

• Original Quotations not enclosed
• Enquiry letter not enclosed
• Notice inviting quotations not enclosed
• The method of inviting quotations are not
  mentioned
• Adequate time for submission of quotations are
  not given (Min. 21 days)
• The standard proforma given in the purchase
  procedure at pg 21 not used.
• Comparative statements not signed. (Technical
  Commercial separately)
• Purchase Committee signatures not obtained.
• The bifurcation of prices viz basic price, taxes,
  duties to be shown separately.

17
Documents required for opening Letter of Credit /
Telegraphic Transfer

• Copy of the purchase proposal approved by the
  Competent Authority.
• Copy of the Purchase Order.
• Order Acknowledgement.
• Proforma invoice containing the terms and
  conditions.
• Form A1 / A2.
• Letter addressed to the S.B.I., Hyderabad, in the
  prescribed form. It will however be signed by the
  Finance Officer Blank form 5 copies.
• Copy of the Agreement (wherever applicable).
• L.C. Guarantee Form.
• Copy Bank Guarantee (wherever applicable).
• Now system is centralized. SBI HCU Branch will
  coordinate w.e.f. 1-4-2008

18
Bill for Temporary Advances should contain

• Nature of emergent purpose.
• Approval of the Competent Authority.
• Breakup details of anticipated expenditure.
• Budget details.
• Period by which the amount will be spent.
• Submitting Adjustment Bill with original invoice
  D.C.
• Please make stock entries / endorse certificate
  on reverse of invoice wherever necessary.

19
Bill for Misc. Advances should contain

• Proforma Invoice.
• Copy of the Purchase Order.
• Copy of the note approved by the Competent
  Authority.
• Budget head is indicated at appropriate place.
• Please submit original invoice delivery challan
  with adjustment bill.
• Make stock entry / Asset entry.

20
Action on Outstanding Temporary Advances

• If the adjustment bill is not forthcoming with in
  a month, a reminder will be sent by finance to
  adjust bill with in a week time.
• If no adjustment bill is forthcoming, the amount
  of temporary advance will be recovered with penal
  interest without further intimation after 3
  months of the drawal of advance.

21
Payments in Foreign Currency

• Up to the Financial Powers vested with HoD / Dean
• Beyond this limit PVC / VC approval is required.
• Library up to US 5000 as per Library Committee
  approval.
• Payment by credit card up to Rs. 50,000 (Deans)
  Rs. 30,000 (PIs).
• Purpose Subscription to journals
• - Membership fees of
  Academic Society
• - Conference Registration
• - Books

22
Vigilance Guidelines / norms
23
Conferences

• A separate bank account has been opened for
  monitoring of Conference Account.
• The budget for the conference should be first
  approved by the Competent Authority.
• Advance bill will be cleared sufficiently in
  advance before the commencement of the
  conference,
• Adjustment bill should be submitted within a
  month after the event.
• All receipts for the conference (received from
  different funding bodies) would be credited to
  the conference account.
• The expenditures related to conference would be
  cleared and debited to the same conference
  account.
• Utilization Certificate for each funding body
  would be issued separately.
• Unspent balance in the conference account would
  be credited to central conference account.