Plant & Machinery 1

Guide lines for procurement of Plant & Machinery GENERAL : THE ACTION TO PURCHASE OR REPLACE PLANT & MACHINERY IS OUTCOME OF ONGOING REVIEW OF MATCHING THE REQUIREMENT OF PRODUCTION CAPACITY WITH THAT AVAILABLE .THE PROCUREMENT ARE AIMED AT CREATION OF LONG TERM ASSETS AND FOLLOW A DEFINITE PROCESS OF ACQUISITION AND USE. INITIATION OF DEMAND: THE PLANT & MACHINERY ARE PROCURED IN ORDNANCE FACTORIES UNDER TWO HEADS NAMELY RR AND NC.

Guide lines for procurement of Plant & Machinery  THE RR MACHINES ARE PROCURED TO RENEW AND REPLACE OLD CAPACITIES OF THE FACTORIES AND THE NC PLANT AND MACHINERY ARE REQUIRED TO CREAT NEW CAPACITY OR AUGMENT THEM. THE PROCUREMENT OF PLANT & MACHINERY UNDER RR & NC HEADS IS AIMED AT ACCELERATING MODERNISATION OF ORDNANCE FACTORIES SO AS TO KEEP PACE WITH THE FAST CHANGING PRODUCT MIX AND INDUCTION OF NEW PRODUCTIVE TECHNOLOGIES. ALL INVESTMENT PROPOSALS FOR PROCUREMENT OF P&M ARE TO BE MADE BY RAISING DEMAND ON CASE TO CASE BASIS

DEPRECIATION • THE EXISTING MACHINES IN THE FACTORIES ARE DEPRECIATED AT SPECIFIED RATES TO RECOVER THE INVESTMENTS MADE FOR THEIR PROCUREMENT . WITH PASSAGE OF TIME THE RESIDUAL BOOK VALUE OF SUCH MACHINES BECOME ZERO, WHEN THEY BECOME DUE FOR REPLACEMENT. THE MACHINE WOULDALSO BE DUE FOR REPLACEMENT WHEN THEY ARE BEYOND ECONOMICAL REPAIR ON THE ASSESMENT OF MACHINE CONDITION AND RECOMMENDATION OF A TECHNICAL COMMITTEE.. THE LIFE OF PLANT AND MACHINERY WILL ALSO BE GUIDED BY THE CONSIDERATION IF THE MACHINE HAS BEEN OPERATED IN SINGLE OR DOUBLE SHIFTS, WHETHER IT IS A TOOL ROOM OR PRODUCTION MACHINE OR WHETHER IT IS A COMPUTER OR ORDINARY PRODUCTION EQUIPMENT.

P&M • THE NORMS OF DEPRECIATION ARE SUCH THAT AN UNIFORM DEPRECIATION RATE OF 5% OF THE COST OF THE EQUIPMENT PER YEAR IS CHARGED GENERALLY, WITH SOME NOTABLE EXCEPTIONS LIKE TOOL ROOM MACHINE ETC. FOR TOOL ROOM MACHINES A PROVISION IS MADE TO TRANSFER THEM TO PRODUCTION SHOPS AT THE END OF 10 YEARS IF THEY HAVE LOST THEIR ACCURACY.IT HAS BEEN DECIDED THAT THE RATE OF DEPRICIATION FOR ELECTRONIC EXCHANGES AND THEIR COMPONENTS ARE TO 10 HAVE LIFE OF 15 YEARS FOR PBX EXCHANGES YEARS FOR PABX EXCHANGES, 25 YRS FOR FAX EQUIPMENT,10YRS FOR TELEPHONE EQUIPMENT

P&M • (a) THE VEHICLES WILL BE DUE FOR REPLACEMENT AFTER A MINIMUM MILAGE LIMIT OR MINIMUM YEARS OF SERVICE, WHICHEVER IS LATTER. • (b) THE BOARD, CONSISTING OF DY. GM AND REPRESENTATIVE OF LOCAL ACCOUNTS SHOULD AFTER THOROUGH TECH. EXAMINATION SENTENCE, IF SO DECIDED, AS BEYOND ECONOMIC REPAIR. THE VEHICLE WILL THEN BECOME DUE FOR REPLACEMENT. UNDER UNUSAL CONDITION, THE VEHICLE MAY ALSO BE PUT UP FOR PREMATURE CONDEMNATION AFTER A THOROUGH EXAMINATION BY TECH. COMMITTEE. • ( c ) THE MINIMUM VEHICLE MILAGE AND YEAR OF SERVICE ARE STIPULATED AS FOLLOWS:

P&M • • • • • •

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1. STAFF CAR, AMBULANCE, AND MOTOR CYCLE: 1,50,000 KMS OR 7 YEARS WHICH EVER IS LATER. 2. EXPLOSIVE WHEN AND AMMUNITION TRUCK: -DO3. JEEP, 1/1.5 T TRUCK VAN : -DO4. 3/5 T TRUCK, 7/7.5 T TRUCK : 1.8 LAKH KMS OR 7 YEARS WHICH EVER IS LATER. 5. TRACTOR, DUMPER : 22,000 HRS. OR 7 YRS WHICHEVER IS EARLIER. THE LIFE OF FIRE FIGHTING EQUIPMENT HAS BEEN FIXED AS 5000 STAIONARY OPERATION HOURS OR 10 YEARS WHICHEVER IS COMPLETED EARLIER. FOR ROAD VEHICLES EVERY 15 MILES IS EQUIVALENT TO ONE STATIONARY OPERATION HOUR. ON COMPUTERS THE DEPRECIATION IS AT THE RATE OF 15% PER ANNUM TAKING SEVEN YRS AS A LIFE OF THE EQUIPMENT. THIS ALSO APPLIES TO ALLIED PERSONEL COMPUTERS, PRINTERS,LASER JET PRINTERS, PLOTTERS ETC.

PERSPECTIVE PLANNING • EACH FACTORY WILL FINALISE ITS PERSPECTIVE PLAN FOR NEXT 5 TRS.(INACCORDANCE WITH THE 5 YR PLAN PERIOD) ON THE BASIS OF PROJECTION FROM USERS IN CASE OF END PRODUCT FACTORIES AND ON THE BASIS OF INTER FACTORY DEMANDS IN CASE OF COMPONENT MANUFACTURING FACTORIES. THE PERSPECTIVE PLAN OF THE FACTORY SHOULD BE IN CONONANCE WITH THE PERSPACTIVE PLAN OF OFB AND IN ACCORDANCE WITH THE GUIDE LINES ISSUED BY OFB FROM TIME TO TIME. • BASED ON THE PERSPACTIVE PRODUCTION LOAD

P&M • EACH FACTORY WILL PREPARE ANNUAL RR PLAN AND REQUIREMENT OF MACHINERY UNDER NC GRANT. • RR PLAN AND PFC APPROVAL: 2.4.1 FACTORIES WILL FORMULATE THEIR R PLAN ON ANNUAL BASIS AND FORWARD THE SAME DULY RECOMMENDED BY PFC/FY TO OFB ALONGWITH RR DEMAND FOR EACH ITEM COMPLETE IN ALL RESPECTS FOR CLEARANCE IN ONE GO. THE FOLLOWING POINTS ARE REQUIRED TO BE KEPT IN VIEW WHILE FINALISING THE RR PLAN. (1) COMPLETE LIST OF PLANT & MACHINERY AVAILABLE WITH THE FACTORY,

P&M (1) COMPLETE LIST OF PLANT & MACHINERY AVAILABLE WITH THE FACTORY,

THERE ORIGINAL COST AND YEAR OF PROCUREMENT . (ii) PHILOSOPHY/CONCEPTS RELATING TO INVESTMENT FOR REPLACEMENT. (iii) INTRODUCTION OF LATEST TECHNOLOGY THROUGH RR SCHEMES DUE TO CHANGE IN PRODUCT MIX (iv) SUSTAINED AND FUTURISTIC REQUIREMENT OF USERS (v) OUTSOURCING AND COST BENEFIT ANALYSIS (vi) UP-GRADATION OF TECHNOLOGY (vii) IMPROVEMENT IN PRODUCTIVITY AND QUALITY

P&M (viii) SAVING IN MATERIAL AND MAN POWER COST (ix) FLEXIBILTY THE ANNUAL REPLACEMENT PLAN AS PROPOSED WILL ENCLOSE PROFORMA A,B,C&D CONTAINING THE FOLLOWING DETAILS: (i) PROFORMA (A) IT WOULD CONSISTS OF REALISTIC ASSESMENT OF PREVIOUS PLAN APPROVALS STATING INERLIA THE CASH FLOW MATERIALISED AS WELL AS CASH FLOW ENVISAGED IN THE SUBSEQUENT YEARS. IT SHOULD CONTAIN ONLY THOSE MACHINES , WHICH HAVE BEEN CONSIDERED BY TECHNICAL BOARD OF EXAMINATION AND RECOMMENDED

RR & NC AS BER, DULY ACCEPTED BY GM. (ii) PROFORMA B: IT SHOULD CONTAINS ITEMS FOR REPLACEMENT, REFLECTED CLEARLY IN DESCRIPTION WITH REGISTRATION NUMBERS AND ESTIMATED COST. AFTER APPROVAL BY PFC/OFB, CHANGES ARE NOT ACCEPTABLE. THE RR PLAN SHOULD THEREFORE BE PREPARED WITH CARE. (iii) PROFORMA C: ADDITIONAL INFORMATION IN SUPPORT OF ITEMS PROJECTED IN PROFORMA B ARE REFLECTED HERE. (iv) PROFORMA D: BUDGET ALLOTMENT VISA VIS UTILISATION PATTERN FOR LAST THREE YEARS

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AGAINST RR GRANT MAY BE REFLECTED IN THIS PROFORMA.  2.4.3 EACH DEMAND UNDER RR PLAN TO BE SUBMITTED TO OFB FOR APPROVAL SHOULD ENCLOSE THE FOLLOWING DOCUMENTS: (iii) FORMAL BUDGETRY QUOTATION FROM POTENTIAL SUPPLIERS. (iv) DETAILS OF END USER ITEMS TO BE PRODUCED, WITH ANNUAL CAPACITY. (v) TIME CYCLE FOR EACH COMPONENT/END PRODUCT AFTER DISCUSSION WITH MACHINE TOOL SUPPLIER. (vi) BASED ON OUT TURN QTY. AND TIME CYCLE,

P&M NUMBER OF SUCH MACHINES ARE REQUIRED. (v) CONDEMNATION REPORTS DECLARING LIKE MACHINES BEYOND ECONOMICAL REPAIR. (vi) FACTORY’S TPC RECOMMENDATION GIVING MODE OF TENDERING AND POSPECTIVE LIST OF SUPPLIERS. (vii) DEMAND IN THE PRESCRIBED FORMAT DULY VETTED BY LAO. (viii) COST BENEFIT ANALYSIS IF EACH OF THE MACHINES EXCEED RS. 50 LAKH. (ix) DETAILED SPECIFICATIONS DRAWN OUT AFTER MARKET SURVEY SHOULD BE ENCLOSED IN THE RR DEMAND AT THE PFC STAGE. THERE SHOULD NORMALLY NO VARIATION IN SPECN., WHILE FLOATING THE TENDER ENQUIRY FROM THE ONE APPROVED IN PFC.  THE RR PLAN SUBMITTED BY THE FACTORY IN THE PRESCRIBED FORMAT AND SUPPORTED BY DEMANDS TOGETHER WITH CONNECTED DOCUMENTS WILL BE EXAMINED BY PLAN FINALISATION COMMITTEE (PFC)

P&M HEADED BY OPERATING MEMBER ASSOCIATING DDG/ENGG., DDG/OPERATING GROUP AND CONTROLLER OF FINANCE. PFC/OFB WILL EXAMINE THE RECOMMENDATIONS OF PFC/FACTORY AND ACCORD APPROVAL OF RR DEMANDS FOR ISSUE OF TENDER ENQUIRY BY FACTORY. THERE IS NO NECESSITY TO PROCESS RR DEMANDS SEPRATELY AT OFB. AGAINST APPROVED RR PLAN OF FACTORIES, GMS ARE AUTHORISED FOR DIRECT PURCHASE OF INDIGENEOUS PLANT AND MACHINERY WITHIN DELEGATED POWERS IN CONSULTATION WITHLAO. ALL MT VHICLES, COMPUTERS

P&M AND IT RELATED EQUIPMENT WILL NEED PRIOR SANCTION OF OFB. FOR PURCHASE OF MACHINES BEYOND DELEGAT POWERS OF GM, FACTORY WILL FLOAT TENDER ENQUIRY AS APPROVED BY PFC/OFB AND FORWARD ITS TEC RECOMMENDATION DULY ASSOCIATING LAO TO OFB. BASED ON TEC/OFB’S APPROVAL, FACTORY WILL OPEN THE PRICE BIDS AND FORWARD ITS TPC RECOMMENDATION FOR APPROVAL OF OFB. CERTAIN SANCTIONED POJECTS ARE SUPPORTED BY RR FUNDS BECAUSE A PART OR WHOLE OF THE PLANT & MACHINERY AGAINST THE PROJECT IS PROPOSED TO BE PROCURED IN REPLACEMENT OF EXISTING PLANT & TEC/OFB’S APPROVAL, FACTORY WILL OPEN THE PRICE BIDS AND FORWARD ITS TPC RECOMMENDATIONFOR APPROVAL OF OFB.

RR • CERTAIN SANCTIONED PROJECTS ARE SUPPORTED BY RR FUNDS BECAUSE A PART OR WHOLE OF THE PLANT & MACHINERY AGAINST THE PROJECT IS PROPOSED TO BE PROCURED IN REPLACEMENT OF EXISTING PLANT & MACHINERY. SUCH RR DEMANDS WILL NOT REQUIRE THYE APPROVAL OF PFC EVEN THOUGH THE FUND PROVISION THROUGH BUDGET WILL BE MADE CENTRALLY YEAR- WISE. • PRESENTALY, SPARES OF HIGH VALU OF P&M ARE BEING BOOKED UNDER LP STORES AND THEN CAPITALISED. IT IS RECOMMENDED THAT SPARE COST SHOULD POSSIBLY FIND A PLACE UNDER RR FUND.

NEW CAPITAL • PROCUREMENT OF PLANT & MACHINERYUNDER NEW CAPITAL IS MADE AGAINST (A) SANCTIONED PROJECT (B) NORMAL NC TO MEET CONTINGENT INESCAPABLE REQUIREMENT (i) CREATION OF ADDITIONAL CAPACITY TO CATER FOR SUSTAINED INCREASE IN PRODUCTION LOAD (ii) CREATION OF BALANCING CAPACITIES FOR NEW STORE (iii) MEETING SHORT FALL IN EXISTING CAPACIY (iv) STATUTORY OBLIGATION, IMPROVEMENT IN RELIABILITY/ QUALITY OF PRODUCT ETC. • SINCE PROCUREMENT UNDER NORMAL NC WILL ENHANCE THE CAPITAL ASSETS, A THROUGH REVIEW IS TO BE MADE FOR ASSESMENT OF CAPACITY BEFORE MOOTING OUT SUCH PROPOSALS. DUE CARE IS TO BE TAKEN TO RAISE SUCH DEMAND AND ADEQUATE JUSTIFICATION IS TO BE GIVEN IN A STATEMENT OF CASE CLARIFYING THE NECESSITY AND INESCAPABILITY OF THE EQUIPMENT. • DIRECT PURCHASE OF INDIGENOUS PLANT & MACHINERY UNDER NORMAL NC MAY BE RESORTED TO BY GM’SWITHIN THE DELEGATED POWERS AND IN

NC CONSULTATION WITH LAO. THE ABOVE PROCUREMENT WILL BE SUBJECT TO FOLLOWING LAID DOWN PROCEEDURES, CVC GUIDE LINES, EXISTING PROVISIONS OF FINANCIAL REGULATIONS AND ANNUAL BUDGET TO BE GIVEN BY THE BOARD AFTER APPROVAL OF MEMBER/PEDB.  BEYOND THE DELEGATED POWER OF GM, ALL NC DEMANDS IN THE PRESCRIBED FORMAT DULY VETTED BY LAO WILL BE FORWARDED TO OFB KEEPING THE POINTS IN VIEW AS MENTIONED IN PARA 2.4.1 (EXCEPT THE DETAILS SPECIFIC FOR RR PROPOSAL). SUCH NC DEMANDS SHOULD ALSO ENCLOSE THE REQUIRED DOCUMENTS AS MENTIONED UNDER PARA 2.4.3 (EXCEPT THOSE WHICH ARE RELEVANT FOR RR DEMANDS ONLY) FOR CLEARANC OF OPERATING DIVISION FROM NECESSARY ANGLE AND CONCURRENCE OF FINANCE DIVISION FROM EXPENDITURE PRIOR TO OBTAINING THE FINAL APPROVAL OF OPERATING MEMBER

NC ON RECEIPT OF OFB APPROVAL, FACTORY WILL FLOAT TENDER ENQUIRY AND FORWARD TEC/TPC RECOMMENDATION DULY ASSOCIATING LAO FOR SANCTION OF OFB AS IN THE CASE OF RR PROPOSALS.  NEW CAPITAL INVESTMENT IS ALSO REQUIRED FOR CREATION OF PROJECT CAPACITY FOR NEW STORES. FOR PLANT AND MACHINERY AGAINST SANCTIONED PROJECTS, PROCUREMENT IS CONTROLLED BY OFB AGAINST ITEM WISE LIST OF PLANT AND MACHINERY WITH ESTIMATED COST. DETAILED SPECIFICATIONS ARE FINALISED BY THE FACTORY. AGAINST THE APPROVAL LIST OF PLANT & MACHINERY UNDER ANY SANCTIONED PROJECT NO DEMAND IS REQUIRED TO BE RAISED.

NC OFB WILL PRIORTISE THE REQUIEMENT AND AUTHORISE GM FOR INITIATING PROCUREMENT ACTION. DIRECT PURCHASE OF PLANT & MACHINERY INCLUDED IN THE PROJECT SANCTION WILL BE MADE BY GM UNDER HIS DELEGATED POWER WITH THE OMNIBUS APPROVAL OF OFB. FOR PROCUREMENT OF PLANT AND MACHINERY BEYOND DELEGATED POWERS OF GM, THE FACTORY WILL FORWARD THE SPECIFICATION, ESTIMATED COST BASED ON THE LATEST BUDGETRY QUOTATION AND THE LIST OF PROSPECTIVE SUPPLIERS DULY RECOMMENDED BY FACTORY LEVEL TPC HEADED BY GM FOR APPROVAL OF CONCERNED MEMBER/OFB. THE PROCEEDURE FOR FLOATING OF TENDER ENQUIRY AND TEC/TPC PROPOSALS

NC WILL BE THE SAME AS IN THE CASE OF NORMAL NC PROCUREMENT. A TIME FRAME IS DRAWN UP FOR PROCUREMENT OF THE PROJECT MACHINES SO THAT THE PROJECT CAN BE IMPLEMENTED WITHIN THE SPECIFIED TIME FRAME. THE TIME FRAME WILL CONSISTS OF LEAD-TIME FOR CONTRACTING THE MACHINE, MANUFACTURE, INSPECTION, ERECTION AND COMMISSIONING. DEPENDING UPON THE SOURCE OF MACHINE AND TYPE OF THE MACHINE, THE LEAD-TIME VARIES, WHICH FINALLY CONTROLS THE PROJECT COMPLETION SCHEDULE. INCASE SIMILAR EQUIPMENT IS PROPOSED TO BE PROCURED FOR MORE THAN OFNE FACTORY,

NC

OFB MAY APPOINT A NODAL FACTORY FOR TAKING THE PROCUREMENT ACTION. IN SUCH CASES, THE NODEL FACTORY, AT THE ADVICE OF OFB, WILL FRAME THE SPECIFICATION AND SCOPE OF SUPPLY JOINTLY WITH THE OTHER INDENTING FACTORY(IES) AND ASSOCIATE THEIR REPRESENTATIVE(S) IN JOINT FACTORY LEVEL TEC/TPC FOR SENDING RECOMMENDATIONS TO OFB.

MINISTRY OF DEFENCE GUIDE LINES FOR PROCUREMENT OF PLANT AND MACHINERY • IT HAS BEEN LAID DOWN THAT THE INVESTMENTS BE CORRELATED TO KNOWN DEMAND OF THE USER SERVICES FOR NEXT FIVE TO TEN YEARS AND ENSURE THAT THERE IS EITHER CASH INFLOW DUE TO REPLACEMENT OF MACHINERY/PLANTS OR AVOID CASH OUTFLOWS DUE TO NON REPLACEMENTS. THE FOLLOWING ACTIVITIES ARE SUGGESTED: (i) EACH FACTORY SHOULD SUBMIT DETAILED FIVE YEAR INVESTMENT PLAN WITH YEARWISE CASH FLOW, TO OFB. (ii) EACH OPERATING DIVISION SHOULD

MOD P&M-2 CONSOLIDATE SUCH PLANS AND PREPARE A DIVISIONAL REPLACEMENT PLAN FOR FIVE YEARS WITH PROJECTED CASH OUT FLOW. (iii) PEDB DIVISION SHOULD SCRUTINISE AND CONSOLIDATE SUCH AGGREGATION OF DIVISIONAL PLANS AND PLAN TOTAL CASH OUTFLOW. (iv) RECOMMENDATIONS OF PEDB DIVISION ON PRIORITIES OF ITEMS DEPENDING UPON THE TOTAL FUND PROJECTIONS MADE IN OFB’S FIVE YEAR PLAN . (v) APPROVAL OF THE CONSOLIDATED LIST OF PLANTS AND MACHINERY BY O.F.B AFTER

MOD P& M-3 VETTING BY MEMBER (FINANCE). THE INDIVISUAL RR PROPOSAL SHOULD BE EXAMINED WITH A ZERO BASED ANALYSIS TO ASCERTAIN THE NECESSITY OF THE MACHINE TO BE PURCHASED, ITS TECHNOLOGICAL MERITS AND SUITABILITY, MANPOWE UTILISATION, COST CONTROL, DEPRECIATION AND ITS IMPACT ON PRODUCT COST, ENERGY CONSUMPTION ETC. IT HAS ALSO BEEN ADVISED BY SECRETARY (DP & S) AND NC INVESTMENT, (OTHER THAN PROJECT COSTS) SHOULD BE SUBJECTED TO EVEN MORE RIGROUS EXAMINATION THAN THAT IS NORMALLY DONE FOR RR CASES. WHILE EXAMINING THE NECESSITY THE ECONOMICS OF

MD P&M-4 OUTSOURCING THE PRODUCT MAY ALSO BE EXAMINED. THE NECESSITY AND CAPACITY CRITERIA REQUIRED TO BE EXAMINED ARE: (iii) DETAILS OF COMPONENTS/END PRODUCTS REQUIRED TO BE MANUFACTURED ALONGWITH ANNUAL CAPACITY. (iv) BASIS OF COMPUTING THE ANNUAL REQUIREMENT, VIS-À-VIS PRODUCTION PROGRAMME. (v) SCRUTINY OF THE PRODUCTION LOAD WITH REFERENCE TO THE PROJECTED DEMANDS FOR END PRODUCTS PLACED BY USER. (vi) CYCLE TIME DATA OBTAINED FROM MACHINE TOOL SUPPLIERS AND AVAILABLE LITRATURE.

MOD P&M-5

(V) DETAILED CALCULATION OF REQUIREMENT OF MACHINES BASED ON CYCLE TIMES AND REQUIRED ANNUAL OUT RUN. DOCUMENTS REQUIRED BY OFB FOR EXAMINING THE ABOVE ARE: (iii) THE REQUIREMENT IN THE FORM OF DEMAND FROM THE USER. (iv) VETTING OF THE DEMAND BY ASSOCIATE FINANCE/ACCOUNTS OFFICE. (v) CONDEMNATION REPORT DECLARING THE EXISTING MACHINE AS BEYOND ECONOMICAL REPAIR (RR CASES). (vi) ORIGINAL BOOK VALUE YEAR OF PURCHASE

MOD P & M-6 AND PRESENT BOOK VALUE OF THE EXISTING MACHINE, AS OBTAINED FIRM CAPITAL BLOCK REGISTER (FOR RR CASES) (ii) BUDGETARY OFFERS FROM SUPPLIERS AND POTENTIAL SUPPLIERS. (iii) FACTORY TPC RECOMMENDATION REGARDING MODE OF TENDERING AND LIST OF PROSPECTIVE SUPPLIERS. COST BENEFIT CRITERION: • THE COST BENEFIT APPRAISAL IN THE CASE OF MAJOR INVESTMENT INVOLVING PLANT AND MACHINERY WORK RS. 50 LAKHS OR MORE IS REQUIRED TO BE ASSESED AND DERIVED USING IRR (INTERNAL RATE OF RETURN)

MOD P& M-7 • THE IRR METHOD IS TO ASSESS THE GENERATED CASH INFLOW OVER THE YEARS, COMPARED WITH A CUT OFF/HURDLE RATE OF INTERNAL RATE OF RETURN. FOR ORDNANCE FACTORIES, A MINIMUM OUT OFF RATE OF RTURN OF 12% IS PRESCRIBED. THE RATE OF RETURN IS ASSESED NOT ONLY IN TERMS OF CASH INFLOWS BUT ALSO AVIDANCE OF CASH OUTFLOWS RESULTING FROM NON-REPLACEMENT OF SUCH MACHINERY. THERE COULD BE REASONS FOR TAKING UP PROJECTS WITH LESS THAN 12% IRR. SUCH REASONS SHOULD CLEARLY BROUGHT OUT WITH THE ASSESSED IRR.

MOD P & M-8 • PROJECTISATION OF HIGH VALUE OF PROCUREMENTS: INVESTMENT OF RS. 10 CRORES AND ABOVE SHOULD BE PROJECTISED. THE NECESSITY AND THE COST ESTIMATES SHOULD BE CONTAINED IN A PROJECT REPORT FOR SUCH INDIVIDUAL RR PROPOSALS. THESE SHOULD INCORPORATE REALISTICALLY ESTIMATED COSTS AND PDCs OF ACTIVITY MILESTONES BASED ON WHICH OFB MAY ACCORD ITS APPROVAL. • THE PROJECT SHOULD BE MONITORED BY OFB, ONCE APPROVED. COST OVERRUNS BEYOND 10% OF PROJECT COSTS AND TIME OVERRUNS BEYOND ONE YEAR SHOULD BE SPECIFICALLY EXAMINED BY OFB AND RESPOSIBILITIES

MOD P & M-9 • FIXED IF SUCH OVERUNS ARE DUE TO FAILURE IN EXECUTIVES OR INCORRECT ESTIMATION. • IT HAS ALSO BEEN ADVISED THAT HIERARCHY OF PROJECTS, THEIR RATES OF RETURN, PRIORITY ETC. MAY BE DECIDED IN THE FIRST YEAR OF THE PLAN ITSELF. • FINANCIAL APPRAISAL OF CAPITAL INVESTMENT: A CAPITAL INVESTMENT PROPOSAL WILL REQUIRE FINANCIAL APPRASAL WHICH WOULD INVOLVE THE FOLLOWING SEQUENCE OF STEPS: • (i) ESTIMATION OF THE INITIAL CAPITAL INVESTMENT AND THE TIMING OF CASH OUTFLOW.

MOD P & M -10 (i) (ii) (iii) (iv) (v)

ESTIMATION OF THE PRODUCTION LEVEL AT THE TIME OF FULL PRODUCTION. ESTIMATION OF FUTURE CASH OUTFLOWS CONSIDERING VARIOUS PRODUCTION FACTORS. ESTIMATION OF FUTURE INFLOWS BASED ON THE ESTIMATED VOLUME OF PRODUCTION AND PRICES ETC. WORKING OUT THE NET IN FLOWS. EVALUATION OF THE PROPOSAL BASED ON ACCEPTED FINANCIAL EVALUATION TECHNIQUES LIKE IRR ETC.

FRAMING OF SPECIFICATION • GENERAL: • AN IMPORTANT ACTIVITY IN THE PROCUREMENT OF PLANT AND MACHINERY IS FRAMING OF SPECIFICATIONS. THIS INCLUDES ACTIVITIES RELATED TO IDENTIFYING THE OUTPUT REQUIRED FROM THE EQUIPMENT IN QUANTITY, CHARACTERSTICSFEATURES AND QUALITY OF PRODUCT.THE SPECIFICATIONS WOULD INDICATE THE SIZE OF THE EQUIPMENT, POWER CONSUMPTION, SERVICE REQUIREMENT, TYPE OF AUXILIARIES, NATURE OF EFFLUENTS DISCHRGED, COMPLIANCE TO LOCAL STATUORY REGULATIONS ETC. THE CODES AND STANDARDS OF ENGINEERING PRACTICES APPLICABLE

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INTERNATIONALLY, NATIONALLY AND THOSE REQUIRED SPECIALLY FOR OFB REUIREMENTS ALSO WOULD BE SPECIFIED. THE GENERAL CONDITIONS AS OBTAINING IN THE ORGANISATION WOULD BE HIGHLIGHTED IN THE TENDERING STAGE SO THAT INTENDING BIDDERS COULD OFFER CONFORMANCE AT THE INITIAL BID ITSELF. • OUTLINES OF A SPECIFICATION: • KEEPING THE ABOVE REQUIREMENTS IN VIEW, THE FOLLOWING PARAMETERS ARE REQUIRED TO BE CLEARLY DEFINED WHILE FRAMING SPECIFICATION FOR P&M: (iv) CLEAR TECH. REQUIREMENTS. (a) SPECIFICATIONS ARE TO BE BROAD BASED MENTIONING THE POINTS WHERE NO DEEVIATION IS PERMITTED WITH ASTERISK.

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(b) THE SPECIFICATION IN GENERAL SHOULD ALSO BE MENTION THE END PRODUCT REQUIREMENT TAKING INTO ACCOUNT THE FLEXIBILY REQUIRED FOR FUTURE OPTIONS, UNLESS PROPRIETARY ARTICLE CERTIFICATION CAN BE JUSTIFIED FROM END USE CONSIDERATION, COPYING A MACHINERY CATALOGUE FOR SPECIFICATION MUST BE AVOIDED. THE SPECIFICATION SHOULD TAKE INTO ACCOUNT LATEST TECHNOLOGICAL ADVANCEMENT. (ii) RESPONSIBILITIES OF THE PURCHASER AND THE SELLER SHOULD BE UNABIGUOUSLY DEFINED. (iii) AVAILABILITY OF WATER, AIR AND POWER AND OTHER SERVICES AND THEIR QUALITY.

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(iv) BATTERY LIMITS:THIS WILL INCLUDE SUPPLY OF WATER AT THE INLET TO THE MACHINE AT A SPECIFIED POINT, STEAM SUPPLY AT A PRESPECIFIED POINT, POWER AT A POINT REQUIRED- NORMALLY AT THE CONTROLPANEL, VENT/EXAUST PIPING, SUPPLY OF AIR OF REQUIRED QUALITY AT A MUTUALLY AGREED POINT. (ii) TERMS AND CONDITIONS OF SUPPLY OF MATERIALS, SYSTEMS AND SUB SYSTEM WISE. (iii) DOCUMENTATION: REQUIRED TO ACCOMPANY THE QUOTATION, AND TO BE SUBMITTED SUBSEQUENT TO CONTRACT, WITH TIME SCHEDULE SHOULD BE LAID DOWN.

F SP 5

(vii) PREDESPATCH INSPECTION CRITERIAN MUST BE LAID DOWN, (a) CRITERIA OF ACCEPTANCE SUCH AS MACHINE GEOMETRICAL ACCURACY, PROCESS CAPABILITY AND COMPONENT ACCURACY TO BE DEFINED. (b) TRIALS OF MACHINE INCLUDING SUPPLY OF TRIAL COMPONENTS AND THE POSITIONING ETC HAS TO BE STIPULATED. (C ) REQUIREMENT OF STAGE INSPECTION OF MACHINE DURING ASSEMBLY, IF ANY MAY BE SPECIFIED. (viii) TOOL REQUIREMENTS DURING TRIALS AND DRAWINGS FOR FUTURE USE MAY BE ASKED FOR (ix) TIME TABLE FOR RECEIPT OF DRAWINGS, SPECIALLY

F SP 6 IF ERECTION IS CONSIGNEE’S RESPONSIBILITY. (x) PACKAGING INSTRUCTIONS FOR DESPATCH SHOULD BE LAID DOWN (xi) ERECTION RESPONSIBILITY AND SITE CONDITIONS. (xii) SUPPLY OF TOOLS AND TACKELS DURING ERECTION AND COMMISSIONING. (xiii) WORKING AND NON WORKING SPACE FOR CONTRACTOR’S PERSONNEL, ENGAGED FOR ERECTION AND COMMISSIONING. (xiv) POST DESPATCH TRIAL/INSPECTION: ACCEPTANCE CRITERIA INDICATING PERIOD FOR TRIAL, QUALITY AND QUANTITY OF OUTPUT, MACHINE EFFICIENCY AND HOW AND WHEN THESE TESTS WOULD BE CARRIED OUT SHOULD BE CLEARLY INDICATEDTHE FACTORS WHICH WILL BE CONSIDERED FOR CALCULATING THE MACHINE EFFICIENCY SHOULD BE CLEARLY SPECIFIED.

F SP (xv) COMMISSIONING

RESPONSIBILIES AND CHARGES

THEROF. (XVI) DEPLOYMENT OF WORKMEN: THEIR QUALIFICATION AND NUBER AS NEEDED FOR SUCH ACCEPTANCE TESTS, UNDER THE SUPERVISION OF THE CONTRACTOR, MAY BE DECIDED IN ADVANCE . (XVII) WORKING HOURS AND SECURITY RESTRICTIONS ETC. (XVIII) SPARE PARTS REQUIREMENTS FOR THE PLANT UNDER PURCHASE MAY BE MENTIONED (XIX) SPECIALISED TRAINING REQUIREMENTS FOR THE PURCHASER’S PERSONNEL SHOULD BE OUTLINED. DEVELOPMENT OF INDIGENEOUS SUBSTITUE OF POL USED: IT IS NECESSARY THAT A STIPULATION BE MADE IN THE CONTRACT THAT PLANT SUPPLIERS INFORM THE PURCHASER ABOUT FULL DETAILS AND

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AND SPECIFICATION OF ALL POL ITEMS AND SUGGEST LIKELY INDIAN SUBSTITUTES OR SPECIAL FEATURES OF THE OIL USED. METRIC SYSTEM MUST BE USED IN FRAMING OF SPECIFICATION.

PROCUREMENT GUIDELINS

CONTRACTING PRACTICE: 2. OFB HAS ADOPTED TWO BIDS SYSTEM FOR PROCUREMENT OF PLANT & MACHINERY IN THAT THE TENDERERS HAVE TO SUBMIT THEIR OFFERS IN TWO BIDS SYSTEM I.E TECHNICAL BID AND PRICE BID IN TWO SEALED COVERS KEPT IN MAIN SEALED COVER. 3. THE TECHNICAL BID AND THE PRICE BID WILL BE IN IDENTICAL FORMAT, DIFFERENCE BEIN THAT PRICES OF DIFFERENT ITEMS WILL BE INDICATED ONLY IN PRICE BIDS WHEREAS IN TECHNICAL NO PRICE DETIALS WILL BE INDICATED AND LEFT BLANK. 4. ON THE DUE DATE OF TENDER OPENING ,THE

P G-2 SEALED COVER CONTAINING THE TECHNICAL BIDS WILL ONLY BE OPENED IN PRESENCE OF TWO OFFICERS. THE SEALED COVERS CONTAINING THE PRICE BIDS WILL NOT BE OPENED AND SAFELY RETAINED. 4. THE CONTENT OF THE TECHNICAL BIDS WILL BE READ TO THE BIDDERS BY TENDER OPENING OFFICERS, BRIEF COMPATATIVE STATEMENT PREPARED AND INITIALED BY THE OFFICERS. 5. THE TECHNICAL BIDS WILL BE EXAMINED BY FY’S TEC AND ITS RECOMMENDATIONS SENT TO OFB IN RESPECT OF THE CASES EXCEEDING FINANCIAL POWER’S OF GMs. AFTER APPROVAL OF THE APPROPRIATE LEVEL OF TEC I.E Fy’s LEVEL HEADED BY GM OR OFB LEVEL, FACTORY WILL GIVE 10 DAYS NOTICE TO THE TENDERERS REGARDING TIME AND DATE FOR OPENING OF PRICE BIDS TO ENABLE THEM TO WITNESS THE PRICE BIDS OPENING

PG-2

IF THEY SO DESIRE. 6. ON THE DUE DATE OF PRICE BIDS OPENING , ONLY THE PRICE BIDS OF TENDERS WHOSE OFFERS HAVE BEEN CONSIDERED TECHNICALLY ACCEPTABLE WILL BE OPENED WHILE THE PRICE BIDS OF TECHNICALLY UNACCEPTABLE OFFERS WILL NOT BE OPENED. 3. TENDERS RECEIVED AFTER DUE DATE OF TENDER OPENING WILL BE MARKED LATE AND THE SAME NEED NOT TO BE OPENED UNLESS THE RELEVANT LEVEL OF TEC DECIDES TO DO SO. 4. THE TENDERERS ARE REQUIRED TO FURNISH CLAUSE BY CLAUSE COMPLIANCE OF SPECIFICATIONS IN A SPECIFIED FORMAT, AS

P SHOWN BELOW,ALONGWITH THEIR TECHNICAL BIDS. FAILURE TO SUBMIT THIS COMPLANCE STATEMENT WOULD MAKE THEIR OFFERS LIABLE FOR REJECTION. PARA OF TENDER ENQUIRY AND REQUIRED SPECIFICATI ON

SPECIFICA TION OF MACHINE OFFERRED

COMPLIANCE TO TE SPECIFICATION, YES OR NO

IN CASE OF NON COMPLIANCE DEVIATION FROM TENDER SPECIFICATION TO BE INDICATED.

PG-4 • ALL TENDERERS SHOULD BE ASKED TO KEEP THE PRICE BIDS VALID FOR 3 TO 4 MONTHS. ALL TECHNICAL EVALUATION SHOULD BE DONE WITH URGENCY AND IF ON THE BASIS OF TECHNICAL EVALUATION AND CLARIFICATION , PRICE CHANGES BECOME NECESSARY , THE FIRM MAY OFFER SEALED COVER CHANGES TO THEIR ORIGINAL PRICE WHICH WILL ALSO BE OPENED AT THE TIME OF OPENING OF ORIGINAL PRICE BIDS. THE DATE OF OPENING OF PRICE BIDS MAY BE FIXED WITH RESPECT TO THE DATE OF COMMUNICATION REGARDING OPNING OF PRICE BIDS. THE FIRM MAY BE ASKED TO KEEP THE VALIDITY OF THEIR PRICE OFFERS FOR A

P G-5 MINIMUM PERIOD OF EIGHT WEEKS FROM THE DATE OF OPENING OF PRICE BIDS. IT FURTHER STATES THAT THE BIDS CONTAINING PRICE OFFER RECEIVED AFTER OPENING OF TECHNICAL OFFERS, THOUGH BEFORE THE DATE FIXED FOR OPENING THE PRICE BIDS FOR PRICE OFFERS, WILL BE REGARDED AS LATE TENDER. IT MAY THEREFORE NECESSARY TO INFORM THE TENDERER THAT REVISION IN PRICE BID OR TECHNICAL BID HAVING IMPACT ON PRICES WILL NOT BE ACCEPTED. SINCE THE TWO BID SYYSTEM IS FOLLOWED IN ORD. FYS., BOTH THE TECHNICAL BID AND COMMERCIAL BID IS TO BE REJECTED.

PG-6 • NO REVISION OF PRICE BIDS AFTER THE DUE DATE LAID DOWN FOR THEIR RECEIPT SHALL AT ALL BE CONSIDERED BUT IF THE DECISION ON THE ACCEPTANCE OF THE TENDER IS DELAYED BEYOND THE ORIGINAL VALIDITY OF OFFERS, AS REQUESTED IN THE INVITATION TO TENDER AND ANY FIRM CHOOSE TO REVISE THEIR PRICE BIDS ON THAT ACCOUNT, EACH CASE MAY BE TREATED ON MERITS. • IN CASE, ANY REVISION TO TECHNICAL SPECIFICATION OR SCOPE OF SUPPLY AND PRICES BECOME UNAVOIDABLE, THE SAME SHOULD BE RECORDED IN THE FACTORY TEC MEETING WITH REASONS AND CLEARANCE OF OFB, BOTH OPERATING DIVN. AND PEDB. DIVN WILL BE OBTAINED BEFORE OPENING OF PRICE BIDS.

GENERAL CONDITIONS OF CONTRACT

• THE CONTRACT FOR PROCUREMENT OF PLANT AND MACHINERY IN ORDNANCE FACTORIES INCORPORATE A GENERAL CONDITION OF CONTRACT. THE CONTRACT WILL BE GOVERNED BY THE CONDITIONS STIPULATED IN DGS&D AS GENERAL CONDITIONS. • THE GENERAL CONDITIONS WILL PREVAIL UNLESS OTHERWISE SUPERSEDED BY ANY OTHER SPECIFIC CONDITION IN THE CONTRACT. • LATEST ARBITRATION CLAUSE SHALL BE APPLICABLE. • ANNEXURE

MODES OF TENDER • THERE ARE FOUR MODES OF TENDER: (i) SINGLE TENDER: PROCUREMENT OF PLANT AND MACHINERY NORMALLY SHOULD NOT BE RESORTED TO BY SINGLE TENDER. SINGLE TENDER PURCHASE AGAINST PROPRIETORY ARTICLE CERTIFICATE MAY BE RESORTED ONLY FOR PURCHASE OF EQUIPMENTS/SPARES ACCESSORIES ETC. WHICH ARE REQUIRED TO REPLACE SUCH OF THOSE EQUIPMENTS/SPARES ACCESSORIES WHICH FORM PART OF INTEGRATED PLANT, FROM THE ORIGINAL SUPPLIER OF SUCH PLANT. FOR EXAMPLE, PURCHASE OF VACCUME PUMP/COMPRESSORS/GLASS VESSELS, ETC. IF COVERED UNDER P & M IF THE SUBSTITUTE ARE NOT AVAILABLE /CAN NOT BE INTEGRATED IN THE ORIGINAL PLANT.

MT-1 •

(c) (d)

LIMITED TENDER: LIMITED TENDER ENQUIRY SHOULD BE ISSUED PREFERABLY TO AT LEAST 6 KNOWN AND RELIABLE SOURCES FOR THE EQUIPMENT. NAME OF THE FIRMS TO WHOM TENDER IS TO BE ISSUED IS DECIDED BY THE TENDER PURCHASE COMMITTEE HEADED BY GM. THERE SHOULD BE NO FURTHER INCLUSSION OF NAMES OF FIRMS BEYOND THAT DECIDED IN THE TPC MEETINGS. IT IS ALSO FOLLOWED IN CASES: WHERE IT IS NOT IN THE PUBLIC INTEREST TO ISSUE ADVERTISED TENDER ENQUIRY FOR RECORDED REASONS THAT THE DEMAND IS URGENT , AND THE NATURE OF URGENCY AND

MT-1 (c ) WHEN THE SOURCE OF SUPPLY ARE DEFINTELY KNOWN AND FURTHER SOURCES BEYOND THOSE KNOWN ARE UNLIKELY TO YELD UNDER COMPETITION. (iii) OPEN OR ADVERTISED TENDER AS A RULE, ALL PURCHASES SPECIALLY WHERE VALUE IS LARGE AND ADEQUATE TIME IS AVAILABLE, SHOULD BE MADE BY OPEN TENDER. IN CASE OF PURCHASE OF ITEMS LIKE A HEAVY PLANT, MACHINERY OR EQUIPMENT TO BE IMPORTED FOR PROJECTS WHERE WIDER COMPETITION IS CONSIDERATION NECESSARY, GLOBAL TENDER ENQUIRY MAY BE ISSUED. TENDER NOTICE IN SUCH CASES MAY BE ISSUED IN INDIA IN LEADING NATIONAL DAILIES, INDIAN TRADE JOURNAL AND FOREIGN DAILIES TRADE JOURNALS THROUGH THE

MT-3 SUPPLY MISSION ABROAD. TWO BID SYSTEM: ALL CAPITAL ITEMS, ARE PURCHASED AGAINST TWO BID SYSTEMS. QUOTATIONS ARE CALLED FOR FROM THE FIRM IN TWO SEPARATE SEALED COVERS INDICATING “TECHNICAL BID “AND “PRICE BID”. IN TECHNICAL BID COST OF THE ITEM IS NOT MENTIONED. ISSUE AND PREPARATION OF TENDER ENQUIRIES: GENERAL: PROCUREMENT OF P&M IS DONE THROUGH INVITATION OF TENDERS. THIS AS PER NORMS SET BY THE GENERAL FINANCE RULES.THE PROCESS OF TENDERS THROUGH SEALED COVER CAN BE FOLLOWED IN ANY OF THE ABOVE STATED METHODS

MT-4 • ISSUE OF ENQUIRIES: THE ADVERTISED TENDER ENQUIRY SHOULD CONTAIN BRIEF DETAIS OF THE MACHINE TO BE PURCHASED AND AT THE LOCATION WHERE REQUIRED. THE PURCHASER MAY APPLY HIS DISCRETION IN MENTIONING THE QUANTITY SO AS NOT TO ADVERSELY AFFECT THE PRICES. NORMALLY THE STANDARD MEDIUM OF PUBLISHING ADVERTISED TENDER ENQUIRY IS THE INDIAN TRADE JOURNAL PUBLISHED BY DIRECTOR GENERAL OF COMMERCIAL INTELLIGENCE AND STATICS. TENDER NOTICE MAY ALSO BE PUBLISHED IN NATIONAL OR LOCAL DAILIES THROUGH DAVP TO GIVE WIDER PUBLICITY. COPIES OF NOTICE MAY ALSO BE SENT TO THE KNOWN/REGISTERED SUPPLIERS.

MT-5 • THE LIMITED AND SINGLE TENDER ENQUIRIES ARE SENT TO THE SUPPLIERS UNDER CERTIFICATE OF POSTING TO RESPOND. THE LIMITED TENDER ENQUIRY WILL BE ISSUED UNDER CERTIFICATE OF POSTING TO ALL LIKELY SOURCES. THEY WILL INCLUDE: • (i) REGISTERED SUPPLIERS (ii) PAST SUPPLIERS (iii) LIKELY SUPPLIERS AS INFORMED BY THE USER (iv) FIRMS WHO ARE KNOWN TO HAVE THE CAPACITY TO SUPPLY. IT WILL ALSO BE ENSURED THAT FIRMS WHOSE PERFORMANCE HAS BEEN UNSATISFACTORY ARE NOT ALLOWED TO PARTICIPATE AGAINST FURTHER TENDER ENQUIRY. IT IS NECESSARY THEREFORE THAT LIST OF FIRMS SUSPENDED/BANNED FROM

MT-7 • WHEN A TENDER ENQUIRYIS SCRAPPED AND A FRESH TENDER ENQUIRY IS ISSUED, NOTICE THEREOF SHOULD BE SENT TO THE FIRMS WHO QUOTED INRESPONSE TO THE ORIGINAL SCRAPPED TNDER ENQUIRY. • PREPARATION AND ISSUE OF TENDER ENQUIRY: • THE TENDER DOCUMENTS SHOULD BE PREPARED WITH DUE CARE MENTIONING QUANTITY, QUALITY,DELIVERY,DESTINATION ETC. WHICH WOULD BE HELPFUL IN PREPARATION AND SUBMISSION OF TENDER. IT WILL IN GENERAL CONSIST OF AN INVITATION TO TENDER,SCHEDULE TO TENDER GIVING DESCRIPTION OF STORES, DELIVERY, QUANTITY ETC.DOCUMENTS ARE TO BE SIGNED BY TENDERER AGREEING TO GENERAL

MT-8

• CONDITIONS GOVERNING THE ENQUIRY AND RESULTANT CONTRACT(S), QUESTIONNAIS SO REQUIRED. IN ADDITION, SPECIAL CONDITIONS MAY ALSO BE LAID DOWN. COMPETANT INSPECTION AUTHORITY MAY ALSO BE CONSULTED TO ENSURE THAT THERE IS NO CONDITION THAT INHIBITS INSPECTIONN FUNCTION. THE TENDER ENQUIRIES MAY BE ISSUED UNDER THE FSCIMILE SIGNATURE OF THE OFFICER SIGNING FOR AND ON BEHALF OF PRESIDENT OF INDIA. THE OFFICE COPY WILL BE SIGNED IN INK. • VALIDITY OF OFFERS: THE TENDERS SHOULD REMAINVALID FOR A PARTICULAR PERIOD AFTER TENDER OPENING, WHICH IS KNOWN AS THE PERIOD OF VALIDITY. THE PERIOD OF VALIDITY IS TO BE

MT-9 INDICATED IN THE TENDER DOCUMENT. • SELECTION AND PREQUALIFICATION OF FIRMS: • GENERAL: IN THE COURSE OF PURCHASES FOR OFs, IT IS NECESSARY TO ESTABLISH RELIABLE SUPPLIERS BASED ON PERFORMANCE AND CAPACITY ETC. THEY ARE REGISTERED/APPROVED FOR A SPECIFIED PERIOD OF YEARS AT THE END OF WHICH THEY ARE REQUIRED TO RENEW THEIR REGISTRATION. THE PROCESS OF REGISTRATION IS MEANT TO KEEP A LIST OF APPROVED LIST OF CONTRACTORS, IT DOES NOT PRECLUDE INCLUDING OTHER LIKELY SOURCES OF SUPPLY TO WHOM TENDER MAY BE ISSUED.

Mt-10 • FIRMS ENGAGED IN MANUFACTURING, STOCKING, SELLING OF PLANT & MACHINERY OR OFFERING SERVICES REQUIRED BY THE PURCHASER’S ORGANISATION ARE ELIGIBLE FOR REGISTRATION. IT SHALL BE THE RESPONSIBILITY OF THE FIRM TO KEEP THEIR ARTICLES OF ASSOCIATION AND AGREEMENTS WITH THEIR PRINCIPALS ALIVE TO BE ELIGIBLE FOR REGISTRATION AS ARE APPROVED SUPPLIER WITH ORDNANCE FACTORIES. AUTHORITIES TO GRANT REGISTRATION ARE THE HEADS OF ORDNANCE FACTORIES PURCHASING SUCH STORES. • THE COST OF APPLICATION FORM AND PROCESSING FEES ETC ARE TO BE SPECIFIED FROM TIME TO TIME.

mt11 THE APPLICATION FORMS CAN BE OBTAINED FROM THE RESPECTIVE UNITS ON PAYMENT OF COST OF FORMS. THE PROCESSING FEES WILL BE SUBMITTED ALONGWITH THE FORM. BOTH THE FEES ARE NOT – REFUNDABLE. IN CASE THE FIRM SEEKS RENEWAL/ADDITIONAL REGISTRATION, PRESCRIBED FEES WILL BE SUBMITTED ALONGWITH APPLICATION FORMS. • DOCUMENTS TO BE SUBMITTED ALONGWITH APPLICATION FORMS:(iii) CURRENT INCOME TAX CLEARANCE CERTIFICATE. (iv) AGREEMENTS WITH PRICIPALS AND THEIR TERMS AND CONDITIONS.

MT-12 COPIES OF LAST THREE YEARS ANNUAL REPORT INDICATING PROFITS AND LOSSES. (iv) COPIES OF PARTNERSHIP DEEDS. (v) COPIES OF OWNERSHIP DOCUMENTS IN RESPECT OF MANUFACTURING PLANT (vi) AFFIDAVIT THAT THE FIRM HAS NEVER BANNED. (vii) REGISTRATION AS SSI WITH THE DIRECTOR OF INDUSTRY OF THE STATE. (viii) THE MANUFACTURERS ARE TO FURNISH ALL INFORMATION ON TECHNICAL COMPETENCE, MANUFACTURING CAPABILITIES, INSPECTION FACILITIES, AVAILIBILITY OF SKILLED AND TECHNICAL MAN POWER, TECHNICAL STANDARDS OF (iii)

MT-13 ITEMS UNDER MANUFACTURE. (ix) THE MANUFACTURERS OUGHT TO UNDERTAKE THAT THEY WOULD PROVIDE ADEQUATE INSPECTION FACILITIES AT THEIR WORKSHOP. (iii) THE CAPABILITY REPORTS FROM THE GOVT. OF THE MANUFACTURER’S COUNTRY IN CASE OF FOREIGN FIRMS SHOULD BE ASKED FOR, REFERENCE MAY ALSO BE MADE TO EMBASSY OF THE COUNTRY IN INDIA. (iv) IN ADDITION TO ABOVE ALL THE TENDERER SHOULD BE REGISTERED WITH THE PURCHASER REMOVAL OF A FIRM FROM THE LIST OF REGISTERED SUPPLIERS: A FIRM MAY BE REMOVED FROM THE LIST OF APPROVED CONTRACTORS IF ANY OF THE INFORMATION FURNISHED DURING REGISTRATION IS FOUND NOT TO BE CORRECT OR DUE TO CHANGED CONDITIONS LIKE BANKRUPTY OR LACK OF TECH. CAPABILITY ETC.

MT-14 • OFB HAVE LAID DOWN CERTAIN GUIDELINES ON VERIFICATION OF CREDENTIALS OF THE FIRMS SHORT LISTED FOR ISSUE OF TENDERS. IT STATES THAT ALONG WITH THE FACTORY’S TPC RECOMMENDATION FOR ISSUE OF LIMITED TENDER AND MODE OF TENDERING IT WOULD BE OBLIGATORY TO FURNISH THE FOLLOWING INFORMATION: (i) WHETHER THE RECOMMENDED FIRM(S) IS/ARE KNOWN POTENTIAL WUPPLIER OF SIMILAR MACHINE (ii) WHETHER THE PERFORMANCE OF THE SIMILAR MACHINE SUPPLIED BY THE FIRM IS EITHER KNOWN OR VERIFIED.

MT-14 (iii) WHETHER THE RECOMMENDED FIRM(S) IS/ARE HAVING THE REQUISIT TECH. AND FINANCIAL COMPETANCY WITH REGARD TO THE DESIGN, DEVELOPMENT AND SUPPLY OF SUCH MACHINES. (iv) IN CASE THE FIRM DOES NOT CONFIRM TO (i) or (ii) or (iii) CATEGORIES, IN THAT CASE NAME AND ADDRESS OF THE CUSTOMER TO WHOM THE RECOMMENDED FIRM(S) HAVE SUPPLIED SIMLAR MACHINE AND THEIR PERFORMANCE REPORT. (v) WHETHER THE FIRM(S) RECOMMENDED IS /ARE HAVING SUFFICIENT CREDIBILITY TO BE CONSIDERED AS GOVT. SUPPLIERS AS WELL AS THEIR ACCEPTANCE TO OUR PAYMENT TERMS. THE ABOVE PARTICULARS ARE REQUIRED TO BE FURNISHED IN SUPPORT OF THE RECOMMENDATION

MT-15 OF THE FACTORY’S SELECTION OF THE FIRM. RECEIPT, CUSTODY AND OPENING OF TENDERS: TENDERS ARE RECEIVED BY POST/COURIER OR DROPPED IN THE TENDER BOX . TENDERS, WHICH ARE RECEIVED BY HAND ARE TO BE RECEIVED BY AN OFFICER WHO WOULD SIGN WITH THE DATE AND TIME OF RECEIPT. THEY WILL BE DROPPED IN THE TENDER BOX. • TENDERS RECEIVED THROUGH POST WILL BE SENT TO CONCERNED PURCHASE SECTION. • IF AN ENVELOPE CONTAINING TENDER DOCUMENTS DO NOT HAVE ANY PARTICULARS MENTIONED ON IT, THE ENVELOPE MAY BE OPENED BUT RESEALED IN THE PRESENCE OF AN OFFICER.

Opening of tender-2 • TENDERS WILL BE OPENED AT THE TIME ON DATE STIPULATED , BY TWO OFFICERS NOMINATED. • UNLESS SUFFICIENT REASONS EXIST,TENDER SHOULD BE OPENED IN THE PRESENCE OF FIRM’S REPRESETATIVE,WHO HAVE QUOTED.A STATEMENT WITH SIGNATURES WILL BE PREPARED FR ALL THE REPRESENTATIVES PRESENT. • THE DETAILS OF TENDERS WILL READ OUT IN THE PRESENCE OF THE REPRESENTATIVES. • EACH TENDER WILL BE NUMBERED AND INITIALED WITH DATE ON THE FIRST PAGE. THE QUANTITY,PRICES, DELIVERY ETC WILL ALSO BE CIRCLED AND INITIALED WITH DATE. ANY CORRECTIONS,ALTERATIONSAND CUTTING SHOULD ALSO BE CIRCLED,INITIALED WITH DATE TO INDICATE

OPENING OF TENDER-3 • THE FACT AT THE TIME OF OPENING OF TENDERS. • A SPOT COMPARATIVE STATEMENT OF TENDERS WILL BE MADE OUTINCLUDING THE PARICULARS READ OUT DURING TENDER OPENING. • LATE AND DELAYED TENDERS: TENDERS OR MODIFICATIONS TO TENDERS RECEIVED AFTER OPENING OF TENDERS IS CALLED LATE TENDER.SUCH DELAYED/LATE TENDERS NEED NOT TO BE OPENED AND “LATE/DELAYED”ENDORSED ON THEIRORIGINAL ENVELOPE.THEY MAY BE RETURNED IMMEDIATELY TO THE FIRM,UNOPENED ,IMMEDIATELY AFTER TENDER OPENING.

EARNEST MONEY DEPOSITS & SECURITY DEPOSITS (EMD/SD) • GENERAL: AS PER GENERAL FINANCIAL RULE EARNEST MONEY DEPOSITS SHOULD BE CALLED FOR FROM TENDERERS, WHO ARE PARTICIPATING AGAINST TENDER ENQUIRY,UNLESS THEY ARE REGISTERED WITH DGS&D,NSIC OR THE PURCHASING DEPARTMENT. • EARNEST MONEY MAY NOT BE INSISTED UPON FROM FIRMS PARTICIPATING AGAINST TENDER ENQUIRY FOR STORES,INCLUDING CAPITAL ITEMS WORTH RS. 1 LAKH OR LESS. • EMD SHOULD BE CHRGED AT 2% OF THE ESTIMATED VALUE OF THE PLANT & MACHINERY SUBJECT TO

EMD &SD-2 A CEILING OF RS. 2 LAKH,AT THE TIME OF ENQUIRY IT SELF.EMD A/M SHOULD BE MENTIONED IN GENERAL CONDITIONS OF TENDER DULY CALCULATED THE VALUE OF M/C AND ITS SPARE PARTS. • IN CASE THE VENDER MENTIONS THE ED VARYING FROM SOME PERCENTAGE TO SOME PERCENTAGE THE CST SHOULD BE PREPARED TAKING THE MAXIMUM THAT COULD BE LEVIED AS PER ORDERS ON DATE. • EMD MAY BE SUBMITTED IN THE FORMS OF DEMAND DRAFT,FIXED DEPOSIT RECEIPTS,BANKERS CHEQUE,BANK GUARANTEE INSPECIFIED FORMATE. THE EMD THAT IS SUBMITTED SHOULD BE VALIDATED 45 DAYS BEYOND THTHE PERIOD OF VALIDITY OF OFFER. • OFFERS NOT ACCOMPNIED WITH EMDARE TO BE REJECED EVEN FOR TECH.EVALUATION/ACCEPTANCE

EMD & SD

• EMD MAY BE RETURNED TO UNSUCESSFUL TENDERERS SOON AFTER THE TENDER VALIDITY. EMD OF THE SUCESSFUL TENDERERS MAY BE RETURNED AFTER SUBMISSION OF PERFORMANCE SECURITY. • EMD SHALL BE FORFEITED IF THE TENDERER WITHDRAWS FROM THE TENDER IN ANY RESPECT WITHIN THE VALIDITY OF THE TENDER. EMD MAY BE FORFEITED IF THE SUCESSFUL TENDERER FAILS TO SUBMIT THE PERFORMANCE SECURITY. • PERFORMANCE SECURITY: ALL SUCESSFUL TENDERERS, IRRESPECTIVE OF THEIR REGISTRATION STATUS WITH DGS&D/NSIC/PURCHASING DEPARTMENT HAVE TO SUBMIT PERFORMANCE

EMD & SD

SECURITY WITHIN 30 DAYS OF CONTRACT FOR DUE PERORMANCE OF THE CONTRACT. THE AMOUNT OF THE SECURITY DEPOSIT SHOULD BE OF 10% OF THE VALUES OF THE CONTRACT IN INDIAN RUPEES. THE CONTRACTOR IS NOT EXPECTED TO SUBMIT STORES FOR INSPECTION BEFORE SUBMISSION OF PERFORMANCE SECURITY.IF CONTRACTOR FAILS TO SUBMIT THE PERFORMANCE SECURITY DEPOSIT MAY ENTAIL CANCELLATION OF CONTRACT.HOWEVER A REQUEST FOR EXTENSION OF DATE OF SUBMISSION OF PERFORMANCE SECURITY MAY BE CONSIDERED BY GENERAL MANAGER. IF A CONTRACT HAS BEEN COMPLETED WITHIN DUE DATE AND WITHIN THE PERIOD OF VALIDITY OF BANK

EMD & SD GUARANTEE, SUBMITTED AS PERFORMANCE SECURITY, PAYMENT SHALL NOT BE HELD UP. THE FORMS OF PERFORMANCE SECURITY ACCEPTABLE ARE AS FOLLOWS: SL NO.

1. DEMAND DRAFT ON SCHEDULED BANKS

IN WHOSE NAME

FORMS OF DEPOSITS/CONDITIONS

GM (FYS)

INTEREST FREE DEPOSITS HELD BY THE PURCHASING ORGANISATION

RETENTION

THEROF SHALL BE RETAINED AS VALUABLE DOCUMENT

EMD & SD BANK GUARANT EES

GM

BG, ON NON JUDICIAL STAMPS PAPER MAY BE RETAINED ALONG WITH REVALIDATION PAPERS. IT SHOULD BE VALIED FOR A PERIOD OF 60 DAYS BEYOND THE PERIOD OF PERFORMANC

SHALL BE RETAINED AS VALUABLE DOCUMEN T.

• NOTE: DOCUMENTS PRESCRIBED ABOVE SHOULD BE MADE AUDITABLE DOCUMENTS SUBJECT BY LAO. • REFUND OF PERFORMANCE SECURITY: ON DUE PERFORMANCE OF CONTRACT, THE PERFORMANCE SECURITY DEPOSIT SHALL BE REFUNDED. • PERFORMANCE SECURITY CAN BE FORFEITED AND CREDITED TO GOVT. IN EVENT OF BREACH OF CONTRACT.

EVALUATION OF TENDERS

CH-5

• GENERAL: TENDER EVALUATION IS AN IMPORTANT ASPECT IN THE PROCESS OF PLACEMENT OF ORDER. THE OFFERS RECEIVED FROM INTENDING BIDDERS ARE SCRUTINISED AND ASSESED WITH A VIEW TO ENSURE COMPLIANCE TO THE SPECIFICATION OF THE MACHINERY REQUIRED AND IDENTIFYING THE LOWEST TECH. ACCEPTABLE OFFER. THE EVALUATION OF TENDERS IS DONE IN DIFFERENT PHASES. • IT IS TO BE KEPT IN MIND WHILE PROCESSING FOR PROCUREMENT OF P&M, WHETHER IT IS UNDER GM’S OR OFB POWER.

EVALUATION OF TENDERS-2

• •

TECHNICAL EVALUATION AT FACTORY: ON OPENING OF TENDERS, A COMPARATIVE STATEMENT OF TENDERS IS MADE, ON EACH TECH. PARAMETER. IT SHOULD RECORD IN A TABULAR PRESENTAION THE TECH. COMPLIANCE WITH SPECIFICATIONS, CONFIRMED IN THE TENDER AND SUBSIQUENT CLARIFICATIONS RECEIEVED. IT SHOULD ALSO CONTAIN THE FOLLOWING, WITHOUT MENTIONING THE COST: (iii) SPECIAL TECH. FEATURES (iv) SCOPE OF SUPPLY THAT IS THE BASIC MACHINE, ACCESSORIES, SPARES ETC. (v) IF PRICE QUOTED IS EX WORKS OR AT DESTINATION. (vi) IF FREIGHT IS CHARGED EXTRA

ET-3 (i)

IF PACKING AND FORWARDING CHARGES ARE EXTRA (ii) IF ERECTION & COMMISSIONING CHARGES EXTRA (iii) PAYMENT TERMS (iv) TAXES AND DUTIES ETC. (v) PRE-DESPATCH INSPECTION TERMS OFFERED BY THE FIRMS (vi) FINAL ACCEPTANCE TERMS AS ACCEPTED BY THE FIRMS (vii) WARRANTY/GUARANTEE ETC. (viii) DELIVERY SCHEDULE,ACCEPTANCE OF LD ETC. (ix) VALIDITY

ET-4

(xiv)SUBMISSION OF EMD WITH THE TENDER DOCUMENT (xv) ACCEPTANCE OF ARBRITATION CLAUSE ETC. IN CASE OF PROCUREMENT OF PLANT & MACHINERY OF IMPORTED ORIGIN, FOLLOWING INFORMATION MAY BE INCLUDED: iv) PENALTY FOR USE OF UNDUE INFLUENCE v) AGENT/AGENCY COMMISSION vi) CONDITION OF ARBITRATION PROCEEDING IN INDIA THE ABOVE IS ONLY INDICATIVE BUT ARE REQUIRED TO BE COMPILED TO ASSIST DECISION MAKING IN THE TEC AT FACTORIES AND OFB. IF ANY TECHNICAL CLARIFICATIONS ARE REQUIRED TO BE OBTAINED FROM THE FIRMS FOR PROPER

ET-5

EVALUATION OF THE OFFER,THE SAME BE OBTAINED AND INCLUDED IN THE CST. THEN THE DGM/ENGG AND DGM/USER AUTHENTICATE THE CST. FACTORY LEVEL TPC IS FORMED CONSISTING OF THE FOLLOWING MEMBERS GM -CHAIRMAN AGM/ENGG. - MEMBER AGM/USER - MEMBER JT.GM/ENGG - MEMBER JT.GM/USER - MEMBER CONTROLLER OF ACCOUNTS/ -MEMBER JT.C OF A THE ABOVE COMMITTEE RECOMENDS THE TECHNICAL SUITABIKITY OF OFFERS RECEIVED

ET-6

AGAINST THE TENDER INDICATING REASONS IN DETAILS ABOUT THE OFFERS NOT CONSIDERED TECHNICALLY ACCEPTABLE. THE MINUTES OF MEETING IS PREPARED AND SENT TO OFB ALONG WITH ALL THE TECH. BIDS, TECH CST AND TENDER SPECIFICATION AND A COPY OF TENDERS ALONG WITH DRG, IF ANY, FOR APPROVAL OF OFB/TEC. THE TEC AT FY. LEVEL IS EMPOWERED TO SCRUTINISE AND APPROVE TECHNICAL SELECTION OF FIRMS FOR P&M UNDER GM’S POWER. FOR M/CS COSTING MORE THAN THAT ,FY/TEC RECOMMENDATIONS ARE TO BE FORWARDED TO OFB FOR APPROVAL. THE CONSTITUTION OF TEC IS SAME AS TPC BOTH AT

ET-7

FY. AND OFB LEVEL AT PRESENT. THE TEC RECOMMENDATION OF THE FACTORY SHOULD HAVE THE QUOTATIONS IN ORIGINAL ENCLOSED ALONG WITH CATALOGUES IF ANY. • THE TECH. CST s ARE PREPARED BEFORE SEEKING CLARIFICATION OR CONFIRMING ACCEPTABILITY OF OFFERS. THEY SHOULD BE DULY UPDATED AFTER RECEIPT OF CLARIFICATIONS TO COMPLETE THE TECH. CST. THE COLUMNS SHOULD NOT BE LEFT BLANK,OR ENTRIES CONTRADICTORY TO THE FINAL TECH RECOMMENDATIONS IN ABSENCE OF PROPER UPDATION.A CLAUSE WISE COMPLIANCE STATEMENT, SUMITTED BY THE FIRM, TO INDICATE CONFORMANCE WITH TECH SPECIFICATIONS MUST ALSO BE CONSIDERED FOR FILLING TECH CST.

TE-8

• TECHNICAL EVALUATION AT OFB: THE RESPECTIVE SECTION AT OFB, ON RECEIPT OF THE TEC PROCEEDINGS AND TECH OFFERS, WILL SCRUTINISE FOR CORRECTNESS OF ENTRIES AND COMPLIANCE OF INSTRUCTIONS RELATED TO TEC PROCEEDINGS. • A BRIEF IN THE PRESCRIBED MANNER WILL BE CIRCULATED TO ALL FOR PROCESSING BEFORE TEC MEETINGS ARE HELD. • ON CONDUCTION OF TEC PROCEEDINGS, THE MINUTES ARE CIRCULATED FOR ALL CONCERNED AUTHORISING THE FACTORIES TO OPEN PRICE BIDS.

tps

• TENDER PURCHASE SELECTION AT THE FACTORY: • ON RECEIPT OF APPROVAL OF OFB/TEC, PRICE BIDS OF TECHNICALLY ACCEPTABLE OFFERS ARE ANLY OPENED IN PRESENCE OF TENDERS ARE FINANCIAL CST/RANKING STATEMENT IS PREPARED ON EQUITABLE BASIS WHICH IS AUTHENTICATED BY THE DGM/ENGG AND LOCAL ACCOUNTS OFFICER. A FACTORY LEVEL COMMITTEE AS MENTIONED IN TEC IS FORMED WHO RECOMMENDS THE LOWEST OFFER AMONG THE TECHNICALLY SUITABLE OFFERS FOR PLACEMENT OF SUPPLY ORDER IN THE FORM OF MINUTES OF MEETING CONFIRMING THE REASONABILITY OF THE COST,ACCEPTANCE OF PAYMENT TERMS ETC. MINUTES OF MEETING ALONG WITH PRICE BIDS FINANCIAL CST ETC ARE SENT TO

TPS-2

OFB FOR APPROVAL OF OFB/TPC. THE PRICE BIDS ARE OF OFFERS WHICH ARE TECHNICALLY REJECTED NEED NOT BE OPENED. THE BIDDERS, WHOSE PRICE BIDS ARE TO BE OPENED ARE TO BE DULY INFORMED ABOUT OPENING OF THEIR PRICE BIDS. • FACTORIES ARE TO IMPRESS UPON THE TENDERS TO ENSURE THAT THEIR OFFERS MUST BE KEPT VALID. AN OFFER WHOSE VALIDITY HAS EXPIRED CANNOT BE CONSIDERED FOR PLACEMENT OF ORDER. • ON OPENING OF PRICE BIDS A RANKING STATEMENT SHOULD BE PREPARED ON THE SPOT AND ALL RELEVANT DETAILS SHOULD BE ANNOUNCED TO THE BIDDERS ATTENDING THE TENDER OPENING.A COMPLETE RANKING STATEMENT GIVING FULL

TPS-2

DETAILS MAY BE PREPARED SUBSEQUENTLY TO INCLUDE ALL RELEVANT INFORMATION NECESSARY FOR ASSESSING THE PRICE AT DESTINATION AND RANKING OF DIFFERENT BIDDERS. • THE RANKING STATEMENT SHOULD BE PREPARED ON EQUITABLE BASIS GIVING BASIC COST OF MACHINE,ACCESSORIES, TOOLING, ESSENTIAL AND OPTIONAL ITEMS,PACKING & FORWARDING CHARGES, ERECTION & COMMISSIONING COSTS, TRAINING COST,TAXES & DUTIES,FREIGHT PAYMENT TERMS, WARRANTY AND GUARANTEE CONDITIONS ETC. THE TOTAL COST OF PLANT & MACHINERYEXCLUDING SPARES AS AT DESTINATION MAY BE CALCULATED IN THE RANKING STATEMENT TO ASCERTAIN THE RANKING OF TECHNICALLY ACCEPTABLE TENDERERS

TPS-3

• IN CASE THE VENDOR MENTIONS THE ED VARYING FROM ONE PERCENTAGE TO ANOTHER PERCENTAGE, THE CST SHOULD BE SO PREPARED TAKING THE MAXIMUM THAT COULD BE LEVIED AS PER ORDERS ON DATE. • THE COST OF SPARES WITH LEVIES AND DUTIES THERON MAY BE WRITEN SEPARATELY IN THE SAME TABULATED FORMATFOR ALL FIRMS. THE TOTAL FINANCIAL IMPLICATION MAY BE WORKED OUT. • THE RANKING STATEMENT, COMMERCIAL CST SHOULD ALSO BE VERIFIED AND SIGNED BY OFFICERS OF FACTORY AND ACCOUNTS. • THE RANKING STATEMENT FOR IMPORTED PLANT & MACHINRY WILL BE BASED ON THE EXCHANGE RATE

TPS-4

ON THE DATE OF OPENING OF PRICE BID. IT SHOULD BE MENTIONED IN THE CST. • THE REASONABLENESS OF THE PRICES QUOTED BY THE LOWEST TECHNICALLY ACCEPTABLE TENDER IS TO BE ASCERTAINED BASED ON LAST PAID RATE OR BUDGETARY QUOTATION BASED ON WHICH THE DEMAND COST WAS ASSESED. • IF ADDITIONAL FUND IS REQUIRED, DETAILED JUSTIFICATION FOR THE SAME IS TO BE RECORDED IN TPC MINUTES FOR THE APPROVAL OF COMPETENT AUTHORITY. • THE SOs FOR P & M TO BE PURCHASED UNDER GMs POWER MAY BE PLACED BASED ON DECISION TAKEN IN THE TPC MEETINGS ON APPROVAL OF GM AND FINANCIAL AUTHORITY.

TPS-4

• FOR THE CASES BEYOND THE FINANCIAL POWER OG GM, FACTORYTPC RECOMMENDATION MAY BE FORWARDED TO OFB CLEARLY INDICATING ALL THE POINTS WHERE OFB’S DECISION ARE NEEDED. • TENDER PURCHASE COMMITTEE AT OFB: • FOR P&M TO BE PURCHASED UNDER OFB POWERS, THE TPC RECOMMENDATIONS OF FACTORY MAY BE FORWARDED TO OFB IN THE PRESCRIBED FORMAT WITH COPIES OF CSR/RANKING STATEMENT IN QUADRUPLICATE, ENCLOSING COPIES OF PRICE BIDS ETC. • THE CONCERNED SECTION IN OFB WILL SCRUTINIZE THE RANKING STATEMENT WITH THE TPC RECOMM-

TPS-5

• • • • •

RECOMMENDATIONS. THE BRIEF DULY PREPARED,HAVNG ALL CONNECTED PARTICULARS WILL BE SUBMITTED FOR RECOMMENDATIONS OF APPROPRIATE TPC. THE TPC DECISION WILL BE COMMUNICATED TO THE FACTORY FOR PLACEMENT OF ORDER. CHECK POINTS FOR SCRUTINY OF TENDERS: PROCEDURAL CHECK-POINTS FOR SCRUTINY OF OFFERS RECEIVED FROM VARIOUS FIRMS AGAINST TENDER ENQUIRY TECHNICAL BID: ALL OFFERS HAVE TO BE SIGNED BY TENDER OPENING OFFICER WITH DATE. IT MAY BE CHECKED WHETHER EMD HAS BEEN DEPOSITED BY THE TENDERER OR EXEMPTION HAS

TPS-6

• • • •

BEEN ASKED AS PER GOVT. ORDERS. ON OPENING OF THE TECHNICAL OFFERS, ONE COPY IS TO BE SENT TO THE USE SECTION FOR THEIR IMMEDIATE SCRUTINY. IN CASE THE COMPLINCE STATEMENT OF THE OFFER HAS NOT BEEN SUBMITTED BY THE FIRM, A LETTER IS TO BE ISSUED IMMEDIATELY. A TECH. CST IS TO BE PREPARED AND FORWARDED TO THE USER SECTION WITHIN A MAXIMUM PERIOD OF 7 DAYS. IN CASE THE FIRM IS REQUIRED TO GIVE SOME CLARIFICATIONS AND MAY REQUIRE A DISCUSSION THE FIRM SHOULD BE CALLED BY A LETTER INDICATIG A SPECIFICA DATE BY WHICH THE FIRM SHOULD SUBMIT THEIR CLARIFICATION.

TPS-8

• THE USER SECTIONSHOULD BE INVOLVED IN DISCUSSION AND IN THE RECORD OF DISCUSSION ALL PRESENT IN THE DISCUSSION INCLUDING FIRM SHOULD SIGNE. • REASONS FOR REJECTION ARE TO BE RECORDED IN THE TEC MINUTES WITH REFERENCE TO THE TENDER SPECIFICATION AND ALSO FROM FUNCTIONAL POIT OF VIEW. • IN CAE OF OPEN/GLOBAL TENDER ENQUIRY,CAPACITY/CAPABILITY OF THE TENDERERS AND THE PERFOMANCE OF PLANT & MACHINERY OFFERED HAVE TO BE ASCERTAINED BEFORE DECIDING UPON THE TECH. ACCEPTABILITY OF OFFERS OF THE TENDERERS.

TPS-9

• THE EXCISE DUTY, SALES TAX, OCTROI ETC ARE TO BE CLEARLY SPECIFIED BY THE FIRM. IN CASE OF NIL DUTIES, THE SAME SHOULD ALSO BE SPECIFIED. IN CASE THEY HAVE NOT CONFIRMED IN TECH BID THE SAME SHOULD BE ASKED IN WRITING BEFORE OPENING OF PRICE BID. • THE OFFER SHOULD CLEARLY INDICATE WARRANTY, VALIDITY AND THE DELIVERY OF THE ITEM. • THE STANDARD ITEMS, WHICH HAVE BEEN INDICATED BY THE FIRM IN THE OFFER, IT SHOULD BE SPECIFICALLY STATED WHETHER THOSE ARE BEING SUPPLIED AS ACCESSORIES. • AFTER THE SCOPE OF SUPPLY IS FINALISED,

Tps-10

CONFIRMATION MAY BE OBTAINED FROM THE FIRM BEFORE OPENING OF PRICE BID THAT THEY HAVE INDICATED ITEM WISE PRICE FOR ALL THE ITEMS WHICH IS PROPOSED TO BE PROCURED WITHOUT ANY EXCLUSIONS. • PRICE BID: NO CORRESPONDANCE SHOULD BE MADE WITH THE FIRM SEEKING CLARIFICATION, AFTER OPENING OF THE PRICE BID. • CST IS TO BE PREPARED BASED ON THE SCOPE OF SUPPLY ALREADY FURNISHED BY THE ENGG. OFFICE.

TPS-11

•

THE FOLLOWING INDICATED LIST OF ENTRIES WILL BE REFLECTED IN THE PRICE CST: (ii) TOTAL WITHOUT SPARES (iii) TOTAL WITHOUT SPARES BUT WITH DUTIES. (iv) RANKING (v) SPARES (vi) TOTALOF SPARES AND WITH DUTIES. (vii) TOTALWITH SPARES (viii) PAYMENT TERMS (ix) VALIDITY (x) WARRANTY REASONABLENESS OF THE PRICE QUOTED BY THE LOWEST TECHNICALLY ACCEPTABLE TENDER IS TO BE CHECKED BASED ON CERTAIN DATA VIZ. LPR,

Tps-12

• • 4. 5. 6. 7.

BUDGETARY QUOTATION BASED ON WHICH THE ESTIMATED COST WAS ASSESSED OR RECENT ORDERS PLACED BY SOME REPUTED FIRMS FOR SIMILAR MACHINES ETC. MODEL FORMATS FOR PREPARATION OF MINUTES OF FACTORY’S TEC RECOMMENDATION: NOMENCLATURE AND QUANTITY OF THE MACHINE. DEMAND NO, AND YEAR. REF OF RR PLAN (FOR RR M/CS) AND LAO’S CONCURRENCE. OFB’S SANCTION/CLEARANCE,REFERENCE AND DT. ESTIMATED COST FE-RE

TPS-12

5. 2. 3. 4. 5.

MODE OF TENDERING, JUSRIFICATION AND AUTHORITY TO THE SAME ALONWITH A COPY OF FACTORY TPC MINUTES. DATE OF ISSUE OF TENDER ENQUIRY,DUE DATE OF OPENING ,NAME OF THE FIRMS TO WHOM TENDER WAS ISSUED. DETAILS OF OFFERS RECEIVED INCLUDING FIRMS RESPONDED,REGRETTED AND NOT RESPONDED. DATE OF TEC MEETING AND DTAILS OF OFFERS CONSIDERED TECHNICALLY ACCEPTED AND REASON FOR ACCEPTING DEVIATION, IF ANY. A) DETAILS OF OFFERS NOT CONSIDERED TECH. ACCEPTABLE ALONGWITH REASONS DULY LINKING WITH RELEVANT CLAUSE OF TENDER SPECIFICATION.

TPS-14

a)

2. 3. 4.

SPECIFIC COMMENTS IN RESPECT OF OFFERS NOT CONSIDERED TECH SUITABLE AS TO WHETHER THE SAME MAY BE MEET FY’S REQT. FROM FUNCTIONAL PT. OF VIEW,IF NOT FIRM WISE COMMENTS SPECIFYING THE LIMITATION OF OFFERS VIS- A- VIS FUNCTIONAL NECESSITY. WHETHER THE REQT. IS STILL EXISTS KEEPING IN VIEW THE PRESENT & ANTICIPATED PRODUCT MIX AND PRODUCTION LOAD. CLAUSE-WISE TECH. CST IN RESPECT OF ALL THE OFFERS ON EQUTABLE BASIS. IN CASE OF LIMITED TENDER ENQUIRY, FACTORY TO COMMENT WHETHER THE REPUTED FIRMS HAVE BEEN ISSUED WITH TENDER ENQURY.IN THE EVENT OF LACK OF COMPETITION/POOR

TPS-15

13. RESPONSE FY-TEC MAY COMMENT ON WHETHER RETENDERING/OTE WILL FETCH MORE OMPETITION. RECOMMENDATION OF FY’S TEC BY GM DULY ASSOCIATING LAO.

5. 6. 7. 8. 9.

FOR PREPARATION OF MINUTES OF FY TPC RECOMMENDATIONS: NOMENCLATURE AND QUANTITY OF THE M/C. DEMAND NO. AND YEAR. OFB APPROVAL AND DATE REFERENCE AUTHORISING FY FOR OPENING OF PRICE BIDS. DATE OF FY TPC MEETING IN CASE OF IMPORTED OFFER-

TPC-17

i) ii) iii) iv)

6. 7.

COUNTRY OF ORIGIN RATE OF EXCHANGE TAKEN FOR ARRIVING AT FE REQUIREMENT. WHETHER CUSTUM DUTY EXEMPTED IF NOT RATE TO BE GIVEN. CONFIRMATION THAT ORDER WILL BE PLACED ON FOREIGN PRINCIPAL ONLY AND THAT THERE IS NO INVOLMENT OF INDIAN AGENT REQUIRING PAYMENT OF AGENCY COMMISSION. FINANCIAL CST IN RESPECT OF TECHNICALLY ACCEPTABLE OFFERS TAKING SCOPE OF SUPPLY ON EQUITABLE BASIS. WHETHER THE COST OF RECOMMENDED OFFER IS CONSIDERED REASONABLE, IF SO JUSTIFICATION

TPS-18

2. 3. 4.

5.

THE SAME. WHETHER RETENDERING OF TEM IS CONSIDERED ADVANTAGEOUS TO GET CHEAPER OFFERS. WHETHER THE SCOPE OF SUPPLY CAN BE REDUCED TO THE BAREST MINMUM WITHOUT AFFECTING THE INESCAPABLE NECESSITY. PAYMENT TERMS ACCEPTED BY FIRM AND RECOMMENDED BY FY. WHETHER OTHER COMMERCIAL TERMS AND CONDITIONS ARE ACCEPTABLE TO THE FACTORY. COST COMPARISON OR RECOMMENDED OFFER WITH THE ESTIMATED COST. IN CASE OF VIDE VARIATION, INDICATE SPECIFIC REASONS AND SO STATE WHETHER THERE HAS BEEN ANY REVISION IN SCOPE OF SUPPLY.

TPS-19

1.

2. 3. 4.

COST DETAILS OF RECOMMENDED OFFER VIS-À-VIS SANCTION COST AND DETAILS OF ADDITIONAL FUND IF ANY FOR THE TOTAL PURCHASE. VALIDITY OF RECOMMENDED OFFERS. ANY SPECIFIC/SPECIAL ISSUE WHERE APPROVAL OF OFB IS NEEDED. RECOMMENDATION OF FACTORY TPC HEADED BY GM DULY ASSOCIATING LAO.