dgsnd

1. DIRECTORATE GENERAL OF SUPPLIES & DISPOSALS SHRIKANT AKREDDIWAR MTECH INDUSTRIAL ENGG. MT14INDO23 DEPARTMENT OF MECHANICAL ENGG VNIT,NAGPUR SHRIKANT AKREDDIWAR 1 DIRECT MARKETING MATERIALS MANAGEMENT

2. TOPICS ORGANISATION AND STRUCTURE PRINCIPLES OF CONTRACT PROCUREMENT OBJECTIVE & PURCHASE POLICY SUPPLY OF SPECIFICATIONS & DRAWINGS SHRIKANT AKREDDIWAR 2 DGS&D MATERIALS MANAGEMENT

3. ORGANISATION AND STRUCTURE 1.1 ORGANISATION AND STRUCTURE: Directorate General of Supplies & Disposals is the Central Purchase Organisation of the Government of India headed by the Director General. It is an attached office under Department of Supply (Ministry of Commerce). It comprises of following main wings: Purchase Quality Assurance Shipping- clearance and forwarding Registration Training and consultancy SHRIKANT AKREDDIWAR 3 DGS&D MATERIALS MANAGEMENT

4. ORGANISATION AND STRUCTURE 1.2 SCOPE AND FUNCTIONS : Purchase and or/inspection of stores for – Central Government Ministries/Departments including their attached and subordinate offices and Union Territories. State Governments , Public Undertakings, Autonomous Bodies, and Quasi-Public Bodies etc. To arrange clearance & shipment of stores against contracts placed by the DGS&D. Registration of manufacturers , suppliers, stockists, Indian Agents of foreign Manufacturers. Training Directorate will arrange training for government departments and Industries in the field of Purchase and Quality Management . SHRIKANT AKREDDIWAR 4 DGS&D MATERIALS MANAGEMENT

5. ORGANISATION AND STRUCTURE 1.3 PURCHASE WING : It carries out procurement action for conclusion of rate contracts and ad-hoc purchases. The major procurement work is handled at Headquarters, New Delhi & the 3 Regional Supply Offices at Mumbai, Chennai and Calcutta have been assigned certain items of R/Cs. The indents for ad-hoc items shall be raised by the indenting departments as per the territorial jurisdiction of each office with following exceptions : Jute and jute products- Centralised at Kolkata . Coir and coir products- Centralised at Chennai . SHRIKANT AKREDDIWAR 5 DGS&D MATERIALS MANAGEMENT

6. ORGANISATION AND STRUCTURE The territorial jurisdiction of the Headquarters office of DGS&D and the Regional offices are given below. Regional Offices at Calcutta, Chennai and Mumbai also arrange clearance of imported cargo at all major ports. SHRIKANT AKREDDIWAR 6 DGS&D MATERIALS MANAGEMENT Sr. No. Office States/UTs 1 DGS&D , New Delhi J&K, Himachal Pradesh, Haryana, Punjab, UP, Rajasthan, UT of Delhi & Chandigarh. 2 Dy. DGS&D ,Calcutta Orissa, Bihar, West Bengal Assam Nagaland, Meghalaya, Manipur, Tripura Arunachal Pradesh, Sikkim, Mizoram, Andaman & Nicobar Island. 3 Dy. DGS&D,Chennai AP, Karnataka, Tamil Nadu ,Kerala , Pondicherry and Lakshadweep 4 Dy. DGS&D,Mumbai Gujarat, Maharashtra, Goa Dadra & Nagar Haveli, MP and Daman & Diu.

7. ORGANISATION AND STRUCTURE 1.4 QUALITY ASSURANCE WING : It provides technical support to the purchase functions. Functions : Formulation of Inspection Policies and Quality Assurance plans . Formulating procurement specifications for contracting. Assessment of vendors. Registration of firms and suppliers registered as manufacturers, Indian agents to foreign manufacturers, etc. Evaluation and certification of the quality of supplies. SHRIKANT AKREDDIWAR 7 DGS&D MATERIALS MANAGEMENT

8. ORGANISATION AND STRUCTURE Continued.... Quality Audit of Supplies at consignees end. Interaction with indenters and industry in the preparation & up-gradation of procurement specifications. Interaction and active participation with BIS . Testing and investigation of failure of Metallurgical products . . As Information centres in the respective states for closer interaction with industry and the state governments. Export Inspection on behalf of friendly countries. SHRIKANT AKREDDIWAR 8 DGS&D MATERIALS MANAGEMENT

9. ORGANISATION AND STRUCTURE 1.5 SUPPORTING UNITS : 1.5.1 PLANNING AND CO-ORDINATION (P&C) UNIT : It deals with policy and procedures relating purchase, quality assurance, disposal and shipping. 1.5.2 INTERNAL WORK STUDY : This unit conducts methods study, staff measurement and keeps watch on speedy disposal of work . 1.5.3 TRAINING AND CONSULTANCY: Training Directorate in consultation with DOPT arranges for training of DGS&D Officers & other organizations. SHRIKANT AKREDDIWAR 9 DGS&D MATERIALS MANAGEMENT

10. ORGANISATION AND STRUCTURE 1.5.4 MANAGEMENT INFORMATION SERVICES (MIS) : MIS Directorate acts as operational-cum-intelligence unit maintains the database of pre and post contract operations . The MIS Directorate brings out brochures on DGDS&D purchases, bulletin on market prices & annual administration report of DGS&D. 1.5.5 PUBLIC GRIEVANCES AND PUBLIC RELATIONS CELL 1.5.6 MARKET INTELLIGENCE CELL (MIC) AND COST CELL : MIC gathers and compiles information on suppliers, price, price trends of various items on R/C. Cost Cell functions under the officer in-charge of IF Wing of DGS&D and it draws expertise from Purchase & Quality Assurance Wing for performing its duties. Cost Cell function is to analyse and work out the reasonable cost by comparing R/C prices with market prices. SHRIKANT AKREDDIWAR 10 DGS&D MATERIALS MANAGEMENT

11. ORGANISATION AND STRUCTURE 1.5.7. INTEGRATED FINANCE (IF) WING : A complement of the officers of the Integrated Finance Wing of the Department of Supply is posted in the DGS&D. This complement includes one Dy.Director (Cost) drafted from the office of the Chief Advisor (Cost), Ministry of Finance , to advise the DGS&D on matters of cost fixation of price and formulation of price variation clauses etc . 1.5.8 LEGAL WING 1.5.9 ADMINISTRATION WING 1.5.10 VIGILANCE WING 1.5.11 LIAISON CELLS : Railway & NSIC maintains a Liaison Cell in DGS&D to facilitate proper interaction with DGS&D in respect of their procurement of items through DGS&D Contracts. SHRIKANT AKREDDIWAR 11 DGS&D MATERIALS MANAGEMENT

12. PRINCIPLES OF CONTRACT 2.1 INTRODUCTION : The Contract Manual of DGS&D gives information with regards to the elements and principles of contract law and meaning of various legal terms. 2.2 ELEMENTARY LEGAL PRACTICES : What is a Contract? The proposal or offer when accepted is a promise, a promise and every set of promises forming the consideration for each other is an agreement, and an agreement if made with free consent of parties competent to contract, for a lawful consideration and with a lawful object is a contract. SHRIKANT AKREDDIWAR 12 DGS&D Accepted Free consent Lawful MATERIALS MANAGEMENT

13. PRINCIPLES OF CONTRACT ELEMENTS OF CONTRACT : (a) Competency of the parties. (b) Freedom of consent of both parties. (c) Lawfulness of object . 2.3 COMPETENCY OF PARTIES : Under law any person who has attained majority and is of sound mind or not debarred by law to which he is subject, may enter into contracts. CATEGORIES OF PARTIES ENTERING INTO CONTRACT : (a) Individuals (b) Partnerships (c) Limited Companies (d) Corporations other than limited companies. SHRIKANT AKREDDIWAR 13 DGS&D MATERIALS MANAGEMENT

14. PRINCIPLES OF CONTRACT 2.4 CONSENT OF BOTH PARTIES : Chances of misunderstanding relates to – Identity of the other party to the agreement, Nature or terms of the transactions , Subject matter of the agreement . 2.5 LAWFULNESS OF OBJECT : The object of an agreement must be lawful (not opposed to public policy). SHRIKANT AKREDDIWAR 14 DGS&D MATERIALS MANAGEMENT

15. PRINCIPLES OF CONTRACT 2.6 ACCEPTANCE OF AN OFFER : The tender is accepted within given time limits , only if the terms of the offer and the acceptance are same & lawful . 2.7 WITHDRAWAL OF AN OFFER & IT’S ACCEPTANCE : Proposer may withdraw its offer at any time before its acceptance, keeping informed the accepting authority. However some offers cannot be withdrawn before the expiry of the specified date, for which earnest money is deposited. SHRIKANT AKREDDIWAR 15 DGS&D MATERIALS MANAGEMENT

16. PRINCIPLES OF CONTRACT 2.8 DISCHARGE OF CONTRACTS: A contract is discharged or the parties are normally freed from the obligation of a contract by due performance of the terms of contract . A contract may also be discharged:- By mutual agreement. By breach. By refusal of a party to perform. In a contract where there are reciprocal promises. SHRIKANT AKREDDIWAR 16 DGS&D MATERIALS MANAGEMENT

17. PRINCIPLES OF CONTRACT 2.9 STAMPING OF CONTRACTS : Under Article 5 of the Indian Stamp Act , the agreement for sale of goods (not being sold through a broker) is exempt from payment of stamp duty. Cases in which government would be liable are set out in Section 29 of the Act. 2.10 AUTHORITY FOR EXECUTION OF CONTRACTS : The DGS&D officers are authorised by the President of India in exercise of the powers conferred by Clause (I) of Article 299 of the Constitution to make contracts for services, supply or work on behalf of the Central Government. DGS&D makes similar contracts on behalf of the State Governments , PSUs & local bodies as per their request. SHRIKANT AKREDDIWAR 17 DGS&D MATERIALS MANAGEMENT

18. PRINCIPLES OF CONTRACT 2.11 Governing law in purchases made by DGS&D : All purchases made and contracts entered by the DGS&D are governed by the Sales of Goods Act, 1939 and the Indian Contract Act, 1872. 2.12 General guidelines for entering into contracts by the DGS&D : No work of any kind should be commenced without prior execution of contract documents . The terms of a contract must be precise & free from ambiguity. Provision for recovery of liquidated damages for defaults on the part of the contractor. SHRIKANT AKREDDIWAR 18 DGS&D MATERIALS MANAGEMENT

19. PRINCIPLES OF CONTRACT In selecting the tender to be accepted, the financial status of the individuals and firms tendering must be taken into consideration in addition to all other relevant factors. Where escalation in respect of labour overheads, customs duties, freight etc is provided for in a contract, the basis for the calculation of the same should be clearly indicated . Lump sum contract should not be entered into except in cases of absolute necessity. SHRIKANT AKREDDIWAR 19 DGS&D MATERIALS MANAGEMENT

20. PROCUREMENT OBJECTIVE & PURCHASE POLICY 3.1 PROCUREMENT OBJECTIVE : The main objectives of public buying are :- To procure stores of specified quantity and specified quality . To procure stores on a competitive basis at the lowest reasonable price. To procure stores with a planned timely delivery . SHRIKANT AKREDDIWAR 20 DGS&D MATERIALS MANAGEMENT

21. PROCUREMENT OBJECTIVE & PURCHASE POLICY 3.2 PURCHASE POLICY : As per the guidelines of General Financial Rules (GFR) the purchase policy features are : To make purchase of stores for public service to encourage indigenous production. To provide price and/or purchases preference upto a specified limit to Cottage & Small Scale Industries and PSU over private industries To ensure quality of products and timely supplies. 3.3 TYPES OF PREFERENCES Product Reservation Purchase Preference Price Preference SHRIKANT AKREDDIWAR 21 DGS&D MATERIALS MANAGEMENT

22. PROCUREMENT OBJECTIVE & PURCHASE POLICY 3.4 PRODUCT RESERVATION PURCHASE OF KHADI FROM KVIC : All Khadi Items ( confirming IS specifications) are reserved for exclusive purchase from KVIC. List of all such khadi items is given in Annexure-3 . The purchases of Khadi items from the KVIC is made by the DGS&D on single tender basis at the rates fixed by Certification Committee and these rates are reviewed by Costs Accounts Branch of MOF. SHRIKANT AKREDDIWAR 22 DGS&D MATERIALS MANAGEMENT

23. PROCUREMENT OBJECTIVE & PURCHASE POLICY 3.5 Purchase Of Handloom Textiles Items Including Barrack Blankets from KVIC/ACASH : All items of handloom textiles required by Central Government Department are exclusively purchased from KVIC and the additional demand fulfilled by Association of Corporations and Apex Societies of Handloom (ACASH) , as per list given in Annexure-4 . SHRIKANT AKREDDIWAR 23 DGS&D MATERIALS MANAGEMENT

24. PROCUREMENT OBJECTIVE & PURCHASE POLICY Continued.... These purchases are made on single tender basis . In the case of ACASH, the final prices will be calculated by ACASH and fixed by the Ministry of Textiles by associating with Department of Expenditure, Ministry of Finance. The DGS&D will enter into a one time long term contract with ACASH. Payment terms for ACASH notified units will be the normal DGS&D payment terms, i.e. 95% payment on inspection & proof of dispatch and balance 5% after receipt of stores by consignee, within delivery period and on price finalization, if any. SHRIKANT AKREDDIWAR 24 DGS&D MATERIALS MANAGEMENT

25. PROCUREMENT OBJECTIVE & PURCHASE POLICY Continued.... KVIC/ACASH are treated equally with SSI units registered with DGS&D/NSIC. Both are exempted from payment of Performance Security Deposit . However, these facilities are not applicable to State KVI Boards . Purchase of Khadi & Handloom Textile items will be made by inviting sealed tenders. SHRIKANT AKREDDIWAR 25 DGS&D MATERIALS MANAGEMENT

26. PROCUREMENT OBJECTIVE & PURCHASE POLICY 3.6 Items Reserved for Procurement from SSI Presently, 358 items are reserved for exclusive purchase from Small Scale Industries (SSI), as per list given in Annexure-5 . This list is periodically reviewed by Standing Review Committee set up under the Chairmanship of Secretary(Supply) with Development Commissioner (SSI) as the Member-Secretary . In the process of procurement other things being equal, the purchases preference would be in order of KVIC/ACASH/SSI. SHRIKANT AKREDDIWAR 26 DGS&D MATERIALS MANAGEMENT

27. PROCUREMENT OBJECTIVE & PURCHASE POLICY 3.7 Procurement Of Other Items Not So Reserved For the items falling under this category PSUs and Large Scale Private Industries will also be invited to participate. 3.8 Price Preference : 3.8.1 The offers of the SSI get price preference up to 15% over the lowest acceptable offer from the large scale private sector units. 3.8.2 Price preference admissible to SSI will be accorded on a tender to tender basis , on merits of each case. SHRIKANT AKREDDIWAR 27 DGS&D MATERIALS MANAGEMENT

28. PROCUREMENT OBJECTIVE & PURCHASE POLICY 3.8.3 Price preference is not granted in following cases : Where competition exists amongst the SSIs alone or where the items are exclusively reserved for purchases from SSI Units; & Where the tenders are received from both the SSI Units and large scale units and the lowest offers are from SSI units and their capacity is more than adequate to meet the demand in hand. 3.9 Small Scale Units When They Quote In Group : The offer quoted by NSIC/State Development Corporation on behalf of some SSI Units will be considered as an offer from SSI Unit registered with the DGS&D/NSIC except for items like Paints for Railways, Drug, Defence goods, Medical equipments, etc . SHRIKANT AKREDDIWAR 28 DGS&D MATERIALS MANAGEMENT

29. PROCUREMENT OBJECTIVE & PURCHASE POLICY 3.10 Industrial Co-operative Apex Units : The Co-operative Societies and Industrial Cooperatives making the products of cottage at the District , Regional and State level & having the central Apex Units. If they satisfy the definition of SSIs, then Co-operative Societies should be given preference over other SSIs. 3.11 Purchases Preference : Purchase Preference would be applicable - To PSUs , if a PSUs quotes a price upto 10% higher than the top price at which rate contract is decided. To SSIs, if SSIs quote a price upto 5% over the PSUs . SHRIKANT AKREDDIWAR 29 DGS&D MATERIALS MANAGEMENT

30. PROCUREMENT OBJECTIVE & PURCHASE POLICY A PSU would not be entitled to any Price Preference when it quotes as an agent of an Indian or foreign manufacturer/supplier. However, where a PSU is selling goods or services of another PSU it would be allowed the benefit of price preference. The Private sector is not be eligible for Price preference. The above policy of purchases preference is not applicable to State Government PSUs. When a PSU defaults either in the delivery schedule or does not complete particular project satisfactorily, that PSU need not be shown purchase preference for a period of 3 years . SHRIKANT AKREDDIWAR 30 DGS&D MATERIALS MANAGEMENT

31. SUPPLY OF SPECIFICATIONS & DRAWINGS 4.1 SPECIFICATIONS : DGS&D reviews & upgrades purchase specifications as per- IS specifications when the relevant product specifications are comprehensive and complete to enter into contracts. Indenter's specifications. DGS&D specifications/Drawings which are developed in line with requirements of the user departments . Standard specifications formulated by major departments like Defence , Railways, P &T, etc. SHRIKANT AKREDDIWAR 31 DGS&D MATERIALS MANAGEMENT

32. SUPPLY OF SPECIFICATIONS & DRAWINGS 4.2 Specifications & Drawings to be expressed in Metric system : Under the Standards of Weight & Measures Act, 1956 , the metric system of weights and measures was introduced in respect of the description of stores, drawings, specifications, etc. 4.3 Preparation of DGS&D Specifications & Drawings : The Quality Assurance Wing at Headquarters is responsible for the preparation of the DGS&D standard specification/Drawing for a product with reference to available national or international standards made on aspects like methods of testing, sampling plans , etc. All Drawings prepared by the Quality Assurance Wing shall be numbered and approved by an officer not below the rank of Director(QA) before being issued/sent out. SHRIKANT AKREDDIWAR 32 DGS&D MATERIALS MANAGEMENT

33. SUPPLY OF SPECIFICATIONS & DRAWINGS 4.4 Sale of DGS&D specifications & Drawings at its Head Quarters at New Delhi and its Regional centres. 4.5 Registration of DGS&D specifications & Drawings is done by the Quality Assurance Wing. 4.6 Focal Officers : The officers in-charge of Tender Sales of DGS&D centres and the field QA stations shall be responsible for Maintenance & selling of an up-to-date list of DGS&D specifications and drawings for the stores which are purchased through the agency of DGS&D. SHRIKANT AKREDDIWAR 33 DGS&D MATERIALS MANAGEMENT

34. THANK YOU SHRIKANT AKREDDIWAR 34 DGS&D MATERIALS MANAGEMENT

35. Questions Que.1) Explain in detail about Organisation and structure of DGS&D. Que.2) Explain in detail about the principles of contract followed by DGS&D. Que.3) Explain in detail about the product reservation followed by DGS&D. Que.4) Explain in detail about the price & purchase preference followed by DGS&D. Que.5) Write short note on : DGS&D Specifications and Drawings. SHRIKANT AKREDDIWAR 35 DGS&D MATERIALS MANAGEMENT