Mmao 715 PDF

MMD PROCUREMENT MANUAL
FOR
NON-AIRCRAFT MATERIALS AND SERVICES
MMAO 715
AIR INDIA LTD.

MATERIALS MANAGEMENT DEPARTMENT
MMAO 715
Materials Management Department
TABLE OF CONTENTS
Table of Contents ............................................................................................................. 2
I. Preamble .................................................................................................................... 6
II. MMD – Vision & Mission ........................................................................................... 7
III. MMD Objectives ........................................................................................................ 8
IV. MM Cadre Officers’ Pledge/ Oath ............................................................................. 9
V. Abbreviations and Acronyms ................................................................................... 10
VI. Major Contracts under the purview of MMD .......................................................... 12
VII. Major Contracts not under the purview of MMD ................................................... 13
1. Cash Purchases upto ₹ 10,000/- .............................................................................. 14
2. Procurements between ₹ 10,001 and ₹ 50,000 – through GeM Portal .................. 15
3. Procurements between ₹ 10,001 and ₹ 50,000 – through SAP .............................. 17
4. Shopping Cart/Purchase Requisitions for Procurements – Above ₹ 50,000/- ........ 18
5. Tender fee ................................................................................................................ 22
6. Modes of Procurement & Bidding - Tendering Process .......................................... 23
7. Bid System ................................................................................................................ 30
8. e-Procurement ......................................................................................................... 31
9. Reverse Auction ....................................................................................................... 33
10. Spot Purchase by Spot Purchase Committee .......................................................... 36
11. Trial / Development Order ....................................................................................... 39
12. Public Procurement Policy for Micro and Small Enterprises (MSEs) ....................... 40
13. Make In India ........................................................................................................... 43
14. Integrity Pact & IEM ................................................................................................. 50
15. Time Frames for Quotes .......................................................................................... 51
16. Extension of Tender Due/Close Date ....................................................................... 52
17. Tender Document .................................................................................................... 54
18. Turnover Criteria ...................................................................................................... 62
Date of Issue: 15th March 2018 2

MMAO 715

19. Bids from OEM/Authorized Distributors / Dealers/Channel Partners .................... 63
20. Submission and Custody of Tender Quotations/ Bids ............................................. 65
21. Earnest Money Deposit (EMD) / Bid Security .......................................................... 66
22. Security Deposit/ Performance Bank Guarantee .................................................... 68
23. Sampling................................................................................................................... 71
24. Bid Receiving and Opening ...................................................................................... 73
25. Evaluation of Technical Bids .................................................................................... 76
26. Evaluation of Price Bids/ Award Criteria.................................................................. 79
27. Retendering /Calling for Price Bids .......................................................................... 81
28. Loading Criteria in case of Deviation ....................................................................... 82
29. Return of Bids of Disqualified Bidders/ Bids Received Late..................................... 83
30. Submission of Documents ....................................................................................... 84
31. Termination and Exit Clause .................................................................................... 85
32. Negotiations ............................................................................................................. 86
33. Composition of Tender Committee ......................................................................... 88
34. Liquidated Damages/Penalty Clause ....................................................................... 90
35. Role of TC Members................................................................................................. 93
36. Time Frame for Completion of Tender Evaluation .................................................. 95
37. Extension of Period of Contracts/Purchase Order .................................................. 97
38. Repeat Contracts/Orders ......................................................................................... 98
39. Emergency Purchases by the Departments ............................................................. 99
40. Waiver of Purchase Procedure .............................................................................. 100
41. Buy Back Option ..................................................................................................... 102
42. Publishing of Details of Award of Contracts / PO on the Website ........................ 104
43. Purchase Order Amendments ............................................................................... 105
44. GST & Other Govt Levies and Taxes....................................................................... 106
45. Payment Terms ...................................................................................................... 107
46. Advance Payment .................................................................................................. 108
47. Exchange Rate ........................................................................................................ 110

MMAO 715

48. Stores Inspection / Production Sample ................................................................. 111
49. Pre Delivery / Dispatch Inspection ......................................................................... 113
50. Variation of Quantity ............................................................................................. 114
51. Option Clause ......................................................................................................... 115
52. Excess Supply ......................................................................................................... 116
53. Fall Clause .............................................................................................................. 117
54. Force Maejure ........................................................................................................ 118
55. Dispute Resolution ................................................................................................. 119
56. Receipt Certification- for MMD Generated POs .................................................... 121
57. Invoice Processing-For MMD Generated POs ....................................................... 122
58. Standardization ...................................................................................................... 123
59. Material Rejection Intimation ................................................................................ 124
60. Budgeting ............................................................................................................... 125
61. Contract Administration ........................................................................................ 126
62. Vendor Registration ............................................................................................... 128
63. Suspension of Business .......................................................................................... 129
64. Banning of Business ............................................................................................... 130
65. Purchasing at Regions ............................................................................................ 131
66. Delegation of Authority ......................................................................................... 132
67. Annexure ................................................................................................................ 133
Annexure A - Financial Powers .............................................................................. 134
Annexure B - Format for Details of Contract Awarded During the Month (Above ₹ 10
Lakh) ....................................................................................................................... 135
Annexure C - Bank Guarantee Format for SD/PBG ................................................ 136
Annexure D - Items Reserved for SSI / Handicrafts Sector .................................... 138
Annexure E - Loading Criteria ................................................................................ 151
Annexure F - Undertaking by TC Evaluation Members.......................................... 153
Annexure G - Letter of Authorization for Attending Bid Opening ......................... 154
Annexure H - Bid Opening Attendance Sheet........................................................ 155

MMAO 715

Annexure I - Return of Bids .................................................................................... 156
Annexure J - Letter of Authorization for Attending Pre-Bid Conference .............. 158
Annexure K - Pre Bid Meeting – Attendance Sheet ............................................... 159
Annexure L - Undertaking for Payment to be made against duplicate Challan/ Invoice
................................................................................................................................ 160
Annexure M - Negotiation Sheet ........................................................................... 161
Annexure N - Check list While Creating the Shopping Cart ................................... 162
Annexure O - Integrity Pact................................................................................... 163
Annexure P - Proprietary Article Certificate .......................................................... 180
Annexure Q - Undertaking From Bidders .............................................................. 181
Annexure R - General Sequence of Clauses in Tender Terms ............................... 182

MMAO 715

I. PREAMBLE
A unified set of procedures for procurement of non-aircraft material and services for
the then merged entity was issued in the year 2009 vide MMD’s Administrative Order
- MMAO 684. The document served and aided the process in MMD quite satisfactorily.
With passage of time, the need is felt to review and reissue consolidated MMAO
afresh considering:
 Companywide Adoption of SAPERP system and implementation of MM/ SRM
modules for core MM functionalities.
 To follow the reverse auction functionality / features developed in SAP-SRM
module on case merits.
 Revision / amendments to GFR guidelines as also issuance of set of other
norms / rules by the regulating agencies.
 Introduction of GeM -a GOI portal for the public procurement which has
evolved in the recent past and has effectively replaced the e/w DGS&D rates
contract base system in sync with revised GFR.
 Focus on “Make in India “and issuance of the policy guidelines and initiatives
on public procurement under the “Make in India”
 Issuance of the revised / new delegation of corporate financial powers in the
company – same have been suitable reflected in the MMAO for the TC
composition and approval authority matrix.
 To incorporate and adopt emerging new trends & practices in procurement
and material management domain
 The consolidated revised MMAO to serve as a single reference document for
procurement in Non-Aircraft Division to facilitate better understanding and
decision making, increase efficiency, impart transparency and overall have
greater accountability in the procurement process as a whole.
This broad-based provision has been compiled with inputs / suggestions from key
stake holders of the organization, vetted by the Finance, and approved by competent
authority. The final text of the updated MMAO is being issued and be adhered to in
MMD across all Regions / Divisions / Section of MMD for Non-Aircraft procurement.
The above MMAO will come into effect from 15th March 2018.
P. S. Negi
Executive Director – MM
*****

MMAO 715

II. MMD – VISION & MISSION
VISION
To provide cost effective, timely and efficient services in procurement of
quality supplies and services to our internal and external customers, in
support of the airline’s vision, mission, goal and values.
 To adopt the best and latest global practices in line with Airline
industry standards.
 Change is a continuing process and hence constant transformation
and embracing of new ideas and technology, in tune with times.
MISSION
 Enhance productivity and product quality.
 Optimize process lead time and keeping compliances of rules and
regulations.
 Reduce stock outs and optimize inventory holding / carrying cost.
 Improve business credibility with ethical conduct, professional
integrity and transparency in MM business transaction.
*****

MMAO 715

III. MMD OBJECTIVES
 ON TIME MATERIALS/SERVICES AVAILABILITY AT THE RIGHT PRICE,
RIGHT QUANTITY, RIGHT SOURCE.
 BUDGETARY CONTROL
 JUSTIFIED INVESTMENT
 EFFECTIVE MANAGEMENT
 CORPORATE ERP
 TOTAL QUALITY
 INDIGENISATION (MAKE IN INDIA)
 VENDOR DEVELOPMENT (0NGOING BASIS)
 EVALUATION, TRAINING & DEVELOPMENT OF PERSONNEL
 SALVAGE & DISPOSAL
*****

MMAO 715

IV. MM CADRE OFFICERS’ PLEDGE/ OATH
 I will act with utmost honesty, integrity and pursue my work in an ethical manner.
 I will discharge my duties and functions in a transparent manner without fear,
favour, bias, through a just and equitable manner.
 I will uphold laws and contract covering my own conduct and that of my enterprise.
 I will strive for my own development and also of other officers and colleagues in my
supervision, so that MM profession continues to grow and contribute to the cause
of the Company and of society.
 I will imbibe good practices for sustainable economic, social and environmental
prosperity and promote competitiveness in procurement.
 I will abide by Statues, rules and regulation which may be applicable and relevant to
the MM activities carried out in enterprise
 I will exercise due diligence while discharging my functions to optimize overall
material cost, inventory holdings, minimize resources waste, maximize the value for
procurement expenditure, and endeavor for safety and security of company
material.
 I will respect the views of others and appreciate the individual differences, if any,
while interacting with colleagues, suppliers and customers with courtesy dignity and
respect.
I shall remain committed, and make this pledge freely upon my honour.
Note: The oath will be administered by respective MM admin / sectional heads to

each MM officer once, on joining at grade Asst. Manager and above.
****

MMAO 715

V. ABBREVIATIONS AND ACRONYMS
AMC - Annual Maintenance Contract
BG - Bank Guarantee
BIS - Bureau of Indian Standards
CA - Competent Authority
CPPP - Central Public Procurement Portal
CVC - Central Vigilance Commission
DGS&D - Director General of Supplies & Disposal
DFP - Delegation of Financial Power
ECS - Electronic Clearing System
EMD - Earnest Money Deposit
EUR - Euro
EOI - Expression of Interest
EPFO - Employees Provident Fund Organization
ESIC - Employees State Insurance Corporation
FM - Force Majeure
GeM - Govt e-Marketplace
GTC - General Terms & Conditions
IATA - International Air Transport Association
IEM - Independent External Monitor
INR - Indian Rupees
IP - Integrity pact
LRS - Local Receipt Section
MSME - Micro, Small and Medium Enterprises
NBRS - Non Bonded Receipt Section
NEFT - National Electronic Fund Transfer
NIT - Notice Inviting Tender
NSIC - National Small Industries Corporation
OEM - Original Equipment Manufacturer
PAC - Proprietary Article Certificate
PBG - Performance Bank Guarantee
PO - Purchase Order
PQC - Prequalification Criteria
PR - Purchase Requisition
PVC - Price Variation Clause
QAC - Quality Assurance Certificate
RA - Reverse Auction
RC - Rate Contract
RFx - Request for Quote/Information
RTGS - Real Time Gross Settlement
SC - Shopping Cart
SD - Security Deposit

MMAO 715

SLA - Service Level Agreement
SPC - Spot Purchase Committee
SSI - Small Scale Industries
TC - Tender Committee
TER - Technical Evaluation Report
TS - Technical Specifications
USD - US Dollars
*****

MMAO 715

VI. MAJOR CONTRACTS UNDER THE PURVIEW OF MMD
 All Stock items that are held in store houses under the purview of MMD.
 In-flight Provisioning items both Bonded and Non-Bonded
 Office equipment and assets (Purchases and repairs)
 Canteen commodity purchases, equipment
 Medicines and medical equipment
 Engineering workshop test/calibrating equipment and spares
 ATF for test house
 Petrol and Diesel for Air India equipment and vehicles
 Oils, gases, grease and lubricants for workshop equipment
 IT Hardware, software and AMCs
 Commercial stock items such as plywood, slotted angles, aluminum sheets,
polythene rolls, strapping rolls, dusters, hardware and plumbing items etc.
 Printing of Revenue documents such as AWBs, tickets, MCOs, EBTs, baggage tags,
boarding cards etc.
 Printing of menu cards, safety cards and timetables.
 All types of stationery and paper items.
 Uniforms, including monsoon and safety equipment.
 Tailoring contracts for all cadres.
 Hardware, paints, epoxy coatings and extrusions.
 General tools, jigs and fixtures.
 Technical books, literature and magazine subscription for all departments.
 Aircraft Test Equipment and test Programmed packages.
 AMCs of X-ray machines and explosive detection machines for security.
 Vehicles, spares and maintenance for Air India
*****

MMAO 715

VII. MAJOR CONTRACTS NOT UNDER THE PURVIEW OF MMD
 ATF for aircrafts
 Insurance
 Catering meal contracts
 Hotel contracts
 Leasing of Aircrafts & Engines
 Ground Handling Contracts
 Ground Handling Equipment and spares
 Housekeeping contract
 Outsourcing contracts of continuous deployment of vendor’s personnel in Air India
premises/duty
 Facility Management Contracts
 All contracts and AMCs currently under the purview of P&F, Civil Engineering, EFD
and EFPM
 Consultancy Services
 Any other procurement not initiated by MMD
*****

MMAO 715

1. CASH PURCHASES UPTO ₹ 10,000/-
1.1. Applicable to purchases up to a maximum of ₹ 10,000/-.
1.2. Individual departments will be responsible for handling their own cash
purchases and coordinating with the Finance department for
advances/reimbursements thereof as the case may be. MMD will not be
involved in cash purchase for any department other than their own.
1.3. The respective departments would be responsible to set up their own
internal mechanism to handle cash purchases.
1.4. Payment / reimbursement would be subject to the proof of delivery, i.e.
delivery challan duly signed / certified by the competent authority of the
concerned department, along with the party’s / vendor’s invoice / cash
memo.
1.5. The competent authority of the department concerned will be
responsible to ensure that approvals are not given for purchase of items
of recurring nature and capital items.
1.6. The competent authority must also ensure that the splitting of bills is
not done for keeping the value below ₹ 10,000/-.
1.7. In case of cash purchases, Purchase Order(s) would not be issued.
1.8. The monthly float levels for cash purchases for all departments would
be decided by respective departments in consultation with Finance
Department / Regional Finance office.
*****

MMAO 715

2. PROCUREMENTS BETWEEN ₹ 10,001 AND ₹ 50,000 –
THROUGH GEM PORTAL
2.1. Procurement of individual items up to ₹ 50,000/- will be done by the
individual departments through the online GeM portal which has been
mandated by GOI as per GFR 2017, rule 149. (Refer procurement of
goods 2017 point 4.17).
2.2. Wherever items/services available under GeM and which meet the
requisite quality, specification and delivery period the respective
departments would directly place the order through the GeM portal.
The detailed process of GeM can be viewed on their website
https://gem.gov.in The gist of the salient points that need to be
followed for procurement through GeM in Air India are as follows:
2.2.1. ED-MM would be the primary user for procurement of
items/services for Air India through GeM portal.
2.2.2. Departments / Regions to appoint nodal officers for
procurement of goods and services through GeM and convey
the same to initiate secondary user creation process.
2.2.3. The nodal officers to complete the self-guided registration
process as Buyers and Consignees for procurement of Goods /
Services under GeM.
2.2.4. Thereafter, the nodal officers would be responsible for
procurement and receipt of items/ services through GeM
portal.
2.2.5. In the case of capital items, the nodal officers should ensure
that the AR process is completed and Asset codes generated
prior to release of the purchase order through GeM.
2.2.6. The procuring authorities will certify the reasonability of rates.
2.2.7. The Purchase Order will be generated automatically in the GeM
portal and no separate purchase orders would be required in
SAP system.
2.2.8. Once the items/ services are received by the user department
against the GeM PO, the nodal officers should complete the

MMAO 715

receipt and acceptance process online in the GeM portal within
10 days as per the guidelines issued by GeM.
2.2.9. Thereafter, the nodal officers should forward the copy of the
GeM PO along with certified invoice and Asset code numbers
in case of assets, to Finance for payment purposes.
2.2.10. The payments are to be released by Finance within a maximum
of 10 days of receipt of goods/services or as mandated by GeM
time to time.
2.3. The nodal officers should ensure that only genuine procurements that
are required by the departments are done through GeM.
2.4. The nodal officers should submit the details of items/ services procured
through GeM to the head of the department/ region on monthly basis.
2.5. MMD will not be associated in procurement of any items that are
available in GeM and is below ₹ 50,000/-.
2.6. Depending upon the merit of the case, for procurement above ₹
50,000/- by MMD, AGM and above, as given in Annexure A - Column 2,
would be the competent authority to authorize procurement through
GeM (Not applicable for procurement by other departments).
*****

MMAO 715

3. PROCUREMENTS BETWEEN ₹ 10,001 AND ₹ 50,000 –
THROUGH SAP
3.1. Only in case the required materials/services whose procurement value
is estimated up to ₹ 50,000/- are not available in GeM, the user
departments may raise shopping cart for such procurements in the SAP
system.
3.2. If it is observed that the item(s)/ services as indented through shopping
cart are available in GeM or are priced below ₹ 50,000/- in GeM, the
shopping cart would be returned to the user.
3.3. For items/ services up to ₹ 50,000/- and not available in GeM, a
minimum of 3 quotations will have to be obtained by way of fax, email,
letter, etc. However, this may be dispensed with in the case of
proprietary/ brand approved items.
3.4. SAP Purchase(s) order will thereafter be issued.
3.5. Payments would be made by cheque, ECS, NEFT by the Finance
Department. However, in exceptional circumstances, which are to be
recorded in writing, cash payment not exceeding ₹ 20,000 may be
authorized by the competent authority (CA) in the Materials
Management Department not less than the rank of Asst. General
Manager.
*****

MMAO 715

4. SHOPPING CART/PURCHASE REQUISITIONS FOR
PROCUREMENTS – ABOVE ₹ 50,000/-
4.1. Shopping Cart/ Purchase Requisitions will be raised by the user
department.
4.2. If the item is capital in nature, the user must first raise Appropriation
Request (AR) in FI module and obtain Asset codes before raising the
shopping cart. The asset codes must be entered in the shopping carts
without which purchase process will not be initiated.
4.3. For stock items (recurring use), requisitions would be triggered by the
SAP system, wherever Min / Max levels or reorder levels are maintained
for automatic generation of the PRs, for further processing by the Buyer.
In case of stock items, where the levels are not maintained, the planners
of the user department would raise the PRs manually.
4.4. Providing details such as complete specifications, detailed scope of
work, drawings, BIS Number, Pre-qualification criteria, Evaluation
criteria, requirement of sample, special packing and markings, shelf life,
Service Level Agreements (SLA), warranty requirements, delivery
schedule, pre-delivery inspection, requirement of a Pre-Bid conference,
and any other relevant details should be provided by the user
department along with the shopping cart/Requisition. The Materials
Management Department will not be responsible for vetting or
authenticating such requirements as provided by the user departments.
A checklist for the requirements to be submitted along with the
shopping cart is as per Annexure N.
4.5. The technical specifications should be unambiguous, precise, objective,
functional, broad based/generic, standardised (for items procured
repeatedly) and measurable. TS should be broad enough to avoid
restrictions on workmanship, materials and equipment commonly used
in manufacturing similar kinds of goods.
4.6. The Technical Specifications (TS) constitute the benchmark for
responsiveness of bid and subsequent evaluation. The user department
therefore should ensure that the specifications:

MMAO 715

4.6.1. Provides a level playing field and ensures the widest
competition.
4.6.2. Set out the required technical, qualitative and performance
characteristics to meet just the bare essential needs of the user
without including superfluous and non-essential features,
which may result in unwarranted expenditure.
4.7. Wherever applicable, Standards set by Bureau of Indian Standards (BIS)
to be forwarded by user which should be incorporated in the tender. In
the absence of BIS standards, TS may be based on the relevant
International standards, provided that an indenting authority may, for
reasons to be recorded in writing, base the TS on equivalent
international standards even in cases where BIS standards exist. For any
deviations from BIS or for any additional parameters for better
performance, specific reasons for deviations/modifications should be
duly recorded with the approval of the CA. Where the technical
parameters are only marginally different, Indian standards may be
specified and the user specification/s could cover only such additional
details as packing, marking, inspection, and so on, as are specially
required to be complied for a particular end use.
4.8. All dimensions incorporated in the specifications shall be indicated in
metric units. If due to some unavoidable reasons, dimensions in FPS
units are to be mentioned, the corresponding equivalents in the metric
system must also be indicated.
4.9. The delivery period along with the tolerance for the same should be
clearly spelt out. The tolerance period would be taken into
consideration for calculating the loading on the price bid.
4.10. For all IT related purchases, both Hardware and software the user
should route the requirement through DIT who would authenticate and
approve the requirement. Only on the approval of DIT would MMD
initiate purchasing action. In such cases IT member will also be a part of
the TC.

MMAO 715

4.11. For all vehicle related purchases, the user should route the requirement
through GSD who would authenticate and approve the requirement.
Only on the approval of GSD would MMD initiate purchasing action. In
such cases GSD member will also be a part of the TC.
4.12. The estimated cost in the indent is a vital element in procurement
processes, approvals and establishing the reasonableness of prices at
the time of evaluation of bids. It will therefore be responsibility of the
user department to ascertain the estimated cost through past
procurement history, market survey or budgetary quotations from one
or more prospective suppliers or by any other methodology that is
appropriate. The estimated cost/ value of the items requisitioned
should be provided /reflected by the user in the shopping cart. The base
papers for arriving at the estimated cost should be maintained by the
user for any future reference by any agency.
4.13. If the L1 rate obtained is higher than the estimated cost indicated in the
shopping cart raised by the user by 25% or above, then the user to be
informed of the same and their approval taken before placing the
contract/order.
4.14. The buyers should scrutinize the shopping cart/ requisitions received
from the user departments. In case the shopping cart is incomplete in
any respect or the requisite data required by MMD is not provided, then
MMD should ask for clarification / requisite information from the user.
If the same is not received within 7 days of the query/s then the
shopping cart should be returned / closed. In such a scenario, user
department would be required to submit a new shopping cart with the
complete details.
4.15. If during scrutiny of the shopping cart/ requisition, it is observed that
the user department has already processed the requirement by
obtaining quotations and approvals and has finalized the vendor, but
requires the release/ regularization of the contract/PO, then such
shopping cart/ requisitions are to be returned back and no further
action from MMD is required. Such requirements should be handled

MMAO 715

directly by the user department and invoices settled directly with
Finance.
4.16. Wherever applicable the user should provide justification / cost benefit
analysis for the procurement of items/ services/lease, along with the
shopping cart/Requisition. The user department should get the cost
benefit analysis vetted/ratified by Finance Department. The user
department may, if required, take the help of any other departments,
as deemed fit for preparation of cost benefit analysis.
4.17. In case of the outcome being a contract, the indenters need to provide
the detailed information as specified above through an email to the
concerned buyer. Once the contract is released, the indenter would be
required to create shopping cart/ purchase requisition referring to the
contract to release the purchase order, as per the terms of the contract.
4.18. For release of Contract/ Purchase Order, the requirements/ shopping
carts must reach the buyers at least 90 days in advance to allow
processing of the same as per the guidelines.
*****

MMAO 715

5. TENDER FEE
5.1. As a policy, for any tender issued by Materials Management
Department, the tender fee will not be applicable irrespective of the
value of the tender.
*****

MMAO 715

6. MODES OF PROCUREMENT & BIDDING - TENDERING
PROCESS
The tender processes would be of the following four types:
6.1. Single tender basis:
6.1.1. The Single Tender process may be adopted in the case of the
following:
6.1.1.1. OEM / Proprietary procurement.
6.1.1.2. Procurement on Approved brand basis.
6.1.1.3. Procurement on single/multiple source /approved basis.
6.1.1.4. The Single tender can be of any value.
6.1.2. The onus of declaration of an item as proprietary would be with
the user department. In the case of services i.e. AMCs/ repairs,
the needful services can be obtained from the OEM of the
equipment. However, the “Proprietary Article Certificate”
(PAC) as per format attached (Annexure P) to be signed,
stamped and submitted by the User Department as per
following estimated values:
Estimated Value (INR) Authority of User Department
Up To ₹ 25 Lakhs DGM
Between ₹ 25 Lakhs and GM
₹ 50 Lakhs
Between ₹ 50 Lakhs and ED
₹ 1 Crore
Between ₹ 1 Crore to ₹ ED with the concurrence of DF
10 Crores
Above ₹ 10 Crores ED with the concurrence of DF
and CMD
6.1.3. In case of non-availability of personnel at the designated level,

the PAC may be approved by next higher authority.
6.1.4. The above values will prevail as amended from time to time.

MMAO 715

6.1.5. Brand approved procurement is an industry practice and is
unique to airlines and hospitality industry. Brand based
procurement is different from proprietary procurement e.g.
procurement of consumer preference based in-flight items,
such as liquors, wines, juices, where factors such as passenger
profile, sectors, class of travel, facilities provided by competing
airlines, etc. form the basis for a particular brand to be
procured. Similarly, premium products such as, Nescafe,
Cornflakes, Sauces, etc. need to be offered to passengers for
competitive edge and hence such premium products would
form the basis for brand approved procurement. Also where
standardization of an item is involved, the same can be done
on brand approved basis, e.g. gifts & giveaways, furniture of a
particular make, Office equipment, PCs, Printers, etc. Such
items, that are procured for its brand value are termed as
brand approved procurement.
6.1.6. The sectional head and above of the user department is the
competent authority to call for an item on brand approved
basis. The same to be obtained in writing along with the
request for procurement.
6.1.7. Proprietary/brand approved purchases can be of two types
/sources:
6.1.7.1. Single Source- Where the procurement is done directly from
the manufacturer/Producer/OEM or the sole authorized
distributor/dealer/channel partner (as exclusively
nominated by the OEM to quote).
6.1.7.2. Multiple Sources –Where manufacturer appoints multiple
distributors/dealers/channel partners and procurement is
on competitive bidding, from amongst them.
6.1.8. If procurement is on the basis of multiple sources of the same
OEM, the quotations may be obtained from multiple
distributors/dealers/channel partners, as have been

MMAO 715

authorized by the OEM/manufacturer/producer. In such cases
the quotes/bids could even be less than 3 (Three).
6.1.9. For single source procurement the user department would also
raise a shopping cart/purchase requisition in the SAP system,
wherein they will declare the asset, material or service to be
procured from OEM/Manufacturer or as proprietary/ brand
approved /or as only single approved source. The approval
level /authority for proprietary procurement will be as per
“PAC” as mentioned under clause 6.1.3.
6.1.10. TC process would be applicable for procurement on Single
Tender basis as per the financial powers as given in Annexure
A - Column 2.
6.2. Selective/Limited Tender:
6.2.1. Selective/Limited tender denotes tenders that are to be sent to
selective vendors/parties for the particular item(s) being
tendered for.
6.2.2. Selective/Limited tenders will be for tenders whose estimated
value is between ₹ 50,001/- and ₹ 25.00 lakh.
6.2.3. Selective/Limited tenders depending on the merit of the case
will either be a Single Bid Tender i.e. only the Price Bids are to
be called for or a Two Bid tender.
6.2.4. The number of vendors/parties to whom a Selective/Limited
tender should be sent, should be at least 5 (five).
6.2.5. If a minimum of 5(five) vendors/parties are not available for a
given item (with the exception of proprietary / brand approved
items), web tendering / public tendering, should be resorted to
for wider participation.
6.2.6. However, depending on the merit of the case, DGM and above
may authorize release of a Selective/Limited tender to even
less than 5 vendors/parties, if a minimum of 5 vendors/parties
against an item are not available.

MMAO 715

6.2.7. Conversely even if a minimum of five vendors are available for
a given item, Sr. Manager & above may authorize a web tender
or pubic tender depending on the merit of individual cases.
6.2.8. Every effort should be made to obtain minimum of 3(Three)
quotations, where five or more vendors are available for
Selective/Limited tendering.
6.2.9. Regret responses will be considered as valid tender responses.
If the regret responses are received either by fax, email, or in
an open condition, the same are to be sealed in an envelope by
an official of the Materials Management Department with the
tender number duly super scribed thereon and put in the
tender box. For online regret response, the system will
consider the same as a valid response.
6.2.10. In case the number of quotes received is less than 3, depending
upon the urgency, and the number of responses received
including regret responses, an officer of the Materials
Management Department of a level not below that of Sr.
Manager may authorize opening of the bids based on
recommendations/concurrence of the user, if need be.
6.2.11. Unsolicited bids (other than to whom the selective/Limited
tenders were sent) will not be considered as valid response.
6.2.12. If for some reason in a selective/limited tender, the lowest
bidder has not submitted his bid as per the
requirement/specification of the tender but is offering a better
specification or a product then the same is to be referred to the
user department. If the user department accepts and
recommends the better/ higher specification, then re-
tendering is to be resorted to. However, If the user does not
require any change /better specification or product then the
award may be released on the lowest vendor who has quoted
as per tender/user requirement.

MMAO 715

6.2.13. If all the bidders to whom the selected tender enquiries have
been sent have responded before the due date, the quotations
can be opened before the due date, i.e. the tender may be pre-
closed after due notification to all the bidders, who have
submitted quotations, inviting them to participate in the
tender opening.
6.2.14. Depending on the merit of the case, ED-MM and above may
authorize issue of a selective/ limited tender in a single bid/two
bid system even for tenders which are non-proprietary items
and whose value is above ₹ 25.00 lakhs.
6.3. Web tender:
6.3.1. Web tender is also categorized as public tender since it opens
to participation by any bidder meeting the requisite criteria of
the tender. The only difference is that it will be hosted on Air
India and CPP portal and will not be advertised in the print
media. The copy of the hosted NIT on Air India website and
CPPP should be maintained in the respective case files.
6.3.2. Web tender is applicable for items whose estimated tender
value is above ₹ 25.00 lakh and up to ₹ 100.00 lakh. (₹ 1 crore).
6.3.3. The existing approved suppliers, as well as any other known
sources of the item/s tendered for, should be notified of the
hosting of the tender on the website and on CPP Portal.
6.3.4. Prospective bidders should be provided with unrestricted
access for downloading the tenders from the website.
quotations.

MMAO 715

6.3.8. Bids received after the close of tender, will not be considered
as valid response.
6.4. Public / Global tender:
6.4.1. Applicable for items whose estimated tender value is above ₹
100.00 lakh. (₹ 1 crore).
6.4.2. Public tenders will normally be a Two Bid system i.e. Technical
Bid and Price Bid.
6.4.3. In addition to publishing in the print media (i.e. publishing in
regional or on All India basis will be decided by the Competent
authority in the Materials Management Department as per
Annexure A - Column 2, the tender will also be hosted on the
Air-India website and on CPP Portal. The copy of the hosted NIT
on Air India Website and CPPP, and the press advertisement
should be maintained in the respective case files.
6.4.4. Press advertisement would be released only once for the initial
release of the tender. Subsequently, if there is any
amendment/ extension to the tender, no further press
advertisement is required. However, the amended/ extended
tender would be visible/ available on the website.
6.4.5. The press advertisement, therefore, should state that the
prospective bidders should regularly visit the Air India website
for any amendment issued till the close of the tender.

MMAO 715

6.4.6. The existing suppliers, as well as any other known sources of
the item/s tendered for, should be notified of the hosting of
the tender on the website.
6.4.7. Prospective bidders who are not registered with Air India
should register themselves first to have unrestricted access for
downloading the tenders from the portal / bidding online.
quotations.
6.4.11. Bids received after the close of tender, will not be considered
as valid response.
*****

MMAO 715

7. BID SYSTEM
7.1. There will be 2 types of bid systems.
7.1.1. Single bid system: In a Single Bid system only the Price Bid is
called for. In a manual tender a single envelope containing the
Price Bid in a sealed/closed condition with the tender number,
due date and time, vendor name, contact details etc., super-
scribed on it, is to be submitted in the tender box. Similarly, in
the online bidding only the Price Bid page in the system is to be
filled and submitted. This will generally be applicable for
Proprietary/Brand approved products / services and Selective
/ Limited tenders (as defined in clause 6.1 & 6.2).
7.1.2. Two bid system: In a Two Bid system, the Technical Bid and the
Price Bid is to be submitted simultaneously in two separate
sealed/closed envelopes with both the envelopes super-
scribed with the tender number, due date and time, vendor
name, contact details etc. These two sealed/closed envelopes
may further be put in a single bigger envelope called the
Master envelope which should also be sealed/closed and
should also be super-scribed with the tender number, due date
and time, vendor name, contact details etc. Similarly, in the
online bidding both, the Technical bid and the Price Bid page in
the system is to be filled and submitted. This will generally be
applicable for web tenders and public tenders (as defined in
clause 6.3 & 6.4), may also be used for Selective/Limited
tenders.
*****

MMAO 715

8. E-PROCUREMENT
8.1. It would be mandatory to process selective, web public and public
tendering process, through e-Procurement module of SAP SRM system
for tenders restricted to Indian bidders.
8.2. All the bidders should be provided access to the SRM portal of SAP.
8.3. All the bidders from India should obtain a digital certificate - class 2/
class 3- organization type digital certificates from any of the authorized
certifying agencies, registered in India.
8.4. The tender document should include a clause providing guidelines to
bidders for e-Procurement, required system settings, failure of
submission of bids due to issues attributable to the bidder (including
their network, system settings, lack of training, digital certificates, etc.),
acceptance to the e-Procurement tendering process, etc.
8.5. The bid responses, as visible to the buyer in the SAP system in Air India
would be final and binding to the suppliers.
8.6. Any dispute arising out of e-Procurement process, the Systems
Management Group at Mumbai would liaise with the service
provider/service support agency and submit the sequence of events to
the concerned buyer. Thereafter, the concerned competent authority in
procurement as per the Financial Powers- Annexure A - Column 2 would
decide on the next course of action.
8.7. In the case of any system related issue, wherein suitable changes need
to be made in the tendering system, Systems Management Group would
liaise with the service provider to study the technical feasibility of such
a requirement, sign off functional specifications, provide user
acceptance testing and provide training to the end user.
8.8. In the case of global tenders (GTE), which are open for participation by
both Indian and foreign bidders, online bidding in SAP SRM system is not
mandatory. In such cases, Indian bidders will have the option to bid
online or manual, as preferred by them and both will be acceptable.
8.9. All the Web Public and Public tenders would be automatically uploaded
on Central Public Procurement Portal (CPPP). It would be the

MMAO 715

responsibility of the buyer to ascertain that such tender is displayed on
the CPPP. In the case of such a tender not being displayed on CPPP, the
concerned buyer would coordinate with regional web group of DIT, who
are responsible to maintain the link with the CPP Portal.
8.10. If the tender due/close date/ time is extended prior to the closing date/
time, then the amended tender document is automatically uploaded
with the revised due date/ time on the CPP Portal. However, if the
extension in tender closing date/ time is done after the due date/ time
of the original tender (which normally is the case), the same is not
uploaded/ visible on CPP Portal due to technical limitations of CPPP.
However, the extension of tender due date/ time will be visible on Air
India website.
8.11. Depending upon the merit of the case, Dy. General Manager and above
would be the competent authority to allow manual tendering process
for any value.
8.12. Depending upon the merit of the case, for procurement above ₹
50,000/- by MMD, AGM and above, as per the financial powers as given
in Annexure A - Column 2, would be the competent authority to
authorize procurement through GeM. For such procurement, the
process as stated in GeM to be followed.
*****

MMAO 715

9. REVERSE AUCTION
9.1. Reverse Auction is a type of auction (classified as dynamic procurement
method) where the starting price, bid decrement, duration of auction,
maximum number of automatic extensions are announced before start
of online reverse auction.
9.2. AGM & above will authorize initiation of procurement through Reverse
Auction mode.
9.3. There are three types of Reverse Auction:
9.3.1. Direct Auction: To be used where the item (s) and the vendors
are pre-decided, such as selected brand items, multiple
distributors of same OEM, etc. This can be used in the case of
selective tendering up to ₹ 25 Lakhs. Direct auctions can also
be used in case of brand approved items where more than one
distributor is available for bidding, irrespective of value.
9.3.2. Auction from RFx – Single bid (Technical only): This is a two-
stage public tender process, wherein at the first stage only
technical bids are invited. This process is to be followed, where
the last procurement price is known to fix the start price of the
auction. The technical bids are to be evaluated by the user
department and the bidders to be shortlisted. In the second
stage, the RFx is converted to an auction to invite price bids.
Only the shortlisted bidders at stage one are invited for
participation in the auction process.
9.3.3. Auction from RFx – Two Bid: This is a three-stage public
tendering process, wherein both technical and price bids are
invited, where the last procurement price is not known to be
fixed as start price of the auction. In the first stage only the
technical bids are opened and evaluation to be done by the
user department. At the second stage, the price bids of the
technically qualified bidders are to be opened and the L1 price
would be set as the start price for the auction. Only the

MMAO 715

shortlisted bidders at stage two are invited for participation in
the auction process.
9.4. In the case of Direct Auction or the Auction from RFx-Single Bid, the last
procurement price (all inclusive) would be set as the reference price for
the auction.
9.5. In the case of Auction from RFx-Two bid, the L1 price obtained in the RFx
process would be the reference price for the auction.
9.6. If the last procurement price is within the period of 2 years, the start
price (all inclusive) would be set as last procurement price + 15%.
9.7. If the last procurement price is more than 2 years old, the start price (all
inclusive) would be set as last procurement price +25%
9.8. In case of Auction from RFx-Two Bid, the L1 price + 10% would be set as
the start price (all inclusive) for the auction.
9.9. Reserve Price would be set as 20% less than the reference price.
9.10. Reverse auction would be conducted for a period of 30 minutes, where
the bidders will be allowed to reduce the price from the beginning of
the auction. Thereafter, the prices can be reduced repeatedly by the
bidders.
9.11. In case any bidder submits the price reduction within 5 minutes of
closing of reverse auction timing, the system will automatically extend
the reverse auction by a period of 10 minutes. All bidders participating
in the auction can reduce the prices during this period.
9.12. If the above situation repeats, i.e. a bidder submits a lower price within
5 minutes of closure of reverse auction, the system would automatically
extend the auction period by another 10 minutes.
9.13. The system would allow maximum 3 such extensions. Thus, the
maximum possible reverse auction time shall be 30+30=60 minutes.
9.14. In case there is no new lower bid in the last 5 minutes of the original
time or during the extended period, the auction would end after the
lapse of period and no extension would be allowed.
9.15. The auction would be on landed cost basis.

MMAO 715

9.16. Depending on the nature of the item, the value of decrement is to be
fixed by the buyer and shall be the minimum amount a bidder has to
reduce in order to beat a higher bid. This shall be in “Absolute Value”
fixed by the buyer and will be visible in the system prior to the start of
the auction.
9.17. Auction to be conducted by the buyer and one MM representative other
than the purchase section. Additionally, representatives from user
departments and Finance may also be invited to the auctioning process.
However, their presence is not mandatory.
9.18. The buyer should maintain the attendance sheet of the participants
present during the auction process.
9.19. Once the auction is over, the successful/qualified bidders should
provide break-up of the final price of the reverse auction bid on their
letter head clearly indicating the basic price, conditions and Taxes as
applicable. This break up should tally with the landed cost as per the
reverse auction bid. However, there could be cases where there is a
slight fractional variation between the landed cost and break up. In such
cases, the appropriate rounding off to be applied.
9.20. Tied ranks would not be allowed.
9.21. In case the MSME vendors participating in the auction, MSME / Make In
India benefits to be applied.
9.22. In case of split quantity or tied ranks due to MSME/ Make in India
benefits, bidders may be called for negotiation and auction awarded on
L1 basis as per the provisions of the MSME/ Make in India clauses.
9.23. In case of multiple items, sequential auction would be followed.
9.24. Normal TC process to be followed post auction.
9.25. In the event Reverse Auction has no response or is not successful, DGM
and above would authorize online bidding or manual bids.
*****

MMAO 715

10. SPOT PURCHASE BY SPOT PURCHASE COMMITTEE
10.1. The spot purchase refers to the collection of offers/quotes through
physical visit(s) to the premises of the suppliers by the designated team
of officers and is to be followed in exceptional / rare cases of
procurement of material and services.
10.2. Spot purchase shall be resorted normally for the purchase of, “off the
shelf”/ or readily available material at short notice, assets or services,
which are urgently required and for which a normal tendering process
cannot be completed in time and where no drawings/ detailed
specifications etc. are available or not practical to have the detailed
drawings /specifications for the tendering process and hence
procurement is intended through SPC (e.g. furniture /furnishing / sports
equipment / promotion – publicity display items like mementoes,
medals, plaques, etc.). However, it is to be generally ensured that no
long term requirement is covered through SPC which is more of one
time / short period requirement due to urgency / immediate
implementation / commencement of program etc.
10.3. The justifications for the SPC route procurement should be duly
prepared by the user department for in principle approval of the
competent authority as per the following given values:
10.3.1. For value up to ₹ 5.00 lakhs - User Departmental Head
(GM/ED/RD)
10.3.2. For value between ₹ 5.00 lakhs and ₹ 15.00 lakhs-ED(Fin)
10.3.3. For value between ₹ 15.00 lakhs and ₹ 25.00 lakhs-DF
10.3.4. For value above ₹ 25.00 lakhs - Through DF for CMD approval
10.4. MMD will not ratify or be a part of in principle decision to go in for SPC.

MMAO 715

10.5. Once the in principle approval for Spot Purchase is obtained from the
competent authority, the constitution of the SPC will be as under:
Value SPC Level ( Report to be
user /FI approved by the
/MM ) following level
official of User
Department
Up to ₹ 3 Lakhs Dy. Manager DGM
and above
Up to ₹ 15 Lakhs Manager GM
and above
Up to ₹25 Lakhs Sr. Manager ED
and above
Above ₹ 25 lakhs AGM and ED with the
above concurrence of DF
10.6. No dilution of the above levels of SPC is permissible.
10.7. The representative of the User Department will be the convener of the
SPC.
10.8. Selection of suitable product and supplier by actual market/e-market.
10.9. Survey (not by calling of tenders/quotes like selective/limited tenders)
is the essence of this mode. Therefore, SPC is required to survey the
market /e-market to ascertain the reasonableness of rate, quality and
specifications and identify the appropriate product and supplier. It
should be ensured that the selected product is of desired quality
meeting the requirement in most efficient and economical manner in
the given scenario. The SPC must keep the financial proprietary in view
while conducting the procurement.
10.10. The SPC shall prepare a report duly covering all aspects. Some of them
to be covered are:
10.10.1. Item/service details – description, qty, period.
10.10.2. Authority/approval for SPC based procurement.
10.10.3. Source selection method.
10.10.4. Brief discussion of offer received.
10.10.5. Acceptance of offer/s.

MMAO 715

10.10.6. Deviations, if any accepted.
10.10.7. Terms and Conditions.
10.10.8. Delivery Schedule.
10.10.9. Reasonability of rates.
10.10.10. Payment terms.
10.10.11. Any other points which the committee considers worth
mentioning.
10.11. Once the Spot Purchase Committee’s report is approved by the CA in
the User department, the vendor is to be communicated by the user
department for supply. On receipt of items/ services, the user
department shall certify the invoice and forward the same to Finance
directly for payment purposes. The role of MMD ceases once the CA
accepts the SPC report.
10.12. For assets, the AR /Asset Code process should be completed whilst
initiating the procurement through SPC.
10.13. Inspection and acceptance of the material/service will be the
responsibility of the user department.
10.14. The payment to suppliers should normally be against receipt of assets,
materials or services. Though advance payment is to be discouraged,
However, in some situations, if advance payments is warranted, same
to be authorized against bills/proforma invoice by competent authority
of user department whilst safeguarding of company interest and
ensuring such advances are duly monitored by the user and settled for
closure of advance payments with Finance.
10.15. The convener should ensure that the spot purchase exercise be
completed within reasonable time period -max 12 working days from
the date of in principle approval of the Spot Purchase.
*****

MMAO 715

11. TRIAL / DEVELOPMENT ORDER
11.1. Trial/Development Order may be placed where:
11.1.1. The performance of a new product / service is to be assessed.
11.1.2. Performance/ capability of a new vendor is to be assessed
11.1.3. To develop indigenous substitute of a foreign
product/service/source.
11.1.4. The capability of Indian start-ups is to be assessed.
11.1.5. To develop SC/ST owned MSME units.
11.2. AGM and above may approve placement of the Trial / Development
Order. This trial order may be placed for 5% of the quantity of the
annual requirement/ 03 trial months in case of services, at a price not
exceeding the current procurement price.
11.3. The value of a trial/ development order cannot exceed ₹ 20.00 Lakhs.
11.4. In case a trial order is being released for a new item/service, where the
actual annual requirement is not known, then the estimated annual
requirement would form the basis of trial/development order.
11.5. Trial/Development order can be given to maximum two vendors (5% for
each vendor) in a financial year for a particular item/service i.e. the cap
of 10% of the total annual requirement cannot be exceeded.
11.6. The trial/ development orders can be considered against the regular
RFQ only on case merit, wherein a potential vendor (unsuccessful on
some parameters – say experience/ turnover etc.) is keen and willing to
accept the same @ L-1 price, and quantity not exceeding 5% of the
tender quantity/ L-1 accepted price or through a separate trial RFQ (say
at regions) or on recommendation of MM Vendor Development Cell in
consultation with user department.
11.7. Beyond this limit, approval of GM-MM and above will be required for
release of any additional trial/ development orders but price not
exceeding the current procurement price.
*****

MMAO 715

12. PUBLIC PROCUREMENT POLICY FOR MICRO AND SMALL
ENTERPRISES (MSES)
12.1. From time to time, the Government of India lays down procurement
policies to help inclusive national economic growth by providing long-
term support to small and medium enterprises and disadvantaged
sections of society and to address environmental concerns. The
Procurement Policy for Micro and Small Enterprises, 2012 has been
notified by the Government in exercise of the powers conferred in
Section 11 of the Micro, Small and Medium Enterprises Development
(MSMED) Act, 2006. Details of the policy are available on the MSME
website.
12.2. Micro and Small Enterprises (MSE) must, along with their offer, provide
proof of their being registered as MSE (indicating the terminal validity
date of their registration) for the item tendered, with any agency
mentioned in the notification of the Ministry of Micro, Small and
Medium Enterprises (Ministry of MSME), indicated below:
12.2.1. District Industries Centre
12.2.2. Khadi and Village Industries Commission
12.2.3. Khadi and Village Industries Board
12.2.4. Coir Board
12.2.5. National Small Industries Corporation
12.2.6. Directorate of Handicraft and Handloom
12.2.7. Udyog Aadhar Memorandum
12.2.8. Any other body specified by the Ministry of MSME
12.3. The MSMEs are exempted from payment of Earnest Money Deposit,
subject to furnishing of the relevant valid certificate for claiming
exemption.
12.4. The SD clause will be applicable to MSME vendors. However, in case of
MSME vendors the SD/BG can be submitted on yearly basis, renewable
every year (Applicable in case of contracts of validity period more than
12 months).

MMAO 715

12.5. Timely payments to MSME suppliers are of essence. The agreed period
of payment must not exceed forty-five days after the supplies.
12.6. In tender, participating Micro and Small Enterprises (MSE) quoting price
within price band of L1+15 (fifteen) per cent shall also be allowed to
supply a portion of requirement by bringing down their price to L1 price
in a situation where L1 price is from someone other than a MSE and such
MSE shall be allowed to supply up to 20 (twenty) per cent of total
tendered value. The 20 (twenty) per cent quantity is to be distributed
proportionately among these bidders, in case there are more than one
MSMEs within such price band.
12.7. Within this 20% (Twenty Percent) quantity, a purchase preference of
four per cent (that is, 20 (twenty) per cent out of 20 (twenty) per cent)
is reserved for MSEs owned by Scheduled Caste (SC)/Scheduled Tribe
(ST) entrepreneurs (if they participate in the tender process and match
the L1 price). Provided that, in event of failure of such SC/ST MSE to
participate in tender process or meet tender requirements and L1 price,
four percent sub-target shall be met from other MSE. MSEs would be
treated as owned by SC/ ST entrepreneurs:
12.7.1. In case of proprietary MSE, proprietor(s) shall be SC /ST.
12.7.2. In case of partnership MSE, the SC/ST partners shall be holding
at least 51% (fifty-one percent) shares in the unit.
12.7.3. In case of Private Limited Companies, at least 51% (fifty-one
percent) share shall be held by SC/ST promoters.
12.8. In case the tender item is non-split-able or non-dividable, etc. MSE
quoting price within price band L1+15% (fifteen percent) may be
awarded for full/complete supply of total tendered value to MSE,
considering spirit of policy for enhancing the Govt. procurement from
MSE.(Refer Manual for procurement of Goods 2017,Para 1.10.4(viii).
12.9. Ministry of MSME have clarified that all Central Ministries/
Departments/ Central Public Sector Undertakings may relax condition of
prior turnover and prior experience with respect to Micro and Small
Enterprises in all public procurements subject to meeting of quality and

MMAO 715

technical specifications. The procuring authority, therefore, if so desires,
may incorporate a suitable relaxation clause in this respect in the tender
document.
12.10. Where any Aggregator has been appointed by the Ministry of MSME,
themselves quote on behalf of some MSE units, such offers will be
considered as offers from MSE units and all such facilities would be
extended to these also.
12.11. An MSE Unit will not get any purchase preference over another MSE
Unit.
12.12. This Policy is meant for procurement of only goods produced and
services rendered by MSEs and not for any trading activities by them.
*****

MMAO 715

13. MAKE IN INDIA
13.1. Definitions:
13.1.1. Local Content means the amount of value added in India which
shall, unless otherwise prescribed by the Nodal Ministry, be the
total value of the item procured (excluding net domestic
indirect taxes) minus the value of imported content in the item
(including all customs duties) as a proportion of the total value,
in percent. The minimum local content shall be 50% for the
local manufacturer to be eligible for the purchase preference.
13.1.2. Margin of purchase preference shall be 20%
13.1.3. Local Supplier means a manufacturer of goods/ items in India
or a service provider in India whose product or service offered
for procurement meets the minimum local content as
prescribed above or by the competent ministries/
departments.
13.1.4. Nodal Ministry means Ministry of Civil Aviation (MOCA)
13.2. In line with the preference to ‘Make in India’ policy of GOI, purchase
preference shall be given to local/domestic bidder in all procurement of
Goods & Services in the manner specified below.
13.3. For all procurements whose estimated value is Rs.50 lakhs or less only
local/domestic suppliers shall be eligible and therefore the tender
document should be limited to participation by local/domestic bidder
only. The preference for MSME units quoting within the price band of
L1 +15% will also be applicable here.
13.4. However, in case (for procurement whose estimated value is ₹ 50.00
lakhs or less) it is known that for items that are being tendered, there
are only limited local/domestic bidder and that calling for bids from
overseas/global suppliers might result in competitive bids being
received, then approval to float a global tender may be taken from the
competent authority not less than the rank of Sr. AGM.
13.5. For procurement of goods and services whose estimated value is ₹ 50
lakhs and above and which are divisible in nature, but split criteria has

MMAO 715

not been pre-declared in the tender then the following procedure shall
be followed:
13.5.1. Among all qualified bids the lowest bid will be termed as L1. If
L1 is from a local/domestic bidder and happens to be a MSME
Unit, then the contract for full quantity will be awarded to L1
bidder.
For Example:
After opening of Price Bid if the ranking is as follows:
L1-Local Bidder and MSME
L2-Any other category of Bidder including Local and Non-MSME
Then 100 % of the tender quantity to be awarded to the L1
bidder.
13.5.2. However, if the L1 is a local/domestic bidder, who is not an
MSME unit and if there is an MSME unit/s quoting within the
price band of L1 + 15% then 80% of the tendered quantity will
be awarded to the L1 local/domestic bidder and the balance
20% will be awarded to the MSME unit/s in accordance with
preference policy for MSME units i.e. if there are more than
one MSME within the L1 + 15% price band then the distribution
will be done equally among them from the 20% quantity.
For Example:
L1-Local/domestic bidder and Non-MSME
L2-Local/domestic bidder and MSME within L1 + 15 % price
band
band
bidder and balance 10% each to be awarded to the L2 and L3
bidders subject to their matching the L1 price.
13.5.3. If the L1 bid from a Nonlocal/domestic bidder, then 50% of the
order quantity shall be awarded to L1 bidder. Thereafter, the

MMAO 715

lowest among the local/domestic bidder will be invited to
match the L1 price for the remaining 50% quantity, subject to
the local/domestic bidder’s quoted price falling within the
margin of preference of 20%. If the local/domestic bidder
happens to be MSME unit and agrees to match the L1 price
then, the balance 50% of the tendered quantity shall be
awarded to such local/domestic bidder matching the L1 price.
In case such lowest eligible local/domestic bidder fails to match
the L1 price or accepts less than the offered quantity, the next
higher local/domestic bidder within the 20% margin of
purchase preference shall be invited to match the L1 price for
remaining quantity and so on and so forth. The contract shall
be awarded accordingly. In case some quantity is still left
uncovered on local/domestic bidder then such balance
quantity may also be ordered on the original L1 bidder.
For Example:
Case 1
L1-Non local/domestic bidder
band
L3-Local/domestic bidder (MSME/Non MSME) within L1 + 20%
margin of purchase preference
bidder and balance 50% to be awarded to the L2 bidder
subject to their matching the L1 price. In case the L2 bidder
fails to match the L1 price then the L3 bidder will be invited to
match the L1 price and so on and so forth.
Case 2
L1-Non local/domestic bidder (Say ₹ 100)

MMAO 715

band (Say Rs110)
L3-Local /domestic bidder (Non MSME) within L1 + 20%
margin of purchase
Preference (Say ₹ 112)
bidder and the balance 50 % to the L2 bidder subject to their
matching the L1 price. However, if the L2 bidder accepts less
than the allotted quantity then the quantities will be allotted
as follows:
L1 bidder-50 % of the tender quantity
L2 bidder-Say accepts 30 % of the tender quantity
L3 bidder-20%
(If L2 accepts 40% of the tender quantity then L3 bidder will be
eligible for 10%.In other words the allotment of quantity to L3
bidder will depend on the acceptance of the quantity by L2
bidder).
13.5.4. If the L1 is from a Non local/domestic bidder and the L2 is from
the local/domestic bidder who is not a MSME unit (but is
within 20 % margin of purchase preference) and agrees to
match the L1 price but However, there is a MSME unit within
the L1 + 15% price band then the local/domesticL2 bidder will
be eligible for award of 30% of the tender quantity and the
MSME will be eligible for 20% of the tendered quantity,
provided they agree to match the L1 price. If there are more
than one MSMEs within the L1 + 15% price band then the
distribution will be done equally among them from the 20%
quantity. In case such lowest eligible local/domestic bidder
fails to match the L1 price or accepts less than the offered
quantity, the next higher local/domestic bidder within the 20%
margin of purchase preference shall be invited to match the L1
price for the remaining quantity and so on and so forth. The

MMAO 715

contract shall be awarded accordingly. In case some quantity
is still left uncovered on local/domestic bidders then such
balance quantity may also be ordered on the original L1 bidder.
Case 1
L1-Non Local/domestic bidder (Say ₹ 100)
L2-Local/domestic bidder (Non MSME), within 20% margin of
purchase
preference (Say ₹ 110)
L3-Local Supplier ( MSME) within L1 + 15% price band (Say ₹
112)
Then the quantity will be allotted as follows:
L1 bidder-50 % of the tender quantity
L2 bidder (Non MSME)- 30 % of the tender quantity
L3 bidder (MSME)-20% of the tender quantity
13.6. For procurement of goods and services whose estimated value is ₹ 50
lakhs and above and which are divisible in nature, and a split criterion
has been pre-declared (generally 60:40 ratio) in the tender then the
following procedure shall be followed:
13.6.1. Among all qualified bids, the lowest bid will be termed as L1. If
L1 and L2 are local/domestic bidder and there are no MSME
within the price band of L1 +15% then the contract should be
awarded to the L1 and L2 local/domestic bidder in the pre-
declared ratio subject to L2 bidder matching the L1 price.
13.6.2. However, if the L1 bidder is not a local/domestic bidder, then
50% of the tender quantity to be awarded to the L1 bidder. If
the lowest bidder among the local/domestic bidder falls within
the margin of purchase preference of 20% but is not a MSME
and there are no other MSME bidders within the L1+15% price
band then the balance 50% quantity should be awarded to
lowest local/domestic bidder.

MMAO 715

13.6.3. If the L1 bidder is not a local/domestic bidder, then 50% of the
tender quantity to be awarded to the L1 bidder. If the lowest
local/domestic bidder is a MSME unit and falls within the
margin of purchase preference of 20%, then the balance 50%
tender quantity will be awarded to the local/domestic bidder
who also happens to be MSME.
13.6.4. However, if the lowest local/domestic bidder is not a MSME
unit and there are other MSME bidders within the L1+15%
price band, then lowest local/domestic bidder will be eligible
for 30% of the tendered quantity and the other MSME bidder
will be eligible for 20% of the tender quantity. If there are more
than one MSME within the L1+15% price band then the
distribution will be done equally among them from the 20%
quantity.
NOTE: In case local/domestic bidder are available within the
purchase preference margin of 20% and they are willing to
match the L1 price of the non-local/domestic bidder, then the
percentage of business to be awarded to the non-
local/domestic bidder will not exceed 50%, irrespective of the
ratio declared in the tender document.
13.7. For procurements of goods and services whose estimated tender value
is ₹ 50 Lakhs and above, and which are not divisible, the following
procedure shall be followed:
13.7.1. Among all qualified bids the lowest bid will be termed as L1. If
L1 is from a local/domestic bidder, then the 100% of the tender
quantity will be awarded to L1 bidder.
13.7.2. If L1 is not from a local/domestic bidder, the lowest bidder
among the local/domestic bidder, will be invited to match the
L1 price subject to local/domestic bidder’s quoted price falling
within the margin of purchase preference of 20%. In such cases
the entire 100% of the tender quantity shall be awarded to
local/domestic bidder subject to matching the L1 price.

MMAO 715

13.7.3. In case such lowest eligible local/domestic bidder fails to match
the L1 price, the local/domestic bidder with the next higher bid
within the margin of purchase preference of 20% shall be
invited to match the L1 price and so on and so forth. The
contract shall be awarded accordingly. In case none of the
local/domestic bidder within the margin of purchase
preference / price band of L1 +20% matches the L1 price then
the contract may be awarded to the L1 bidder.
13.8. Appropriate clause in the Bidders details/ prequalification criteria may
be incorporated to elicit the percentage of local content, as per the
following table which is to be given by the Bidder in the form of an
undertaking:
Particulars Percentage Value
Domestic Content (Excluding Net
Domestic Indirect taxes)
Imported Content (Including all
Customs Duties)
13.9. In case of procurement for a value in excess of ₹ 10 crores the
local/domestic bidder shall be required to provide the above certificate
from the statutory auditor or cost auditor of their company (in the case
of companies) or from a practicing cost accountant or practicing
chartered accountant (in respect of bidder other than companies) giving
the percentage of local content.
13.10. Air India will not be responsible for verification/vetting of the above
undertaking.
13.11. Exemption of small purchases: Notwithstanding anything contained
above, procurements where the estimated value to be procured is less
than ₹ 10 lakhs(non TC cases), the above provisions shall not be
applicable. However, it shall be ensured that procurement is not split
for the purpose of avoiding the provisions of this clause.
13.12. GM-MM and above will be the competent authority to waive any of the
above conditions depending on the merit of the case.
*****

MMAO 715

14. INTEGRITY PACT & IEM
14.1. In respect of all tenders of the estimated value of ₹ 10 Crore and above,
the Integrity Pact (as per Annexure O) would be signed by AIR INDIA and
Vendors at the pre-tendering stage and will form a part of the technical
bid document. A pre-signed Integrity Pact would form a part of the
Tender document. The Vendors would sign the Pact and submit it along
with the technical bid.
14.2. The tender document should also include the name and contact email
address of the IEM.
14.3. Any bid not accompanied by IP duly signed by the bidder is liable to be
rejected.
*****

MMAO 715

15. TIME FRAMES FOR QUOTES
15.1. The time frame for submission of quotes against various tender types
generally should be as under:
15.1.1. Selective tender: Minimum 7 calendar days.
15.1.2. Web tender: Minimum 15 calendar days.
15.1.3. Public / Global tender: Minimum 21 calendar days.
15.2. The competent authority in the Materials Management Department as
per the Financial Powers defined at Annexure A - Column 2 may at their
discretion authorize variations in the time frame from the above.
NOTE: The above time frame will also be applicable for manual bids as
and when called for.
*****

MMAO 715

16. EXTENSION OF TENDER DUE/CLOSE DATE
16.1. The due/close date of a tender may be extended at any time during the
tendering process, including after the date of closing of the tender and
before opening of bids.
16.2. Generally, a minimum of three quotations / responses are required to
open the bids. However, if the number of quotations / responses
received is less than three, the tender should be extended once. After
one extension the tenders can be opened irrespective of the number of
responses received. No further extension is required.
16.3. However, in case of urgency expressed by the user department and on
their specific request the bid/s may be opened without any extension
irrespective of the number of responses received.
16.4. Under certain circumstances an extension to the tender may be
warranted after the scheduled closing date/post first extension of the
tender, even if a minimum of three quotations have been received. Such
circumstances may arise wherein it is noticed that the market leader or
the last supplier has not quoted. In such cases the user department
should be consulted and depending upon the merit of the case, the
competent authority as per Annexure A - Column 2, may grant
extension, if there is adequate justification for the extension based on
the profile of the parties who have not quoted/quoted. The reasons for
such extensions should be recorded in writing.
16.5. The period for extension should be as given below:
16.5.1. Selective tender: Minimum 4 calendar days
16.5.2. Web tender: Minimum 7 calendar days
16.5.3. Public / Global tender: Minimum 12 calendar days
16.6. The competent authority in the Materials Management Department as
per the Financial Powers defined at Annexure A - Column 2, may at their
discretion authorize extension as above as well as variations in the time
frame of extension.
16.7. In case there are no bids received against original tender period as well
as the extended period, the tender then should be extended one more

MMAO 715

time i.e. for a second time. If still there are no quotations, the shopping
cart to be returned to indenter and be advised to review the
requirements / specifications. In case of change in specifications/
requirements, a new tender to be floated.
16.8. After release of the tender but before the due date, if the user desires
some changes in the work scope/ specification then the due date to be
extended to cover the original period as defined in point 15.1 above.
16.9. In the case of selective/limited tender, extension of tender due date
should be notified to all the bidders to whom the selective/limited
tender has been forwarded. In the case of web tender, notification of
extension should be put up on the website and also intimated to the
invited bidders.
16.10. In the case of public / global tender, notification of extension should be
put up on the website. In addition, the invited bidders are also to be
notified in writing. As stated in point 6.4.4 and 6.4.5, no press
advertisement is required for an extension of the tender due date.
*****

MMAO 715

17. TENDER DOCUMENT
17.1. The tender document should be self-contained and comprehensive
without any ambiguity. All essential information, which a bidder needs
for sending responsive bid, should be clearly spelt out in the tender
document in simple language.
17.2. The Technical Bid should comprise the technical
specifications/parameters, detailed scope of work, Service Level
Requirements, drawings, pre-qualification criteria / eligibility
criteria/technical evaluation criteria, warranty expected, post warranty
support requirements (if applicable), delivery schedule, pre delivery
inspection, penalty clause for deficiency in quality/service level, Penalty
for delayed deliveries of items critical in nature such as fuel, gas, oil etc.
(if different from standard penalty clause),requirement of Pre-Bid
Conference and any other relevant technical details as provided by the
user department.
17.3. Any other specific user requirements provided by the user department
to be incorporated in the tender.
17.4. Materials Management Department will incorporate the applicable
standard commercial terms in the tender document such as EMD,
SD/Performance Bank Guarantee, Standard Payment terms, Bid validity,
Standard Penalty clause for delayed deliveries, Standard termination
and exit clauses etc.
17.5. New vendors are required to complete the vendor registration
formalities at least 5 working days prior to close of a public/ web public
tender in order to ensure all the registration formalities/ training are
completed within the time. A relevant clause to this effect should be
included in the tender document.
17.6. Where ever applicable the tender document should also contain a
clause stating the reasons due to which the quotation of a bidder is
liable to be rejected, viz. receipt by fax / email, manual quotations
instead of online bids, unsigned quotation, open quotations, non-
receipt of EMD (without valid proof of exemption), submission of EMD

MMAO 715

in a mode other than as indicated in the tender, receipt of quotation
after the closing date of the tender, non-receipt of samples (if
applicable), etc.
17.7. The relevant bid receiving and opening clauses to be incorporated in the
tender document.
17.8. The tender document should include a clause on withdrawal and
modification of bids. The bidder, after submitting the bid, is permitted
to withdraw / modify the bid without forfeiture of EMD, prior to close
of the date and time of the tender. No bid may be withdrawn in the
interval between the deadline for submission of bids and expiration of
the period of bid validity. Withdrawal of the bid during this period would
result in forfeiture of the bidder’s EMD and other sanctions. Similarly, in
online bid the bidder can change his bid till the due /close date and time
and the system will automatically consider only his last bid.
17.9. The benefits available to the MSME units should be incorporated in the
bid document, in accordance with the extant stipulations of the
statutory authorities.
17.10. Similarly purchase preference to ‘Make in India’ program to be
incorporated wherever applicable.
17.11. The tender documents are to specify the currency in which the tenders
are to be priced. As a general rule domestic bidder are to quote and
accept their payment in INR, except in case of Bond-to-Bond transfer or
Imported goods which are directly imported against the contract / PO
may be quoted and paid in foreign currency.
17.12. If more than one source of supply is necessary due to critical nature of
the item, or because the tight delivery schedule as stipulated in the
tender may be difficult for a single supplier to comply with, then the
ratio in which the tender quantities would be split, (e.g. in the ratio of
60:40/70:30) and the condition thereof, i.e. the eligible bidders would
have to agree to match the L-1/negotiated L1 price, have to be pre-
disclosed in the tender document itself.

MMAO 715

17.13. However, in case pre-disclosing the distribution of the quantities in the
bid document is not feasible, as the capacity of the L-1 firm may not be
known in advance, then it may be stated that if ,after due processing, it
is discovered that ,the quantity to be ordered is far more than what L-1
is capable of supplying and there was no prior decision to split the
quantity, then the quantity being finally ordered should be distributed
among the other bidders in a manner i.e. Fair, transparent and equitable
at the L-1 rate.(CVC circular No. 4/3/07 dated 3/3/2007).
17.14. In cases where the tendered quantity of the item(s) / service(s) is / are
likely to change after the award of contract, or during the term of the
contract, quotations should be obtained in different quantity slabs.
However, the tender document must spell out clearly the slab which
would be considered for arriving at the L1 bid.
17.15. The date and time of tender opening should be declared in the tender
document itself. In order to allow for sufficient time to determine
whether an extension is to be given for a tender, a gap of one working
day may be given between the date and time of tender closing and the
date and time of tender opening.
17.16. If for some reason, the tender opening date is declared a holiday by Air
India (at the station issuing the tender), then the tender closing/
opening date will automatically stand extended to the same timings of
the next working day
17.17. The tender document should contain a clause advising the prospective
bidders that in their own interest they should submit their bids well
before close of tender date and time in order to avoid any last moment
glitches such as postal or courier problems and in the case of online bids
network issue or connectivity problems. In the case of manual bids, the
bids must reach well in advance with the correct address, tender no, due
date, etc. as indicated in the tender document. It may also be
mentioned that Air India will not entertain last moment request for
extension of due / close date and reserves the right to accept or reject
such request for extension at its sole discretion.

MMAO 715

17.18. The tenders should include a clause stating that the closing date for
submission of bids may be extended at any time, including after the
scheduled date of closing, at the sole discretion of Air India.
17.19. In the case of manual bids, the quotations are to be received in sealed
/closed envelopes. A clause to this effect / mode of submission must be
included in the tender document.
17.20. The terms of delivery have a direct bearing on the quoted price.
Therefore, the terms of delivery such as the delivery schedule, location
of delivery, etc. should be clearly mentioned in the tender document.
Expressions such as ‘immediate’, ‘ex-stock’, ‘as early as possible’, ‘off-
the-shelf’, etc. must not be used to indicate contractual delivery period.
17.21. Wherever applicable, the Loading Criteria in respect of deviations from
the Terms and Conditions such as payment terms, warranty, delivery
period, etc. which has financial implications should be spelt out in the
tender document.
17.22. In case of turn-key contracts, or contracts of special nature such as
purchase of sophisticated and costly equipment, a suitable clause is to
be provided in the tender document for a pre-bid conference for
clarifying by the user department/indenter issues and doubts, if any,
about the specifications and other allied technical details, as mentioned
in the tender document. The date, time and place of the pre-bid
conference should be indicated in the tender document for information
of interested bidders. This date should be sufficiently ahead of the
tender opening date.
17.23. Names and contact details of two purchase personnel may be given in
the tender document for giving clarification to any prospective bidders
who wish to seek the same with respect to the commercial terms of the
tender such as EMD, SD, payment terms etc. Clarification on technical
aspect will be given by the user department.
17.24. In respect of all tenders of the estimated value of ₹ 10 Crore and above,
the Integrity Pact will form a part of the tender document.

MMAO 715

17.25. A tolerance clause, if warranted, should be incorporated in the tender
document, reserving the purchaser’s right to increase or decrease the
quantity of the required goods up to that limit without change in any
terms and conditions and prices as quoted by the bidders. This is to
cover unforeseen changes in the quantity requirements from the date
of issue of the tender to the date of release of the purchase order /
contract. This tolerance should normally be limited to +- 25%. (As per
Manual for Procurement of Goods 2017 clause 7.5.3).
17.26. The tender document should state that “material with AI Logo, including
rejected lot should not be used/disposed/sold by the vendor to anybody
else in the market”. Undertaking to this effect to form a part of their
tender response.
17.27. The tender document should have a clause regarding the validity of the
quotations. The validity for a selective tender should generally be for a
period of 75 days from the date of opening of the tender. For web /
public tenders the validity should generally be for a period of 90 days
from the date of opening of technical bid.
17.28. The tender document should clearly state the basis of arriving at L1. i.e.
Line wise L1 or overall L1.
17.29. The tender document should mention the basis of award of contract/PO
and state clearly whether the comparison would be made on landed
cost or CIF or Ex-works or FOB basis etc.
17.30. If it’s a global tender and the response is expected in multiple
currencies, then the tender document should clearly state that IATA
Exchange rate as prevailing on the date of opening of the technical bid
would be the basis for bringing all the bidders on a common platform in
INR for comparison purpose.

MMAO 715

17.31. The tender document should also mention the basis of delivery.
Following are some of the commonly used incoterms viz.:
INCOTERMS Options Applicable to
Ex-Group of Terms Buyer takes full
responsibility from point of
departure
EXW – Ex-Works Any mode of transport
Free Group of Terms Freight is not paid by
the seller
FCA – Free Carrier Any mode of transport
FAS – Free Alongside Sea and inland waterway
Ship transport only
FOB – Free On Board
C Group of Terms Freight is paid by the
seller
CPT – Carriage Paid To Any Mode of transport
CIP – Carriage and Insurance Any mode of transport
Paid to
CFR – Cost and Freight Sea and inland waterway
CIF – Cost, Insurance transport only
and Freight
Delivered Group of Seller takes responsibility
Terms from an intermediate point
onwards
DAT – Delivered At Any mode of transport
Terminal
DAP – Delivered At Any mode of transport till
Place the designated ware house
DDP – Delivered Duty Any mode of transport till
Paid the designated ware house
DDU – Delivered Duty Any mode of transport till
Unpaid the designated ware house
17.32. Fall in price clause – The tender document should contain a clause
stating that the successful bidder should pass on any benefits arising due
to lower taxation or change in input/raw material cost by virtue of some

MMAO 715

exemption by government or for any reasons during the course of the
contract/order.
17.33. Wherever applicable the tender document should include a clause on
submission of self- certified ‘QAC’ wherein the supplier confirms that
the consignment delivered conforms to the specifications / parameters
as spelt out in the contract / PO.
17.34. Wherever applicable the tender document should incorporate a clause
regarding submission of a Test Report from a certified test laboratory
along with each lot / supplies of consignment confirming conformance
to the specification of the items / goods as mentioned in the contract /
PO. The lab test report can be for one lot which are manufactured but
delivered in multiple staggered consignments. This is apart from the
QAC.
17.35. The tender document should contain suitable provision for settlement
of disputes, if any emanating from the resultant contract i.e. suitable
arbitration clause to be incorporated.
17.36. Exit/Termination clause and Force Majeure clause should form a part of
the tender document.
17.37. An undertaking is to be obtained from the bidders as per Annexure Q.
17.38. Wherever applicable especially in service contracts, a clause should be
incorporated stating that the bidders shall have registration with EPFO
& ESIC.
17.39. Generally, for long term rate contracts, the tender should be floated for
a period of 24 months. However, depending on the nature of items /
services, the contract period in the tender can be increased or
decreased. E.g. In case of commodity items like oil, gases etc. the period
of contract can be 12 months due to the volatile nature of the item and
for AMCs it can be 36 months. The call off for supply of items to be given
as and when required or a fixed delivery schedule can be given in
staggered lots over the period of contract.
17.40. The tender document should be sent to the user department for review
and approval of the entire tender document before release of the same

MMAO 715

by MMD. In case of items required by multi departments, the tender
document, if required, may be sent to major departments like
Engineering, Operations, Finance, Commercial, etc. for vetting purpose.
17.41. A general sequence of standard terms and conditions to be incorporated
in a tender document is as per Annexure R.
Note: The above clauses are illustrative of some commonly used clauses
in a tender. However, depending on the nature of the item,/service,
there may be other tender specific clauses, which should be
incorporated wherever applicable.
*****

MMAO 715

18. TURNOVER CRITERIA
18.1. The turnover criteria are pre-qualification criteria to be given by the user
department.
18.2. The turnover criteria norm usually will be at minimum 30% of the
estimated tender value per annum, for the last 2 financial years.
18.3. If an authorized distributor/dealer bids on behalf of a manufacturer,
then apart from the turnover of the distributor/dealer, the turnover of
the manufacturer should also be asked for in the tender and should be
as per above given criteria.
18.4. In case the user department has not mentioned the turnover parameter
as a part of the prequalification criteria forwarded to MMD, MMD
should refer back the indent asking for the turnover parameter, if any
to be incorporated in the Pre-qualification.
18.5. The final decision with regard to inclusion or exclusion of the turnover
parameter or increase/decrease in the turnover parameter from the
stipulated 30% of the estimated tender value per annum will be the
responsibility of the user department. The reasons/justification for the
same should be given in writing duly approved by the TC member of the
user department as per Annexure A - Column 2.
*****

MMAO 715

19. BIDS FROM OEM/AUTHORIZED DISTRIBUTORS /
DEALERS/CHANNEL PARTNERS
19.1. As a policy, wherever applicable, the bids should be obtained from the
OEM/ Principal/ Manufacturer or their authorized distributor/s or
dealer/s or channel partners.
19.2. In case of an authorized distributor / dealer quoting on behalf of a
principal / OEM and submitting the authorization letter from the
principal / OEM, then reconfirmation from the principal / OEM with
regard to the issuance of the authorization letter by them, be obtained.
19.3. If the OEM and its authorized distributor/s or dealer/s or channel
partners - both participate then, the bid, of only the OEM will be
considered.
19.4. One authorized representative /dealer /channel partner of a
manufacturer cannot represent two or more manufacturer or quote on
their behalf in a particular tender.
19.5. Similarly, at the time of asking for acceptance of repeat order/ extension
from such authorized dealers / distributors, the principal company too
may be intimated about the intensions of placement of repeat orders
/contracts.
19.6. Wherever applicable, the contract /PO placed on an authorized
distributor / dealer may have the reference of such principal
manufacturer’s product code –make /model / specifications etc. duly
specified for execution of contract /PO to be in conformity. This is
applicable for both Indian and global OEMs.
19.7. Wherever the contract/ PO is released on the authorized distributor/s
or dealer/s or channel partners, the copy of the same should also to be
forwarded to the OEM/ Principal/ Manufacturer.
19.8. For procurement of spares, consumables and accessories of an existing
equipment, the same should be procured through the OEM. However,
if OEM directs for procurement through its authorized distributor/s or
dealer/s or channel partners, then the same to be procured from them.

MMAO 715

19.9. Similarly, for AMCs/ repairs of equipment, the contract should be on
OEM or their directed authorized distributor/s or dealer/s or channel
partners.
*****

MMAO 715

20. SUBMISSION AND CUSTODY OF TENDER QUOTATIONS/
BIDS
20.1. For online tenders the quotations / bids are in an encrypted form and
safely stored in the server and cannot be opened till the due date and
time. The system is IT Act 2000 compliant.
20.2. For offline / manual tenders, MMD-Admin shall maintain tender boxes
for receiving the bids. The tender boxes should be locked at all times
and will be under MMD Admin section/ any other non-purchase section.
20.3. For quotations / bids received by courier the same shall be deposited in
the tender box.
20.4. For bulky / oversized bids and samples, if any which cannot be dropped
into the tender boxes, officials responsible to receive such bids should
maintain proper records of all such oversized quotations and samples.
20.5. All manual bids received shall be promptly stamped on the cover with
the date and time of receipt, and thereafter deposited in the tender box
or in the custody of designated officials of MMD, if they are oversized /
bulky.
20.6. Designated official to present the Bids/Quotations to purchase section
on the due/close date.
*****

MMAO 715

21. EARNEST MONEY DEPOSIT (EMD) / BID SECURITY
21.1. Applicable for all public tenders above ₹ 10.00 lakh.
21.2. EMD will not be applicable for procurement on single tender, selective
tender, where the vendors are shortlisted for tendering on the basis of
their being registered suppliers / Brand approved / Proprietary /OEM
/sole authorized distributor or dealer on single source basis. This will be
applicable for tenders of any value.
21.3. MSME units are exempted from submission of EMD. However, this
exemption is applicable only if the MSME unit is registered for the
goods/services tendered for.
21.4. EMD would not be applicable for Public Sector Units, Govt Undertakings,
AI widows’ association, AI cooperative society, Social Welfare
organizations, handicapped and blind associations.
21.5. EMD will be applicable @ 2% of the estimated tender value or its
equivalent in foreign currency. There will be no higher limit or capping
limit to EMD. The amount to be rounded off to the next highest
thousand.
21.6. EMD up to ₹ 5 Lakhs can be in the form of an account payee demand
draft, bankers’ cheque or through ECS.
21.7. In case of EMD above ₹ 5 Lakhs, the EMD, apart from the above
instruments can also be in the form of bank guarantee.
21.8. The bank guarantee should be issued/ confirmed from any commercial
bank, preferably an Indian bank in an acceptable form and should be
valid for a period of 45 days beyond the bid validity period.
21.9. The BG should be submitted to the concerned Buyer, who would
forward the same to Finance department. Since Finance department is
the custodian of the BG, an officer of the Finance department should be
specifically designated with the responsibility for verification of BG(s).
The verification of the authenticity / genuineness of the Bank Guarantee
submitted by the parties will be done by Finance Department, the
custodian of the Bank Guarantee. Finance may evolve suitable
procedure for ensuring authenticity / genuineness of the BGs, including

MMAO 715

the concept of acceptance of Electronic BG in line with the guidelines of
Banks / Reserve Bank of India from time to time.
21.10. Advice for return/ encashment of BGs would be conveyed to the Finance
Department by the Materials Management Department after the
finalization of the contract.
21.11. The EMD amount is to be mentioned in terms of absolute value in the
tender.
21.12. EMD furnished by the unsuccessful bidders should be returned to them
free of interest within 45 days of issue of the Purchase Order /
conclusion of the contract. EMD of the successful bidder should be
refunded without any interest whatsoever, after receipt of Security
Deposit or Bank Guarantee in lieu thereof from the vendor.
21.13. EMD of a bidder will be forfeited if the bidder withdraws or amends its
bid after the due date, impairs or derogates from the tender in any
respect, or declines to accept or honour the Purchase Order / contract
if awarded in his favour within the Bid validity period. If the successful
bidder fails to furnish Security Deposit or Bank Guarantee within the
specified period, its EMD is liable to be forfeited.
21.14. Depending on the merit of the case, the decision to waive incorporation
of the EMD clause in the tender document would be with DGM-MM and
above. The reasons for according such waiver are to be placed on
record.
21.15. Depending on the merit of the case, GM-MM and above would be the
competent authority to waive individual EMDs in a particular tender.
*****

MMAO 715

22. SECURITY DEPOSIT/ PERFORMANCE BANK GUARANTEE
22.1. Security deposit/ Bank guarantee for PO/ contracts up to ₹ 1 Lakh would
not be applicable.
22.2. For PO value between ₹ 1 lakh and ₹ 10 lakh, Security Deposit shall be
deducted from the invoice/bill(s) by the Finance Department, and no
separate Security Deposit needs to be submitted.
22.3. For PO value above ₹ 10 Lakh, a Security Deposit must be obtained from
the successful bidder within 2 weeks from the date of issue of the
Purchase Order (PO)/Contract. The Security Deposit will be applicable at
the rate of 5% of the value of the Contract/PO, and can be in the form
of Account Payee Demand Draft, Banker’s Cheque, ECS, Bank Guarantee
(BG) issued from any commercial bank, Fixed Deposit Receipt from any
commercial bank. However, in some exceptional cases like the purchase
of high value items and critical nature of items, depending on the merit
the SD / BG, may be higher, ranging between 5-10%. The mode of
receiving the SD remains the same as above.
22.4. Security deposit/bank guarantee should be in the same currency as the
contract and must conform to Uniform rules for Demand guarantees –
an international convention regulating international securities.
22.5. While the Security Deposit in the form of Bank Guarantee can be in an
acceptable form which safeguards the purchaser’s interest in all respect,
it would also be preferable if a standard Bank Guarantee Format is
enclosed along with the contract / PO for easy reference to the
successful bidder. The standard Bank Guarantee format is enclosed at
Annexure C.
22.6. The validity of the SD/BG would be till 60 days after the scheduled
completion of all obligations under the Contract/PO. Generally, the
contract period is for 24 months. The SD/BG would thus be valid for a
period of 26 months from the date of the contract/PO. In case of
performance Guarantee, the same is to be valid up to 60 days beyond
the warranty period.

MMAO 715

22.7. However, in case of MSME vendors the SD/BG can be taken on yearly
basis, renewable every year. The second year SD/BG should be valid till
60 days beyond the contract period/warranty period.
22.8. In case of commissioning of the equipment, wherever applicable, the SD
would be converted into a Performance Guarantee (PG) that would be
refunded / returned by Finance on completion of warranty / all
obligations under the Purchase Order / contract subject, However, to
deduction of penalties, if any, that may be levied under the terms of the
Purchase Order / contract. The onus of informing MMD of the shortfall
or under performance by the vendor would be on the user department.
In the absence of any intimation to the effect from the user department
during the course of the contract, MMD would advise Finance for the
release of the Security Deposit/ Bank Guarantee, on completion of the
warranty / contract period.
22.9. Depending on the merit of the case, the decision to waive incorporation
of the SD clause in the tender document would be with DGM-MM and
above. The reasons for according such waiver are to be placed on
record.
22.10. For procurement on single tender, selective tender, where the vendors
are shortlisted for tendering on the basis of their being registered
suppliers / Brand approved / Proprietary /OEM /sole authorized
distributor or dealer on single source basis, the SD clause although
applicable may be refused to be complied with by the successful bidder.
Under such circumstances, the competent authority to approve waiver
of SD post release of the tender and/or before/after release of the
contract would be DGM-MM and above. The reasons for according such
waiver are to be placed on record.
22.11. For Public tenders, the competent authority to waive SD post release of
tender and/or before/after release of contract would be GM-MM.
22.12. The cost of submission of Security Deposit or execution of BG would be
borne by the successful bidder.

MMAO 715

22.13. The original BG should be forwarded by the banks to the beneficiary
directly under registered post (A.D.). However, in exceptional cases,
where the BG is handed over to the bidder for any genuine reason, the
bank should immediately send by registered post (A.D.) an unstamped
duplicate copy of the guarantee directly to the beneficiary with a
covering letter requesting them to compare with the original as handed
over to the customer, and to confirm that it is in order. The A.D. card
should be kept along with the BG. (CVC Circular No. 01/01/08 dated
21/12/2008).
22.14. The BG should be submitted to the concerned Buyer, who would
forward the same to Finance department for independent verification.
Since Finance department is the custodian of the BG, an officer of the
Finance department should be specifically designated with the
responsibility for verification of BG(s). The verification of the
authenticity / genuineness of the Bank Guarantee submitted by the
parties will be done by Finance Department, the custodian of the Rev
Docs / Bank Guarantee. Finance may evolve suitable procedure for
ensuring authenticity / genuineness of the BGs, including the concept of
acceptance of Electronic BG in line with the guidelines of Banks /
Reserve Bank of India from time to time.
22.15. Advice for return/ encashment of BGs would be conveyed to the Finance
Department by the Materials Management Department on the basis of
the inputs received from the user department, wherever applicable.
22.16. In case of extension of the delivery period under the Purchase Order,
the validity of the SD / BG should be extended up to 60 days beyond the
period of such extension.
22.17. MSME units are also required to submit the Security
Deposit/Performance Bank Guarantee.
*****

MMAO 715

23. SAMPLING
23.1. According to the existing guidelines on public procurement of goods
2017, purchase in accordance with a sample should not be usually
undertaken. Hence the user department is to give the detailed
specification/drawing of the item/s indented. Therefore, calling for a
sample along with the tender and deciding on the basis of evaluation of
the sample will not be a normal practice.
23.2. However, if at all felt necessary by the user department to have samples
along with the technical bid the same be advised by them with specific
intended purpose (selection /rejection based on samples) while
requisitioning / initiating the tender process as generally the evaluation
of such samples is for indeterminable characteristics such as
shade/tone, make-up, feel, finish, workmanship, taste, flavour,
fragrance and so on.
23.3. Wherever the evaluation, selection of bidders /award is based on
samples evaluation also as desired by the user department, the samples
may be asked along with quotes /bids submissions or in case of
perishable items after the technical bids have been scrutinized and
shortlisted by the user department.
23.4. A provision for the submission of a pre-production sample conforming
to the tender specifications and/or the purchaser’s sample by successful
bidder(s) may be stipulated before giving clearance for bulk production
of the supply.
23.5. Samples should be properly coded by the Materials Management
Department wherever feasible, and thereafter forwarded to the user
department for carrying out the sample evaluation. Materials
Management Department would not be associated with evaluation of
samples which is a part of technical evaluation and is under the purview
of the user department.
23.6. The authority in the user / indenting department for approving samples
would be as defined under the financial powers, vide Annexure A -
Column 2.

MMAO 715

23.7. For multi-user items, wherever evaluation of samples is to be done by
the Materials Management Department, the coding should be carried
out by a Section that is different from the Section that would carry out
evaluation of the samples. If required, the major user department would
be co-opted by MMD for evaluation purpose. Additionally, for staff
related items such as uniform, long service momentos etc. personnel/IR
should also be associated.
23.8. The coding is to be supervised by an officer of the rank of Sr. Manager
and above, and the coding details should be kept under the custody of
the supervising officer till such time as the evaluation has been
completed.
23.9. Wherever the user department wishes to call for samples for evaluation
and shortlisting purpose before the initiation of the tender process, they
should arrange to get the samples themselves for evaluation. MMD will
not be associated in calling for such pre-tendering samples.
*****

MMAO 715

24. BID RECEIVING AND OPENING
24.1. Depending on the type of bid i.e. Single bid or two bid, quotations will
be received either in a single envelope or two envelopes.
24.2. If it is two bid then, Technical and Price bids should be submitted
simultaneously and in 2 separate sealed/closed envelopes. These two
envelopes can be further enclosed in a master envelope which should
also be in a sealed/condition. Each sealed/closed envelope (whether
submitted separately or in a master envelope) should be super scribed
with the tender number and notation “NOT TO BE OPENED
BEFORE_______ (Bidders to mention due date and time in the blank
space)”, Bidder Name, email ID / contact numbers (telephone and fax)
of the bidders contact person, and the item(s) for which the quotation
has been submitted.
24.3. If the master envelope is found to contain an inner envelope marked
“Price bid along with the tender reference” in a duly sealed/closed
condition, but also contains the “Technical bid” in an open condition,
this tender will be accepted / opened and the “Technical bid” will be
taken on record. This is because the “Technical bid” was effectively
received in a sealed envelope, i.e., the master envelope.
24.4. If the technical bid and the price bid are both in an open condition, when
the sealed/closed master envelope is opened, this bid would stand
disqualified.
24.5. The bid will also stand disqualified if incomplete quotations, i.e. where
only the technical or only the price bid are received in a single sealed
master envelope.
24.6. While opening the technical bid envelope if it is found that the same
contains the price bid in an open condition, the bid shall stand
disqualified.
24.7. The envelopes in which the bids are submitted should be retained in the
file. Care should be taken while opening the tenders to ensure that the
date, time, tender no. and any other relevant details are not defaced/
torn off prior to filing.

MMAO 715

24.8. In the case of manual bids, price bids of the bidders, who do not qualify
at the stage of evaluation of the technical bids, are to be returned after
the tender process has been concluded.
24.9. In the case of manual bids received in hard copy, one representative
each of the Purchase and Admin Section of the Materials Management
Department or any other section of MMD other than purchase would
jointly open bids received in hard copy in respect of tenders with an
estimated value below ₹ 10 lakh.
24.10. For manual bids received in hard copy in respect of tenders with an
estimated value over Rs.10 lakh, the same would be opened by an
officer each of the Purchase Section of the Materials Management
Department, an Officer of the Finance department and a representative
of Admin Section of Materials Management Department or an officer
from any other section of MMD other than purchase or the user
department.
24.11. With regard to online bids, the respective buyers will be authorized to
open online bids submitted through the SAP SRM system irrespective of
the value of the tender as the bids are encrypted and cannot be opened
before the due/close date and time. Representative of user and Finance
is not required as it is compliant with IT Act 2000 and meets the
requirement of being tamper proof.
24.12. In the case of manual bids, it would be mandatory to invite all bidders,
irrespective of selective or public tender, to attend the opening of
Technical/ Price bids.
24.13. If for some reason, the tender opening date is declared a holiday by Air
India (at the station issuing the tender), then the tender closing/
opening date will automatically stand extended to the same timings of
the next working day.
24.14. In the case of online bids, bidder’s physical presence during the
technical and price bid opening is not required since the facility to view
the details of the bids online is available in the SAP SRM system.

MMAO 715

24.15. The price bid of only those vendors, found technically suitable during
technical evaluation would be opened. The opening date and time of
price bids would be intimated to all the qualified vendors to enable
them to attend the price bid opening.
24.16. The competent authority to approve opening of bids would be as given
in Annexure A - Column 2.
24.17. The authorized representative(s) of the bidders would only be allowed
to attend the bid opening. Such representative(s) must carry an
authorization letter on the letterhead of the bidder in the format as
given at Annexure G. Separate authorization letters would be required
for Technical and price bid opening. Air India reserves the right to
restrict the number of representatives of each bidder at its sole
discretion.
24.18. Details of the authorized representative(s) of the bidders, who
participate in the tender opening, are to be recorded in the format as at
Annexure H.
24.19. At the time of tender opening queries related to the tender, if raised by
the participants, are not to be entertained.
24.20. Bids received after the specified date and time should not be
considered.
*****

MMAO 715

25. EVALUATION OF TECHNICAL BIDS
25.1. Evaluation of the technical bids will be under the purview and the
responsibility of the user department.
25.2. If need be user department, may take help from other departments or
third-party agency may be taken / co-opted for technical evaluation.
25.3. The technical evaluation is to be done for the bids received against the
tender and only for the tendered specifications and terms & conditions.
25.4. A convener of the user department would be responsible for carrying
out technical evaluation of the bids. The Technical Evaluation Report
(TER) would be submitted to the Materials Management Department
duly approved by the Tender Committee (TC) member of the user
department as per the delegation of the financial powers as per
Annexure A - Column 2 or by an officer not less than a rank of Manager
or equivalent level for non-TC cases. The TER should clearly identify the
qualified and non-qualified bidders with justifications thereof.
25.5. The TER would be reviewed/scrutinized by the competent authority in
the Materials Management Department as per the Financial powers as
given in Annexure A - Column 3. In case of any discrepancy/ reasons for
acceptance or rejection of technical bids, or with regard to any aspect
of the TER, the competent authority in MMD may ask for review of the
technical evaluation. Observations would accordingly be conveyed to
the user department for their comments / review. Even after review if
the user department justifies their TER, then the decision of the user
department will be final. Thereafter, the price bids of the bidders
technically qualified by the user will be opened.
25.6. In the course of the technical evaluation of the bids, clarifications, if any,
regarding technical issues arising out of the quotations should be taken
up with the bidders directly by the user department in writing. However,
queries seeking information / clarifications on pricing aspects should not
be sought from the bidders. The shortfall information/documents
should be sought within a specified time, only in case of historical

MMAO 715

documents which were part of the tender document and pre-existed at
the time of the tender opening.
25.7. During the evaluation by the user some minor infirmity and / or
irregularity and / or non-conformity may also be found in some bids.
Such minor issues could be a missing page / attachment or illegibility in
a submitted document, non-submission of requisite number of copies
etc. Such minor issues should not result in disqualification of the bidder
as they do not constitute any material deviation or have a financial
impact. In such cases the bidder may be conveyed to submit the
necessary documents by a specified date.
25.8. Such request for clarifications, additional documents, and information
should be given preferably in writing by the user vide email/ letter,
asking the bidder to respond by a specified date, and also mentioning
therein that if the bidder does not comply or respond by the date, his
tender will be liable to be rejected. The time line should be reasonably
decided on the nature of the clarification. In case the bidder seeks an
extension to the deadline, for wider participation, the user/ buyer can
consider such an extension.
25.9. Facility visit of new vendors may be carried out as a part of the technical
evaluation under the recommendations and convener ship of the user
department, to assess the infrastructure, capability & capacity of the
bidder to manufacture and deliver the goods as per schedule in
accordance with the specification and other requirements of the tender.
The facility/factory visit forms a part of the technical evaluation and
hence is to be conducted by the user department. They can co-opt
members from Finance, Medical, MMD or any other department, if so
desired by them. The facility visit report is to be prepared by the
convener of the user department and submitted to the competent
authority in the user department for approval and acceptance of the
report.
25.10. Air India also reserves the right to inspect the facility/factory of any
other bidders including those who have been inspected earlier, any

MMAO 715

existing vendors / regular / present supplier at any time at its sole
discretion. Air India also reserves the right to inspect at random the
facility / site of the contractors / suppliers during phase of execution of
contracts /PO.
25.11. Such facility visits will also be followed in case of trial /development
orders for which representative of MM will be convener.
25.12. For multi user items the major user departments (preferably 2) may be
associated for carrying out the technical evaluation of the bids in
addition to a non-purchase Materials Management Department
representative, who would be the convener. The level of the Technical
Evaluation Committee would be as per the financial powers given in
Annexure A - Column 2.
25.13. Facility visit of the bidders for a specific item who have been successfully
supplying the requirement to Air India need not be carried out for every
tender of the same item, subject to such suppliers confirming
compliance with the technical specifications. However, it would be a
good practice to have the facility visit done every five to seven years,
even of the vendors who have been successfully supplying. The decision
of the user department to carry out the facility visit, would be final.
25.14. Deviations, if any, in the commercial parameters such as payment
terms, warranty, delivery period, if acceptable on the basis of the tender
evaluation criteria, should be reflected in the technical evaluation
report for the purpose of loading in the corresponding price bids
provided the same is mentioned in the tender documents.
25.15. The Materials Management Department will not be associated with
technical evaluation (including sampling) which is under the purview of
the user department.
*****

MMAO 715

26. EVALUATION OF PRICE BIDS/ AWARD CRITERIA
26.1. As pre-declared in the tender, the vendor whose nett price on a
common platform such as the landed cost at warehouse, ex-works, FOB,
CIF, etc. works out to be the lowest will be determined as the L-1 bidder.
26.2. As pre-declared in the tender, the L1 would be calculated line wise or
on overall L1 basis. In an overall L1 basis, it could so happen that for
some individual items the rate of the overall L1 may be higher than the
L2 or other bidders. In such a case, efforts should be made to match
these individual rates with that of the lowest individual rates. If the L-1
bidder does not agree to match the rates, efforts should be made to
negotiate a rate that is closer to the lowest rate for that individual item.
However, if the overall L1 bidder still does not match the individual
lowest rate, then the award may be placed on overall L1 bidder at his
quoted overall L1 rates.
26.3. Make in India and MSME preference should be taken into account while
calculating the L1 and the share of award among them as declared in
the tender document.
26.4. Suo-moto discounts and rebates after opening of the technical bid or
price bid should not be considered.
26.5. However, if that bidder who has suo-moto offered a discount becomes
L1 after the price bid opening then the offer of discount can be taken up
during negotiation.
26.6. Deviations, if any, in the commercial parameters such as payment
terms, warranty, delivery period, advance payment, etc. should be
loaded as spelt out in the Tender document.
26.7. If after due processing, it is discovered that the quantity to be ordered
is far more than what L-1 alone is capable of supplying, i.e. if the L-1 has
capacity constraints, then the quantity being finally ordered should be
distributed among the other bidders in a manner that is fair, transparent
and equitable at the L-1 rate. The final decision / adjudication regarding
the proportion of distribution of quantities will be decided by the

MMAO 715

competent authority in the Materials Management Department as per
26.8. In the case of manual bids, in the price quoted, if there is a discrepancy
between the unit price and the total price (which is obtained by
multiplying the unit price by the quantity), the unit price shall prevail
and the total price corrected accordingly, unless in the opinion of the
purchaser there is an obvious misplacement of the decimal point in the
unit price, in which case the total price as quoted shall govern, and the
unit price corrected accordingly.
26.9. If there is an error in a total corresponding to the addition or subtraction
of sub totals, the subtotals shall prevail, and the total shall be corrected.
26.10. If there is a discrepancy between words and figures, the amount in
words shall prevail, unless the amount expressed in words is related to
an arithmetic error, in which case the amount in figures shall prevail.
26.11. Such a discrepancy in an offer should be conveyed to the bidder asking
him to respond by a target date and if the bidder does not agree to the
observation, the bid is liable to be rejected.
*****

MMAO 715

27. RETENDERING /CALLING FOR PRICE BIDS
27.1. Retendering is to be resorted to if there is a change in specification by
the user department after opening of bids.
27.2. If there is any major infirmity in the tender document due to which the
whole specification, scope and meaning of the item/work changes.
27.3. If for any reason the L1 bidder backs out, there should be re-tendering.
The competent authority as per the Delegation of Financial Powers as
given in Annexure A - Column 2 may, in such a situation, call for a
selective or short notice tender to meet the immediate requirements.
27.4. In case the L-1 vendor backs out, either before issue of the Purchase
Order / Letter Of Intent (LOI), or subsequent to its issue, the L-1 bidder
should be debarred from participating in the next tender for the said
item and in more serious cases or repeated back out, the vendor will be
blacklisted for a minimum period of 3 years. This would, However, be
subject to the Purchase Order / LOI having been issued within the period
of validity of the quotation. In addition, the EMD / SD of the vendor
would also be forfeited.
27.5. In certain circumstances after the technical bids have been evaluated
but price bids have yet to be opened, it can so happen that there is a
change in GST or any other government levies or some drastic changes
in raw material pricing or some peculiar circumstances/situation arises
due to which there can be an impact on the prices. Under such
circumstances, only the price bids can be called for from the technically
suitable bidders.
*****

MMAO 715

28. LOADING CRITERIA IN CASE OF DEVIATION
28.1. The loading criteria as specified in Annexure E would be applied to the
landed price of the bid.
28.2. If the bidder asks for advance payment, the price bid of the bidder would
be loaded @ 10% per annum on the landed price, calculated on pro-rata
basis, or as per the loading criteria as defined in the tender.
28.3. In case of deviation with regard to the stipulated warranty period, the
price bid of the bidder would be loaded @ 10% per annum on the landed
price, calculated on a pro-rata basis.
28.4. In case of deviation with regard to delivery period beyond a pre-defined
tolerance (to be ascertained from the user at the time of tender
preparation), the price bid of the bidder would be loaded @ 0.5% per
week or part thereof.
*****

MMAO 715

29. RETURN OF BIDS OF DISQUALIFIED BIDDERS/ BIDS
RECEIVED LATE
29.1. In the case of online bids, the price bids of the disqualified bidders
remain unopened in the system in an encrypted form. Though these
bids remain in the system the same cannot be viewed / seen at any stage
by anyone (IT Act 2000 compliant).
29.2. In the case of manual bids, the price bids of the technically disqualified
bidders should be returned to them after finalization of the Purchase
Order / Contract.
29.3. The purchaser should intimate the technically disqualified bidders in
writing to collect their price bids in person, or through their authorized
representative within 10 days of acceptance of the Purchase Order by
the successful bidder in the format as per Annexure I (Part A). The
representative must carry an authorization letter on the company
letterhead.
29.4. An acknowledgement must be taken from the bidders or their
authorized representatives on collection of the bids by them as per the
format at Annexure I (Part B).
29.5. In case a bidder requests Air India to return back the Price Bid by post
then the same may be sent by registered post on receipt of an
undertaking from the bidder that they will be responsible for any loss or
damage to their bid in transit.
29.6. In the event a bidder fails to collect the price bid within the stipulated
30 days without reasonable grounds for extension sought thereof and
duly accepted by Air India, the bids should be shredded in “as is where
is” condition after expiry of 30 days or an extended period thereof as
agreed to by Air India, whichever is later.
29.7. Point 29.2 to 29.6 will also be applicable for the bids received after the
tender closing date/time.
*****

MMAO 715

30. SUBMISSION OF DOCUMENTS
30.1. All documents submitted in support of the requirement of the tender
should be in English/Hindi or the local language of the region issuing the
tender only. Documents in other languages, Indian or foreign, can be
submitted along with a translated copy in English or Hindi or local
language of the region issuing the tender duly notarized failing which
the bids may not be considered.
*****

MMAO 715

31. TERMINATION AND EXIT CLAUSE
31.1. The PO / contract should include a termination clause as below:
31.1.1. In case of unsatisfactory performance or breach of any of the
clauses of the contract, Air India would issue a notice of 30 days
to the party to rectify the breach and improve the performance
failing which Air India shall be at liberty to terminate this
agreement by providing another 30 days written notice to the
party. The party shall not have any right to dispute or question
the judgment of Air India of unsatisfactory performance of the
party.
31.1.2. Notwithstanding the above, Air India shall also be at liberty to
terminate the agreement for any reason including change in
situation/circumstances, etc. by providing to the party a 90
days written notice. The party shall also be at liberty to
terminate this contract by providing to Air India a 90 days
written notice. In such an event, the terminated party shall
have no right to claim compensation/damages, etc. from the
terminating party on account of early termination. However,
the party shall duly comply with their respective obligations
during the notice period and thereafter, shall discharge the
obligations arising out of the agreement till the termination.
31.2. In case the vendor serves the termination notice before exhaustion of
40% of the contract value or quantity, they will be debarred from
participating in the immediate next tender for that particular
item/service.
31.3. Depending on the nature of the item / service, the DGM and above of
the user department would be the competent authority to decide the
termination / exit period if it varies from the above standard
exit/termination clause which should be incorporated in the tender
document.
*****

MMAO 715

32. NEGOTIATIONS
32.1. As a general norm price negotiation are not to be carried out with the
bidders. Negotiations, if at all, shall be an exception and may be held
only in the case of procurement on single source basis, or in the case of
goods / services with limited sources of supply. If it is decided to hold
negotiations for better pricing, then it should be held with the L1 bidder
only. (and with the L2…L3 bidders and so on only in the in case of split
quantity). Counter offers tantamount to negotiations and should be
avoided. (CVC circular No. 4/3/07).
32.2. If it is felt that there is a scope for negotiation with the L1 bidder which
might lead to savings for Air India, then the negotiations may be carried
out with the approval of CA, Annexure A - Column 2.
32.3. The Materials Management Department would convene the
negotiation meetings, which would be conducted in the Materials
Management Department. Negotiations would be carried out by the
Tender Committee members (MMD/Finance and user) in accordance
with the delegation of financial powers as per Annexure A - Column 2.
The participation in negotiations should not generally be diluted by
delegating the function to a lower level officer. In case for some reason
the TC member cannot attend the price negotiation meeting, then
attending the meeting can be delegated to an officer one rank below
the TC member. However, the responsibility for signing and approving
the TC note will rest with the TC member.
32.4. In cases where negotiations are held, the same would be recorded in
the negotiation sheet as at Annexure M.
32.5. A copy of the negotiation sheet may be given to the negotiating party if
asked for by them.
32.6. In case L1 bidder does not attend the negotiation but sends a revised
bid with reduction in prices, the same should be considered. The terms
and conditions of the tender document would be applicable. In case of
any variation on terms and conditions, the clarifications should be
sought in writing through email/ letter.

MMAO 715

32.7. Similarly, after coming for the negotiation, if the negotiating party asks
for some time to submit its revised offer, the same may be accepted.
32.8. Any request from bidder for negotiation through video conferencing/
tele-conferencing should be considered. However, in such a case,
minutes of the conferencing should be prepared and sent to the bidder
for information/ revised negotiated bid in line with the video
conference/ teleconference.
32.9. Many a times’ bidders- both Indian and foreign, express their inability
to come just to attend the price negotiation. In such cases
correspondence for better pricing can be resorted to. Their final offer
should be in writing.
32.10. In case the negotiating party declines to attend the price negotiation
and states their quoted offer is final, then the original bid to be
considered as final.
32.11. The negotiations should be updated in the SRM system. The bidder can
view the same after logging in to the SRM system.
32.12. Counter – offers to L1 in order to arrive at an acceptable price, shall
amount to negotiation and is not acceptable. However, any counter –
offer to L-2, L-3 etc. (at the rates accepted by L-1) in case of splitting of
quantities, as pre – disclosed in the tender, shall not be deemed to be
negotiation [CVC circular No. 4/3/07& procurement of goods 207 point
7.5.9(iii)].
*****

MMAO 715

33. COMPOSITION OF TENDER COMMITTEE
33.1. Tender Committee will consist of appropriate level officers as given in
Annexure A - Column 2 from MMD, Finance, and the user department.
33.2. The Tender Committee (TC) will evaluate the bids/response of tenders
whose estimated value is ₹ 10.00 lakh and above.
33.3. Representation in the Tender Committee from the respective
departments should be strictly as per the levels as specified at Annexure
A - Column 2 and the same should not be diluted.
33.4. For stock items used by multiple departments, the TC will consist of
members from the Materials Management and Finance Department.
Additionally for staff related items such as uniform, long service
momentos, canteen provisions etc. Personnel/IR may also be
associated as a part of TC.
33.5. The TC note will be prepared by the Materials Management
Department. The user department/ Finance may suggest required
changes to the TC note to the concerned buyer in MMD. The changes/
amendments to the TC note will be carried out by MMD.
33.6. In SAP SRM system, the TC notes would be digitally signed.
33.7. Members of the TC should endorse the TC notes unconditionally. Should
a member have a difference of opinion with one or more of the
members of the committee, the same should be resolved before
finalization of the TC note.
33.8. The recommendations as contained in the TC note are to be put up to
the competent authority in MMD for approval in accordance with the
delegation of financial powers as at Annexure A - Column 3.
33.9. The members who are associated with the evaluation of a tender would
be required to give an undertaking that none of them has any personal
interest in the companies / agencies participating in the tender process.
A member having interest in any should refrain from participating in the
tender evaluation. The format for this undertaking is given at Annexure
F in case of manual bids. The Materials Management Department would
forward the format of the undertaking to the concerned user

MMAO 715

department along with the technical bids for evaluation, and the
evaluation committee members should sign the undertaking before
commencement of the evaluation. For online bids the same is to be
given in the SAP system itself.
*****

MMAO 715

34. LIQUIDATED DAMAGES/PENALTY CLAUSE
34.1. For stock items, unless otherwise notified in the tender, the LD/penalty
to be levied for delayed delivery would be @ 0.5% per week or part
thereof of the value of the undelivered portion of the goods or services
(excluding taxes and delivery charges) subject to a maximum of 10% of
the value of the undelivered part. This is to be recovered from the
invoice of the delivered consignment of the vendor, Security Deposit /
Performance Guarantee, or from the amount due to the vendor against
any invoice. This will be done after due notification to the vendor in
advance.
34.2. At the time of delivery / acceptance of the item / goods if it is found that
the items / goods so delivered is not as per the specification given in the
Contract/PO then Air India reserves the right to reject the entire lot and
get the entire quantity replaced free of cost by the bidder. The standard
penalty for delayed supplies @ 0.5% per week or part thereof, subject
to maximum of 10% would be applicable from the original delivery
schedule.
34.3. However, if such rejected consignment bear Air India Logo then such
rejected lots / consignment may not be returned to the bidder to
prevent its misuses. Even in case the rejected lot is returned to be
bidder, the vendors should ensure that it is not misused, and an
undertaking should be taken from the vendor to the effect. However,
the vendor has to supply the quantity equivalent to the rejected
quantity free of cost. In such a case, the standard penalty for delayed
supplies @ 0.5% per week or part thereof, subject to maximum of 10%
would be applicable from the original delivery schedule.
34.4. However, in case of exigencies where such items are required to be
accepted for minor deviations from the specifications of the
Contract/PO, due to the possibility of services being affected then
depending on the extent and nature of the deviations, such
consignment may be accepted at the sole discretion of Air India user

MMAO 715

department, by imposing an appropriate penalty subject to a maximum
of 15% of the invoice value of the lot.
34.5. In case of any complaint on the quality issue at the time of use of the
item / goods by Air India, caterers or any other stakeholders of Air India
after acceptance of the delivery then depending on the nature and
extent of the deficiency, Air India user department reserves the right to
impose an appropriate penalty on the total value of the lot supplied,
subject to maximum of 15% on the invoice of the consignment / lot.
34.6. In case of any complaint from passengers or any other stake holders
regarding presence of any foreign body, the successful bidder will
indemnify Air India against any claims for damages or legal action
initiated in this regard. Additionally, depending on the gravity of the
complaint an appropriate penalty on the total invoice value of the lot
supplied, subject to a maximum of 15% may be levied by Air India user
department.
34.7. However, if after the receipt of material or during usage, it is observed
there is major deviation in the specifications, wherein the obvious intent
of the vendor is to compromise on quality and specifications to have
financial gain, same will be dealt with separately including recovery of
the differential for the deviation besides the 15% penalty at Point 34.6.
34.8. If no remedial action to the satisfaction of Air India user department has
been taken and complaints continue to persist regarding quality issues
then based on the recommendations of the user department, Air India
reserves the rights to cancel the Contract / PO and take appropriate
penal action / debar the vendor from participating in the next tender /
black list the vendor for 3 years as deemed fit depending on the merit
of the case.
34.9. For non-stock goods and services, that are directly received by the
department, the user department should indicate in the shopping cart /
requisition the quantum of penalty to be imposed on account of delays
/ deficiencies, if any, with regard to the delivery of the goods / services.
The tender should incorporate the same accordingly. The actual penalty

MMAO 715

to be imposed would be directly conveyed by the user department to
Finance keeping in view the penalty clause stated in the contract / PO.
In the case of user not mentioning any penalty clause in the shopping
cart, standard penalty clause for delayed supplies of @ 0.5% per week
or part thereof, subject to maximum of 10% would be applicable.
34.10. For non TC cases, DGM-MM and above would be the competent
authority to waive the penalty clause before placement of the
contract/PO, after recording the reasons thereof. For TC cases, the
tender committee would be the competent authority to waive the
penalty clause.
34.11. GM-MM and above would be the competent authority to waive the
penalty clause post release of the contract/PO.
34.12. Manager and above of the department concerned would be the
competent authority to levy the quantum of penalty in accordance with
the provision of the contract/PO.
34.13. Any review of the penalty levied in point 34.12, can be done by an officer
one level higher than the officer of the same department levying the
penalty.
34.14. In case of acceptance of delivery of Goods/Services by the user beyond
the stipulated delivery date, and in the absence of any remark regarding
imposition of penalty/ liquidated damages, it is presumed that the
LD/penalty clause for delayed deliveries is not to be applied for such
cases.
*****

MMAO 715

35. ROLE OF TC MEMBERS
35.1. Role of the TC member of the Materials Management Department
would be as under:
35.1.1. As the competent authority in accordance with the delegation
of financial powers, vide Annexure A - Column 2, to take
decision regarding tender processing and sourcing, type of
tender to be floated, number of vendors to whom the tender
enquiry should be sent in a selective/limited tender etc.
35.1.2. To evaluate the commercial terms and conditions of the
technical bid such as EMD, SD, Payment Terms,
Exit/Termination clause etc.
35.1.3. To prepare the price comparative statement after opening of
the price bids.
35.1.4. To ensure that the laid down purchase procedure has been
followed.
35.1.5. To prepare the TC note.
35.2. Role of the TC member of the Finance department would be as under:
35.2.1. To see the price bids and the comparative statement prepared
and vet the comparative statement of the price bids prepared
by MMD.
35.2.2. To verify the applicability of tax codes and applicable GST.
35.2.3. To evaluate the commercial terms which have financial
implication.
35.2.4. To assist the user department in framing/evaluating the
financial parameters such as turnover, balance sheet etc. to be
incorporated in the Pre-Qualification bid.
35.3. Role of the TC member of the user department would be as under:
35.3.1. To vet the comparative statement of the technical bids
prepared by the user department and approve the Technical
Evaluation Report (TER).
35.3.2. To vet the comparative statement of the price bids.
35.3.3. To ensure budgetary provision for the estimated expenditure.

MMAO 715

35.3.4. To ensure the correct reflection of the TER in the TC.
*****

MMAO 715

36. TIME FRAME FOR COMPLETION OF TENDER EVALUATION
36.1. A definite time schedule should be laid down for each stage of bid
evaluation (Technical / Price bid). Similarly, a time frame for according
approval for each stage of the tender process (Technical Evaluation
Report / Price Evaluation Report / decision for conducting negotiations,
if applicable / award of PO / Contract) should be laid down which should
not exceed 15 days for each stage of approval. In any case the overall
time for the aforementioned processes should be within the validity
period of the tender (CVC Circular No. 4/3/07 dated 3/3/2007).
36.2. Time frames at each stage of the tendering process will generally be as
under:
36.2.1. The Materials Management Department to finalize the tender
document after receipt of the specifications / work scope and
other parameters including clarifications, if any from the user
and vetting by the user department (as and where required) -
15 days.
36.2.2. Bidding/ response time for the bidders – 21 days Max. In case
of extension, additional 12 days max for each extension.
36.2.3. Evaluation of the technical bids, as and where applicable – the
technical evaluation should be completed by the user
department in 15 days.
36.2.4. Evaluation of the price bids and price negotiation – 10 days.
36.2.5. Preparation of the TC Note by the Materials Management
Department – 5 days.
36.2.6. Approval of the TC note by the TC Members – 5 days.
36.2.7. Placement of P.O. – 5 days.
36.3. If for some reason the timelines cannot be met, and an explanation is
called for then the same should be submitted by the concerned
personnel to the competent authority of the individual department.

MMAO 715

36.4. For non-TC cases, the procurement process to be completed within 60
days.
*****

MMAO 715

37. EXTENSION OF PERIOD OF CONTRACTS/PURCHASE
ORDER
37.1. Contracts/Purchase Orders covering a specific period may be extended
for a further period of maximum 12 months subject to the following:
37.1.1. The initial order was finalized after following the laid down
tender procedure.
37.1.2. The quantities/value to be ordered under the extended order
period should not result in an increase in quantity/value from
the original order, i.e. only the shortfall in supplies from the
original ordered quantity/value may be covered under the
extended order(s).
37.1.3. The rate, terms and conditions of the Contract/PO would
remain unchanged. However, the government levies would be
paid at actuals as applicable as on the date of the extension.
37.2. The extensions can be multiple times subject to the overall period of
such extensions not exceeding 12 months from the date of expiry of the
initial PO, and subject to the extended quantity/value for all the
extensions taken together not exceeding that in the original PO.
37.3. Such extensions are to be approved by the competent authority in the
Materials Management Department as per the delegation of financial
powers (Refer Annexure A - Column 2), and the reasons for the same
are to be placed on record.
37.4. If the extension of order is a technical requirement of the SAP system,
i.e. for processing of invoices received after the expiry of the initial order
due endorsement to this effect is to be made in the extended P.O. in
such cases.
37.5. GM-MM & above will be competent authority to approve extension
beyond 12 months. The reasons for the same to be recorded in writing.
37.6. Re-appropriation of quantity and value is permitted during the extended
period of the contract.
37.7. TC procedure would not be required.
*****

MMAO 715

38. REPEAT CONTRACTS/ORDERS
38.1. Repeat Contracts/Orders may be resorted to, provided the following
conditions are met:
38.1.1. The initial Contract/Order was finalized after following the laid
down purchase procedure.
38.1.2. The quantity under Repeat Contract/Order does not exceed
the quantity ordered against the initial Contract/Order.
38.1.3. The basic price remains unchanged.
38.1.4. The GST & other tax components may vary.
38.2. Placement of Repeat Contract/Orders within 6 months of the expiry of
the initial Contract/Order, can be approved by the Competent Authority
as given in Annexure A - Column 2, provided the cumulative quantity so
ordered does not exceed the initial Contract/Order quantity, i.e. if the
initial Contract/Order with validity of 24 months was, say, for qty 100,
then more than one Repeat Contract/Order can be placed within 30
months of the initial Contract/PO date subject to the total qty against
all such Repeat Contract/Orders not exceeding qty 100.
38.3. Other parameters remaining the same, placement of Repeat
Contract/Orders beyond 6 months of the expiry of the initial
Contract/Order would require the approval of ED-MM.
38.4. Beyond the first Repeat Contract/Order i.e. for Second Repeat
Contract/Order and for quantities beyond the original Contract/Order
quantity, approval of ED-MM would be required to place further Repeat
Contract/Order.
38.5. TC procedure would not be required.
38.6. Wherever the repeat contract/ PO is released on the authorized
distributor/s or dealer/s or channel partners, the copy of the same
should also to be forwarded to the OEM/ Principal/ Manufacturer
*****

MMAO 715

39. EMERGENCY PURCHASES BY THE DEPARTMENTS
39.1. In case any goods / service(s) are required on urgent / emergency basis,
the departments are empowered to procure the goods / service(s)
directly to meet such situations.
39.2. The value limits for a single instance of such an emergency procurement
is ₹ 50,000/-.
39.3. Goods/services availed of under this provision should be ratified/
certified by the user department and forwarded to Finance directly for
payment purpose.
39.4. The PO will not be raised by the Materials Management Department for
such purchases.
39.5. Invoices / Bills will be certified by the concerned departments and
directly settled by the Finance Department.
*****

MMAO 715

40. WAIVER OF PURCHASE PROCEDURE
40.1. For requirements of items/services above ₹ 50,000/-, which are of an
immediate/urgent nature and where the timely supply is not possible
under the laid down procurement procedures, the user / indenter would
be promptly advised about the same by the Materials Management
Department. The user / indenter would thereafter prepare detailed
justifications for the urgency of the requirement, duly recommended at
the level of Dy. General Manager and above of his / her department,
and submit the same to the Materials Management Department for
taking priority action for procurement. For such immediate / urgent
requirements, where the estimated procurement value exceeds ₹
50,000, procurement may be authorized by officials as under through
waiver of the purchase procedure:
Authority level of the Order Value (₹) Report to Authority level
Materials in the Materials
Management Management
Department Department
Sr. Manager Up to 60,000 Asst. General
Manager
Asst. General Up to 75,000/- Sr. Asst. General
Manager Manager
Sr. Asst. General Up to ,100,000/- Dy. G M
Manager
Dy. G M Up to 2,00,000/- General Manager
General Manager Up to 4,00,000/- Executive Director -
Materials Management
Executive Director – Up to Director- Finance
Materials 10,00,000/-
Management
40.2. For order value up to ₹ 50,000 the user department may directly take
action for procurement from GeM or outside of GeM. No PO for such
purchases up to ₹ 50,000/- will be released by MMD and the user has to
settle the invoices directly with finance.

MMAO 715

40.3. Any purchase on waiver basis above ₹ 10.00 lakh would require the
approval of Director-Finance.
40.4. POs are to be released for purchases made on the basis of waiver of the
purchase procedure above ₹ 50,000/-.
*****

MMAO 715

41. BUY BACK OPTION
41.1. When it is decided by the user / indenting departments to replace any
of their existing old items / goods with the latest versions or better
substitutes, the department may request the Materials Management
Department to trade such existing goods while purchasing the new
ones. For this purpose, an appropriate buy-back clause is to be
incorporated in the tender document so that interested bidders may
submit their tenders accordingly. The condition of the old item, its
location and the mode of its handing over to the successful bidder are
also to be incorporated in the tender document.
41.2. For capital items, the AR for the item/s to be procured against buy-back
options should be routed through the Finance Department and should
be countersigned by the appropriate authority in Finance. The
requisition should be raised thereafter and forwarded to the Materials
Management Department along with the authority of Finance
department for further action.
41.3. In the GST regime, the buy-back is considered as a sale. Therefore, the
PO would reflect the total value of the new item(s) being procured. The
buyback value is to be given in the Terms and Conditions.
41.4. A tax invoice for the buyback value is to be raised by Finance and given
to the vendor to enable him to pick-up the buyback item(s). It would be
the responsibility of the user department to liaise and coordinate with
Finance for the requisite tax invoice.
41.5. The invoice also be raised for the total value of the new item(s) being
procured and a credit note for the value of the buyback to be submitted
along with the original invoice.
41.6. It would be the responsibility of the user department to facilitate the
inspection of the buy-back item(s) to all the bidders interested in
bidding for the same.
41.7. The user department will be responsible for ensuring that the
condition/quantity of the buy-back item(s) remains the same as during
the inspection period. Any conflict with regard to condition/quantity of

MMAO 715

the buy-back item(s) shall be resolved by the user department and the
successful bidder.
41.8. The user department would be responsible for issuing the buy-back
item(s) and facilitating the vendor in terms of documentation like gate
pass, approvals from the concerned authorities, etc.
*****

MMAO 715

42. PUBLISHING OF DETAILS OF AWARD OF CONTRACTS / PO
ON THE WEBSITE
42.1. A summary of the contracts / purchases made above ₹ 10.00 lakh is to
be posted on the Air-India website on monthly basis.
42.2. The details to be posted would be in the format as given at Annexure B.
*****

MMAO 715

43. PURCHASE ORDER AMENDMENTS
43.1. The PO / Contract is to be amended whenever the period of contract is
extended. Approval of the TC would not be required in such cases. Such
amendments would require approval of the competent authority as per
43.2. There could be situations where the total quantity of the contract has
been exhausted much before the expiry of the contract period. This may
be due to various reasons such as wrong projection of requirement by
the user department, change in schedules, patterns etc. during the
contract period. Under such circumstances it will be in order to add
additional quantities on a pro-rata basis subject to maximum 25% of the
initial contract/PO quantity to cover the contract period. In such cases,
approval of the TC would be required.
43.3. The PO / Contract is to be amended whenever there is any change in the
terms and conditions. In such cases, approval of the TC would be
required.
43.4. The PO / Contract is to be amended when there is an increase, decrease
in GST or any other Government levies, etc. In such cases, approval of
the TC would not be required.
43.5. In the case of multiple items/services in a contract, if the quantity or
value of any of the item/service is exhausted prior to the validity of the
contract, but there is sufficient value available against the other
items/services, then the user department can advise re-appropriation
of the quantity and value of the individual items within the contract
value. In such cases, approval of the TC would not be required.
43.6. The above is also applicable in the case of an item/service across
multiple region/ station/ location of a centralized contract. In such
cases, approval of the TC would not be required.
43.7. In the case of Option clause being invoked, approval of the TC would not
be required.
*****

MMAO 715

44. GST & OTHER GOVT LEVIES AND TAXES
44.1. GST and any other government levies wherever applicable should be
asked separately in the price bid format of the tender.
44.2. The tender document should clearly state that the bidders must specify
the applicable GST rates both in terms of percentage and absolute
figure. All-inclusive prices should not be encouraged.
44.3. GST and other Government levies, taxes, cess, etc. should not be
avoided by changing the delivery locations.
44.4. If the GST is increased or decreased or any new government levies are
introduced during the validity of the contract period, then the same
shall be applicable at the time of availing of the services, or supply of an
item and shall be payable.
*****

MMAO 715

45. PAYMENT TERMS
45.1. Payments to vendors shall be effected through the Finance department.
45.2. The preferred mode of payment to Air India vendors by Finance
department is through ECS / NEFT / RTGS. Therefore, the vendors are
to submit their bank details to Finance for electronic transfer of funds.
Finance Department would be required to liaise and coordinate with
vendors for capturing bank details.
45.3. The standard corporate payment terms are “Payment within 60 days of
receipt of invoice or goods/ services whichever is later” and should be
incorporated in the tender document. For deviations in the payment
terms the loading criteria should be applied for comparison purpose as
shown in Annexure E.
45.4. The Payment terms for MSME vendors would be within 45 days as per
MSME guidelines (or as revised by the authorities from time to time).
45.5. The contract / PO price will be normally paid in the currency in which
the price is stated in the contract / PO.
45.6. Invoice wise payment details are to be promptly made available by the
Finance Department to the respective vendor/s as and when payments
are released.
45.7. Depending upon the merit of the case, Manager and above would be
the competent authority to authorize change in payment period, other
than advance.
*****

MMAO 715

46. ADVANCE PAYMENT
46.1. Advance payment should generally be discouraged. If payment of
advance is unavoidable, in cases of AMC, Turnkey contracts etc. then
efforts should be made for payment against delivery. However, if still
the advance payment is to be made, then the same can be allowed. In
such cases, the company’s interest must be safeguarded by obtaining
bank guarantee equal to the sum of the advance payment from the
supplier with sufficient validity. Such advance payments, should be
interest bearing. The amount of interest would be applicable at the rate
of 10% per annum on the whole amount of advance and not part
thereof. Advance payments should not generally exceed the following
limits(Manual for procurement of goods 2017 point 6.5):
46.1.1. Thirty percent of the contract value to private firms.
46.1.2. Forty percent of the contract value to a state or central
government agency, or to a Public Sector Undertaking.
46.1.3. In case of maintenance contracts, the advance amount should
not exceed the amount payable for six months under the
contract / PO.
46.2. Sr. Manager and above would be the competent authority to approve
the advance payment as per the limits reflected above.
46.3. For non TC cases, the ceilings mentioned above may be relaxed by the
competent authority at the level of Dy. General Manager – Materials
Management and above.
46.4. For TC Cases, the Tender committee would be the competent authority
to authorize advance payment.
46.5. The advance payment terms must be clearly reflected in the contract /
PO.
46.6. Payment in respect of pro-forma / advance payment should be certified
as per Annexure A - Column 2, based on the invoice value, irrespective
to the signatory of the Contract/PO, subject to such terms of payment
being reflected in the Contract/PO.

MMAO 715

46.7. The buyer should ensure that the final invoice is submitted by the
vendor after receipt of the item. The final invoice is required to be
forwarded to Finance department for settlement of the advance
payment.
46.8. Payment against delivery is not to be treated as an advance payment,
However, the processing of the same in SAP system would be against a
proforma invoice and processed as an advance. The proforma invoice
can be certified by the officer of purchase section as per Annexure A -
Column 2, based on the invoice value, irrespective to the signatory of
the Contract/PO, subject to such terms of payment being reflected in
the Contract/PO.
*****

MMAO 715

47. EXCHANGE RATE
47.1. All offers are to be converted into INR if the responses are in multi-
currency (typically in the case of a Global tender). In such cases the IATA
exchange rate as released on monthly basis by Finance and prevalent on
the day of opening of the technical bid would be taken as the exchange
rate for conversion and comparison purpose of price bids as well as for
all other processes related to tenders.
47.2. If all the responses / quotations are in the same foreign currency say
USD or EURO etc. then the comparison may be made in the currency of
response. However, it would also be a good practice to also reflect the
same in INR for reference purposes.
*****

MMAO 715

48. STORES INSPECTION / PRODUCTION SAMPLE
48.1. For multi departmental stock items, the receipt section of the Materials
Management Department at the receiving places, will undertake
inspections.
48.2. For captive stores stock items such as In-flight, Engineering, etc., the
respective departments would be responsible for carrying out the
inspection.
48.3. The Receipt Section should ensure that the vendors submit the Quality
Assurance Certificate (QAC), wherever so indicated under the terms of
the contract / PO.
48.4. For the inspection of items, if required, assistance may be taken by the
user department, from other departments or specialized agencies such
NTH, BTRA, NITRA, Textile Committee etc. Government agencies or their
accredited partners should be preferred.
48.5. For multi departmental stock items, approved sample/s should be
retained at receipt section till receipt of the last supply for the purposes
of comparison.
48.6. For captive stores items, the production samples are to be retained and
preserved (subject to the nature of the items) by the user till the
completion of supplies / contract. The user department should also
forward such approved production samples at regions / stations where
the supplies are received directly and inspection is done centrally.
48.7. While the prerogative of inspection of incoming supplies is by the User
Department, however, if on physical / visual examination, if any
significant deviation noticed by receiving section of MMD, same be
highlighted / brought to the attention of the User Department while
carrying out the inspection. The final decision for acceptance or
otherwise will remain with the User Department.
48.8. DGM & above in MMD are authorize to offer any random samples from
the stock for lab test, if in their opinion it is so warranted to check
conformity with the specifications of the contract / PO. This may be

MMAO 715

done even if such supplies have been accepted by the User Department
and the system has been updated.
*****

MMAO 715

49. PRE DELIVERY / DISPATCH INSPECTION
49.1. Pre delivery / dispatch inspection is generally conducted during various
stages of the production process (which is known as stage inspection) or
on production of the finished products, but before dispatch of the goods
from the suppliers premises.
49.2. The requisitioning / user departments would be responsible for carrying
out pre-delivery inspections.
49.3. If need be user department, may take help from other departments or
third party inspection agency may be taken / co-opted for such
inspections.
49.4. Representatives of MMD & Finance may also be co-opted by the user
department, if so required. The convener of the committee will be the
representative from the user department.
*****

MMAO 715

50. VARIATION OF QUANTITY
50.1. To take care of any change in the requirements during the period
starting from issue of tender till placement of the contract / Purchase
Order, a plus/minus tolerance clause should be incorporated in the
tender document, reserving the purchaser’s right to increase or
decrease the quantity of the required goods up to that limit without any
change in the terms and conditions and prices quoted by the bidders.
50.2. While awarding the Purchase Order, the quantity ordered may be
increased or decreased, if necessary, within the prescribed plus/minus
tolerance limits.
50.3. The variation limit should not be more than plus/minus 25% (Twenty-
five percent) (Manual for procurement of Goods 2017, clause 7.5.3).
*****

MMAO 715

51. OPTION CLAUSE
51.1. In case of long running contracts, to take care of any change in the
requirement during the contract period, a plus/minus option clause of
25% (Twenty-five percent) may be included in the tender document,
reserving purchaser’s right to increase or decrease the required goods/
services up to that limit without any change in terms and conditions and
prices quoted by the bidders (Manual for procurement of Goods 2017,
clause 7.5.4).
51.2. Variation of Quantity clause and Option clause may co-exist in a tender.
*****

MMAO 715

52. EXCESS SUPPLY
52.1. Maximum of 5% of the PO quantity can be accepted as excess supply
against a PO due to case size / lot size, MOQ / MSQ or for any other
genuine reasons.
52.2. The excess supply can be against the purchase order quantity and not
against the contract quantity.
52.3. Excess quantity should be part of the open receipt and should not be
received after all the quantities against the order have already been
received. E.g. If the purchase order is for 100 units, and 105 units have
been received, the same can be accepted. However, the receipt is to be
done for the entire quantity of 105 units and not split as 100 units + 5
units as the purchase order will get close after the receipt of the total
ordered quantity of 100 units.
52.4. Vendors’ invoices for the excess quantity to be processed for payment
by the Finance Department without a reference, or an amendment to
the PO.
*****

MMAO 715

53. FALL CLAUSE
53.1. The vendor should ensure to pass on the benefits of fall in prices due to
change in input cost, raw material prices, concessions availed, Govt
levies, or for any other reasons. A suitable clause to this effect should
be incorporated in the tender document/ Contract/PO. This is applicable
for both goods and services.
53.2. In case the vendor supplies or quotes a lower rate for the same
item/service, to other organizations, during the period of the contract
and having same terms and conditions, then they should also supply Air
India at the same lower rate from the date of the lower rate being
applicable to the other organizations.
53.3. In case, it is observed that the vendor has not passed on the lower rate
to Air India from the applicability period, then the vendor should
reimburse the difference for the supplies during such period.
53.4. The onus of informing Air India about the fall in rates rests with the
vendor.
53.5. The provision of fall clause will not apply to the following:
53.5.1. Export/ Deemed export by the supplier.
53.5.2. Sale of goods or services as original equipment prices lower
than the price charged for normal replacement.
53.5.3. Sale of goods, such as medicines, food items, which have shelf
life expiry date.
53.5.4. Sales of goods/ services prior to entering the existing contract.
53.5.5. If the quantity, volume, terms and conditions of the contract
are different than the existing contracts, e.g. if the existing
contract is for 60 days payment terms whereas the supplier
offers the same good or service to another organization with
payment terms as advance or 30 days, etc.
*****

MMAO 715

54. FORCE MAEJURE
54.1. A Force Majeure (FM) means extraordinary events or circumstance
beyond human control such as an event described as an act of God (like
a natural calamity) or events such as a war, strike, riots, crimes (but not
including negligence or wrong-doing, predictable/seasonal rain and any
other events specifically excluded in the clause). An FM clause in the
contract frees both parties from contractual liability or obligation when
prevented by such events from fulfilling their obligations under the
contract. An FM clause does not excuse a party’s non-performance
entirely, but only suspends it for the duration of the FM. The vendor has
to give notice of FM as soon as it occurs and it cannot be claimed ex-
post facto. There may be a FM situation affecting the purchase
organization only. In such a situation, the purchase organization is to
communicate with the supplier along similar lines as above for further
necessary action.
54.2. If the performance in whole or in part or any obligation under this
contract is prevented or delayed by any reason of FM for a period
exceeding 90 (Ninety) days, either party may at its option terminate the
contract without any financial repercussion on either side.
54.3. Notwithstanding the punitive provisions contained in the contract for
delay or breach of contract, the supplier would not be liable for
imposition of any such penalty so long as the delay and/or failure of the
supplier in fulfilling its obligations under the contract is the result of an
event covered in the FM clause.
*****

MMAO 715

55. DISPUTE RESOLUTION
55.1. Normally, there should not be any scope for dispute between the
purchaser and supplier after entering into a mutually agreed valid
contract. However, due to various unforeseen reasons, problems may
arise during the progress of the contract leading to a disagreement
between the purchaser and supplier. Therefore, the conditions
governing the contract should contain suitable provisions for settlement
of such disputes or differences binding on both parties. The mode of
settlement of such disputes/differences should be through arbitration.
However, when a dispute/difference arises, both the purchaser and
supplier should first try to resolve it amicably by mutual consultation. If
the parties fail to resolve the dispute within 21 (Twenty-One) days, then,
depending on the position of the case, either the purchaser or supplier
should give notice to the other party of its intention to commence
arbitration. When the contract is with a domestic supplier, the
applicable arbitration procedure shall be as per the Indian Arbitration
and Conciliation Act, 1996. While processing a case for dispute
resolution/ litigation/ arbitration, the Procuring Entity is to take legal
advice, at appropriate stages.
55.2. Arbitration Clause
If an amicable settlement is not forthcoming, recourse may be
taken to the settlement of disputes through arbitration as per the
Arbitration and Conciliation Act 1996. For this purpose, when the
contract is with a domestic supplier, a standard arbitration clause
may be included in the tender document indicating the
arbitration procedure to be followed. The venue of arbitration
should be the place from where the contract has been issued.
55.3. Foreign Arbitration
The Arbitration and Conciliation Act 1996 has provisions for
international commercial arbitration, which shall be applicable if
one of the parties has its central management and control in any
foreign country.

MMAO 715

55.4. When the contract is with a foreign supplier, the supplier has the option
to choose either the Indian Arbitration and Conciliation Act, 1996 or
arbitration in accordance with the provisions of the United Nations
Commission on International Trade Law (UNCITRAL) arbitration rules.
55.5. The arbitration clause with foreign firms should be in the form of self-
contained agreements. This is true especially for large value contracts
or those for costly plant and machinery. The venue of arbitration should
be in accordance with UNCITRAL or arbitration rules of India, whereby
it may be in India or in any neutral country.
*****

MMAO 715

56. RECEIPT CERTIFICATION- FOR MMD GENERATED POS
56.1. For direct delivery to user:
56.1.1. All non-stock and asset items would be delivered by the vendor
directly to the end user.
56.1.2. The user shall acknowledge the vendor’s challan/ invoice for
having received the goods.
56.1.3. The user shall also generate confirmation in the SAP system.
The confirmation number thus generated by the SAP system
should be reflected on the delivery challan/ invoice.
56.2. For stock items :
56.2.1. Receipt certification will be done by the Receipt Section of the
Materials Management Department.
56.2.2. The receipt section will acknowledge the party’s / vendor’s
challan / invoice for having received the goods.
56.2.3. The receipt section will generate a receipt in the SAP system.
56.3. For Services:
56.3.1. The Requisitioner/ User department / receiver of the services
will acknowledge services received, through his signature on
the service report.
56.3.2. In addition to the above, the Requisitioner / User department
shall acknowledge the services rendered in the SAP system by
generating a confirmation number to facilitate further
processing by the Finance department for payment.
*****

MMAO 715

57. INVOICE PROCESSING-FOR MMD GENERATED POS
57.1. Invoices should be submitted to the Invoice Processing Section,
Materials Management Department along with Challan /GRN/ System
Confirmation number.
57.2. Three way matching of PO, GRN and Invoice shall be done through the
SAP system.
57.3. The Invoice Processing Section of MMD will do the matching for
validation purpose and park the invoice. The Challan / Invoice need to
carry only the MAT DOC reference No. for having parked the invoice and
the same will be forwarded to the Finance Department by Invoice
Processing Section, MMD under a covering letter for payment purpose.
Finance department would acknowledge, in writing, the receipt of the
same.
57.4. As all the invoices would be processed through the SAP system, no
separate certification would be required from the Materials
Management Department.
57.5. For any reason, if the original challan or invoice is not available/ lost in
transit then payment would be processed on the duplicate challan/
invoice, duly signed and stamped by the receiver. However, an
undertaking on the company’s letter head should be submitted to Air
India as per Annexure L.
57.6. Whenever online Invoicing module is activated, the supplier would
create/submit invoice through the SAP system only. No physical copy
of the Challan and Invoice would be submitted by the vendor. Three-
way matching will be done by the SAP system and payment to be
effected by Finance accordingly.
*****

MMAO 715

58. STANDARDIZATION
58.1. Some items like PCs, office equipment, furniture, vehicles, Air
conditioners etc. are used by multiple departments. In the interest of
achieving economies of scale, uniformity in products to the extent
possible across the organization and simplify the procurement process
and subsequent maintenance activities, Executive Director – Materials
Management or any other Dept. Head may appoint a Committee for
standardising a particular item. The committee will constitute members
from MMD, Finance and the relevant departments, such as DIT for IT
and office equipment, PFD for Air conditioners, Ground Support for
Vehicles, etc.
58.2. The purchase of the items, so standardised, shall be processed in line
with the recommendations of the Standardisation Committee.
58.3. The normal tender procedures would be followed for fixation of rates
for standardized products. For placement of POs based on these rates
further approval of the TC would not be required.
58.4. Standardisation will be for a defined period not exceeding three years.
*****

MMAO 715

59. MATERIAL REJECTION INTIMATION
59.1. At the time of delivery / acceptance of the item / goods if it is found that
the items / goods so delivered are not as per the specification given in
the Contract/PO then Air India reserves the right to reject the entire lot
and get the entire quantity replaced free of cost by the bidder.
59.2. However, if such rejected consignment bear Air India Logo then such
rejected lots / consignment may not be returned to the bidder to
prevent its misuses. However, the vendor has to supply the quantity
equivalent to the rejected quantity free of cost. Even in case the
rejected lot is returned to the bidder, the vendors should ensure that it
is not misused and an undertaking should be taken from the vendor to
the effect.
59.3. Materials rejected by the user, should be informed to the vendor and
the concerned purchase office, within 5 working days. The vendor
should collect back the material within 15 days of intimation of
rejection, beyond this Air India reserve the right to charge rentals /
demurrage @ ₹ 500/- per day. Beyond 30 days from the date of
intimation, Air India will be at liberty to dispose of the material as it
deems fit, if the supplier does not pick up the rejected material in spite
of the notification.
59.4. For stock items, DGM-MM would be the competent authority to waive
the demurrage charges depending upon the merit of case.
For non-stock DGM of the user department would be the competent
authority to waive the demurrage charges.
*****

MMAO 715

60. BUDGETING
60.1. Budgeting allocation would be done by Finance Department in the SAP
system.
60.2. It would be the responsibility of the user to advise Finance Department
the funds required for the financial year at each business area/ fund
Center and GL. This will be for Revenue Budget.
60.3. Finance department would allocate funds in SAP system based on the
inputs received from the user department.
60.4. The user department shall ensure that the sufficient funds are made
available prior to raising any Purchase Order.
60.5. In the case of capital items, the user department should ensure
sufficient funds are available in the AR before placement of the
Purchase Order.
60.6. On release of the purchase order, the system shall automatically debit
the PO value from the allocated budget head.
60.7. For any shortfall in the budget during the financial year, the user
department will be responsible to liaise with Finance and getting
additional budget in the system.
*****

MMAO 715

61. CONTRACT ADMINISTRATION
61.1. Generally, for long term rate contracts, the tender should be floated for
a period of 24 months. In case of commodity items like oil, gases etc.
the period of contract can be 12 months due to the volatile nature of
the item and for AMCs it can be 36 months.
61.2. The contract administration would be the sole responsibility of the user
department.
61.3. The user department would be responsible for day-to-day monitoring of
the contract as per the terms as specified in the contract.
61.4. For items and services received directly by the users, the quantum of
penalty to be levied in case of any underperformance or deviation from
the deliverables will be determined by the competent authority in the
user department, and the same advised to the Finance department.
61.5. With regard to the SLA, the user department would be responsible to
resolve any conflict with the vendor. Materials Management
Department may be kept informed for vendor performance and
appraisal.
61.6. At the end of the contract period, in the absence of any intimation by
the user department of serious breach of contract by the vendor during
the course of the contract and to withhold their SD/PBG, MMD would
advise Finance for the release of the same, on completion of the
warranty / contract period.
61.7. The user department would be responsible for compilation and
submission to the concerned authorities the details of export
obligations for goods imported against the licenses such as EPCG, etc.
61.8. In the context of facilitation of execution of contracts, the individual
departments would be responsible for activities such as issuance of gate
pass for items / equipment, entry pass for contractor’s personnel,
facilitation of issuance of BCAS / AAI passes, airport regulator passes,
liaison with the Security Department for police clearance certificate of
the contractor’s personnel wherever required, provision of space and
infrastructure, etc.

MMAO 715

61.9. In the case of multiple items/services in a contract, if the quantity or
value any of the item/service is exhausted prior to the validity of the
contract, but there is sufficient value available against the other
items/services, then the user department can advise re-appropriation
of the quantity and value of the individual items within the contract
value.
61.10. The above is also applicable in the case of an item/service across
multiple region/ station/ location of a centralized contract.
*****

MMAO 715

62. VENDOR REGISTRATION
62.1. The supplier registration process enables suppliers who are not yet
registered with Air India, to submit their details for registering
themselves for participation in Air India tenders.
62.2. All new vendors would be required to register themselves through the
SRM portal https://erpportal.airindia.in. Vendors would be required to
click on the Supplier registration link to register themselves. Once the
vendors fill and submit the registration form, they would receive a
questionnaire on the email link provided during the registration process.
The vendors would be required to respond to the questionnaire.
62.3. Once the questionnaire is submitted by the vendor, the same would be
reviewed by MMD. Once the form is accepted by MMD, the vendor
would get user name and password through email ID provided during
registration. The vendor registration would be completed within 3
working days after submission of the questionnaire. Therefore, a clause
should be incorporated in the tender document, advising new vendors
to complete the vendor registration formalities at least 5 working days
prior to close of a public/ web public tender.
62.4. In the case of duplicate registration or the entered data is incomplete,
or the questionnaire not answered by the vendor, Vendor registration
request would be rejected within 5 working days of submitting the initial
request.
62.5. Finance is the custodian of the vendor data base. Request for any of the
following, should be sent to Finance for system update
62.5.1. Manual Vendor creation
62.5.2. Vendor extension
62.5.3. Update of GST details
62.5.4. Update of Bank details
62.5.5. Any other vendor master update
*****

MMAO 715

63. SUSPENSION OF BUSINESS
63.1. A vendor, who during the course of the contract/purchase order, backs
out/ deviates from the terms and conditions of the contract/purchase
order, but the deviation / seriousness of the default is not very grave,
then apart from the penalty as applicable in the contract/ purchase
order, GM-MM and above will be the competent authority to impose
additional penalty commensurate with the gravity of deviation/
seriousness of default, including suspension of business with the party
for the next tender for that item, i.e. the defaulting vendor can
participate for tenders, other than the one for which they have been
suspended. Similarly, if the vendor has been awarded a contract/
purchase order for other items, the same may continue including supply
of spares for equipment maintenance.
63.2. However, if the gravity of the deviation / seriousness of default
/persistent complaints are such that it warrants suspension of the
business with the vendor for the next tender, not only the item in which
deviation has occurred but for other items too, then GM-MM and above
will be the competent authority to suspend business with the defaulting
vendor for all items, for the next tender. Contract/s if any on such
vendors will be reviewed and if warranted cancellation of the
contract/PO can also be taken by the competent authority i.e. GM-MM
and above after duly examining the case merit and legal implications
etc.
63.3. The suspension of such business at regional level will also be notified to
the office of ED-MM who would have overriding authority in case of
appeals /representations.
63.4. It is the responsibility of the user department to share the feedback on
the performance of the supplier against the current contract for the
procurement of material and services, which will be taken into account
/ factored in while renewal of such contracts.
*****

MMAO 715

64. BANNING OF BUSINESS
64.1. During tendering/contract process, if it comes to light that a bidder
/vendor has misrepresented, used- submitted false/ fraudulent
documents, means or material, or is banned for business in other
government and PSUs, has committed serious breach of contract
/adopted means and business practices unethical, then ED-MM may
approve suspension of the business of such bidders/vendors for a period
of 6 months, pending investigation. Thereof, the process of banning
business with such vendors will be carried forward in keeping with the
corporate policy on banning of business and reference also made to
office of CVO. If after following the due procedure, it is established that
the business with the vendor is to be banned, the same would normally
be for a period of 3 years or as decided by competent authority (ED-
MM) on merit of case.
*****

MMAO 715

65. PURCHASING AT REGIONS
65.1. Normal purchase procedure to be followed by the Station Tender
Committee.
65.2. The Tender Committee will comprise officers at the appropriate level,
as identified at Annexure A - Column 2, from the Regional Materials
Management Department, Regional Finance Department and the
Regional User / Indenting Department. In case an officer at the
designated level is not available in a given region, the participation in
the tender committee from the concerned department would be
decided by the ED of the region. The Executive Director- Region will
exercise the same financial powers for purchase related activities as the
Executive Director – Materials Management.
*****

MMAO 715

66. DELEGATION OF AUTHORITY
66.1. A senior officer in a given department may exercise all or any of the
powers given to the officers’ subordinate to him / her in the same
department in line with the financial powers as given in Annexure A -
Column 2 to Column 4.
66.2. In such a case, no further approval for award would be required from
any higher authorities.
*****

MMAO 715

67. ANNEXURE
Annexure Description
A Financial Powers
B Format for details of Contract Awarded During the
month (Above ₹ 10 Lakh)
C Bank Guarantee Format for SD/PBG
D Items Reserved for SSI/ Handicraft Sector
E Loading Criteria
F Undertaking by TC Evaluation Members
G Letter of Authorization for Attending Bid Opening
H Bid Opening Attendance Sheet
I Return of Bids
J Letter of Authorization for Attending Pre-Bid
Conference
K Pre-Bid Meeting- Attendance Sheet
L Undertaking for Payment to be made against
Duplicate Challan / Invoice
M Negotiation Sheet
N Check List while creating the Shopping Cart
O Integrity Pact
P Proprietary Article Certificate
Q Undertaking from Bidders
R General Sequence of Clauses in Tender Terms
*****

MMAO 715

ANNEXURE A - FINANCIAL POWERS
Estimated Value of Tender Processing level/ Authority Level for Authority Level
Contract in INR or its Composition of TC Final Award/ for signing PO
equivalent in any
foreign currency
Column 1 Column 2 Column 3 Column 4 *
Up to ₹ 1 Lakhs Asst. Manager/ No TC Asst. Manager Asst. Manager
Up to ₹ 2 Lakhs Asst. Manager/ No TC Dy Manager Asst Manager

Up to Rs.5 Lakhs Dy. Manager/ No TC Manager Dy Manager
Up to ₹ 10 Lakhs Manager/ No TC Sr Manager Manager
Up to ₹ 35 Lakhs MMD: Manager Sr. Manager Manager

Finance : Manager
User Deptt. Equiv. Level
Up to ₹ 50 Lakhs MMD : Sr. Manager AGM Sr. Manager

Finance : Sr. Manager
Up to ₹ 1 Crores MMD : AGM Sr. AGM AGM

Finance : AGM
Up to ₹ 3 Crores MMD : Sr. AGM DGM Sr. AGM

Finance : Sr. AGM
User Deptt. DGM/ADGM
Up to ₹ 6 Crores MMD: DGM General Manager DGM

Finance: DGM
Up to ₹ 12 Crores MMD: GM Executive Director GM
Finance: GM
Up to ₹ 24 Crores MMD:ED Director - Finance / Executive
Finance:ED Functional Director Director
Head of User Deptt.
Above ₹ 24 Crores MMD : ED Concurrence by Executive
Finance : ED - Director - Finance Director
Head of User Deptt. Approval by Chairman
& Managing Director
* The level defined in Column 4 are before Tax.
*****

MMAO 715

ANNEXURE B - FORMAT FOR DETAILS OF CONTRACT AWARDED DURING THE
MONTH (ABOVE ₹ 10 LAKH)
*****

MMAO 715

ANNEXURE C - BANK GUARANTEE FORMAT FOR SD/PBG
To
Executive Director - Materials Management
Air India Ltd
--------------------------------
--------------------------------
WHEREAS ………………………………………………………………………...
(name and address of the supplier) (hereinafter called “the supplier”) has undertaken,
in pursuance of contract no…………………………… dated …………….. to supply (description
of goods and services) (herein after called “the contract”).
AND WHEREAS it has been stipulated by you in the said contract that the supplier shall
furnish you with a bank guarantee by a commercial bank recognized by you for the
sum specified therein as security for compliance with its obligations in accordance
with the contract;
AND WHEREAS we have agreed to give the supplier such a bank guarantee;
NOW THEREFORE, we …………………………………. Bank, hereby affirm that we are

guarantors and responsible to you, on behalf of the supplier, up to a total of
…………………………………………….………… ( amount of the guarantee in words and figures),
and we undertake to pay you, upon your first written demand declaring the supplier
to be in default under the contract and without cavil or argument, any sum or sums
within the limits of (amount of guarantee) as aforesaid, without your needing to prove
or to show grounds or reasons for your demand or the sum specified therein.
We hereby waive the necessity of your demanding the said debt from the supplier
before presenting us with the demand.
We further agree that no change or addition to or other modification of the terms

of the contract to be performed thereunder or of any of the contract documents
which may be made between you and the supplier shall in any way release us from
any liability under this guarantee and we hereby waive notice of any such change,
addition or modification.
This guarantee shall be valid until the ………… day of ……… 20….…..

MMAO 715

(Signature of the authorized officer of the Bank)
………………………………………………….
Name and designation of the officer
………………………………………………….
………………………………………………….
Seal, name & address of the Bank and address of the Branch
*****

MMAO 715

ANNEXURE D - ITEMS RESERVED FOR SSI / HANDICRAFTS SECTOR
S. No. ITEM DESCRIPTION

1 AAC/ACSR Conductors upto 19 stand
2 Agricultural Implements -
3 Hand Operated Tools and Implements
4 Animal Driven Implements
5 Air/Room Coolers
6 Aluminium Builders and Hardware
7 Ambulance Stretcher
8 Ammeters/Ohm Meters/Volt meter (Electro magnetic upto
Class I accuracy
9 Ankles Web Khaki
10 Augur (Carpenters)
11 Automobile Head Lights Assembly
12 Badges Cloth, embroidered and metals
13 Bags of all types i.e. made of leather, cotton canvas & jute
etc. including kit bags, mail bags, sleeping bags & water-
proof bags.
14 Bandage Cloth
15 Basket cane, (Procurement can also be made from State
Forest Corporation and State handicraft Corporation).
16 Bath Tubs
17 Barbed Wire
18 Battery Charger
19 Battery Eliminators
20 Bean Scales (upto 1.5 tons)
21 Belt Leather and Straps
22 Bench Vices
23 Bituminous Paints
24 Blotting Paper
25 Bolts and Nuts
26 Bolts Sliding

MMAO 715

27 Bone Meal
28 Boot Polish
29 Boots and shoes of all types excluding Canvas shoes
30 Bowls
31 Boxes Leather
32 Boxes made of Metal Braces
ITEMS RESERVED FOR SSI / HANDICRAFTS SECTOR
33 Braces
34 Brackets other than those in Railways
35 Brass Wire
36 Brief cases (other than moulded luggage)
37 Brooms
38 Brushes of all types
39 Buckets of all types
40 Buttons of all types
41 Candle Wax Carriage
42 Cane Valves/stock valves (for water fittings only)
43 Cans metallic (for milk & measuring)
44 Canvas Products -
45 Water Proof Delivery Bags to Specn. No. IS-1422/7D
46 Bonnet Covers & Radiators Muff. To spec. Drg.
Lv7/NSN/IA/130295
47 Caps Cotton & Woolen
48 Caps Waterproof
49 Castor Oil
50 Ceiling Roses upto 15 amps
51 Centrifugal steel Plate Blowers
52 Centrifugal Pumps-Section and Delivery 150mm. x 150mm.
53 Chaff Cutter Blade
54 Chains lashing
55 Chappals and sandals
56 Chamois Leather

MMAO 715

57 Chokes for light fitting
58 Chorme Tanned leather (Semi-finished Buffalo & Cow)
59 Circlips
60 Claw Bars and Wires
61 Cleaning Powder
62 Clinical Thermometers
63 Cloth Covers
64 Cloth Jaconet
65 Cloth Sponge
66 Coir fibre and Coir yam
67 Coir mattress, cushions and matting
68 Coir Rope hawser laid
69 Community Radio Receivers
70 Conduit pipes
71 Copper nail
72 Copper Napthenate
73 Copper sulphate
74 Cord Twine Maker
75 Cordate Others
76 Corrugated Paper Board & Boxes
77 Cotton Absorbent
78 Cotton Belts
79 Cotton Carriers
80 Cotton Cases
81 Cotton Cord Twine
82 Cotton Hosiery
83 Cotton packs
84 Cotton Pouches
85 Cotton Ropes
86 Cotton Singlets

MMAO 715

87 Cotton Sling
88 Cotton Straps
89 Cotton tapes and laces
90 Cotton Wool (Non absorbent)
91 Crates Wooden & Plastic
92 (a) Crucibles upto No. 200
93 Crucibles Graphite upto No. 500
94 Other Crucibles upto 30 kgs.
95 Cumbles & blankets
96 Curtains mosquito
97 Cutters
98 Dibutyl phthaiate
99 Diesel engines upto 15 H.P.
100 Dimethyl Phthaiate
101 Disinfectant Fluid
102 Distribution Board upto 15 amps
103 Domestic Electric appliances as per BIS Specifications :-
- Toaster Electric, Elect. Iron, Hot-Plates, Elect. Mixer
Grinders,
- Room heaters & convectors and ovens.
104 Domestic (House Wiring) P.V.C. Cables and Wires
(Aluminum) Conforming to the prescribed BIS Specifications
and upto 10.00 mm. sq. normial cross section.
105 Drawing & Mathematical Instruments
106 Drums & Barrels
107 Dust Bins
108 Dust Shield leather
109 Duster Cotton all types except the items required in Khadi
110 Dyes
111 Azo Dyes (Direct & Acid)
112 Basic Dyes

MMAO 715

113 Electric Call bells/buzzers/door bells
114 Electric Soldering Iron
115 Electric Transmission Line Hardware like steel cross bars,
cross arms clamps arching arm, brackets etc.
116 Electronic door bell.
117 Emergency Light (Rechargeable type)
118 Enamel Wares & Enamel Utensils
119 Enamel camoulflate Bamboo support
120 Exhaust Muffler
121 Expanded Metal
122 Eyelets
123 Films Polythene-including wide film
124 Films spool & cans
125 Fire Extinguishers (well type)
126 Foot powder
127 French polish
128 Funnels
129 Fuse Cut outs
130 Fuse Unit
131 Garments (excluding supply from Indian Ordnance Factories)
132 Gas mantels
133 Gauze cloth
134 Gauze surgical all types
135 Ghamellas (Tasllas)
136 Glass Ampules
137 Glass & Pressed Wares
138 Glue
139 Grease Nipples & Grease guns
140 Gun Cases
141 Gun Metal Bushes
142 Gum tape
143 Hand drawn carts of all types

MMAO 715

144 Hand gloves of all types
145 Hand Lamps Railways
146 Hand numbering machine
147 Hand pounded Rice (polished and unpolished)
148 Hand presses
149 Hand Pump
150 Hand Tools
151 Handles wooden and bamboo (Procurement can also be
made from
State Forest Corpn. And State Handicraft Corporation).
152 Hamess Leather
153 Hasps & Staples
154 Haver Sacks
155 Helmet Non-Metallic
156 Hide and country leather of all types
157 Hinges
158 Hob nails
159 Hold all
160 Honey'
161 Horse and Mule Shoes
162 Hydraulic Jacks below 30 ton capacity
163 Insecticides Dust and Sprayers (Manual only)
164 Invalid wheeled chairs
165 Invertor domestic type upto 5 KVA
166 Iron (dhobi)
167 Key board wooden
168 Kit boxes
169 Kudali
170 Lace leather
171 Lamp holders
172 Lamp signal

MMAO 715

173 Lanterns Posts & bodies
174 Lanyard
175 Lantex foam sponge
176 Lanthies
177 Letter Boxes
178 Lighting Arresters - upto 22 kv
179 Link Clip
180 Linseed Oil
181 Lint Plain
182 Lockers
183 Lubricants
184 L.T. Porcelain KITKAT & Fuse Grips
185 Machine Screws
186 Magnesium Sulphate
187 Mallet Wooden
188 Manhole covers
189 Measuring Tapes and Sticks
190 Metal clad switches (upto 30 Amps)
191 Metal Polish
192 Metallic containers and drums other than N.E.C. (not
elsewhere classified)
193 Metric weight
194 Microscope for normal medical use
195 Miniature bulbs (for torches only)
196 M.S. Tie Bars
197 Nail Cutters
198 Naphthalene Balls
199 Newar
200 Nickel Sulphate
201 Nylon Stocking
202 Nylon Tapes and Laces

MMAO 715

203 Oil Bound Distemper
204 Oil Stoves (Wick Stoves only)
205 Pad locks of all types
206 Paint remover
207 Palma Rosa oil
208 Palmgur
209 Pans Lavatory Flush
210 Paper conversion products, paper bags, envelops, Ice-cream
cup, paper cup and saucers & paper plates
211 Paper Tapes (Gummed)
212 Papads
213 Pickles & Chutney
214 Piles fabric
215 Pillows
216 Plaster of paris
217 Plastic Blow Moulded Containers upto 20 litre excluding Poly
Ethylene Terpthalate (PET) Containers
218 Plastic cane
219 Playing Cards
220 Plugs & Sockets electric upto 15 Amp.
221 Polythene Bags
222 Polythene pipes
223 Post picket (wooden)
224 Postal Lead Seals
225 Potassium Nitrate
226 Pouches
227 Pressure Die Casting upto 0.75 kg.
228 Privy pans
229 Pulley wire
230 PVC footwear
231 PVC pipes upto 110 mm.

MMAO 715

232 PVC Insulated Aluminium Cables (upto 120 Sq. mm) (ISS:694)
233 Quilts, Razais
234 Rags
235 Railways carriage light fittings
236 Rakes Ballast
237 Razors
238 RCC Pipes upto 1200 mm. Dia
239 RCC Poles Prestressed
240 Rivets of all types
241 Rolling Shutters
242 Roof light fittings
243 Rubber Balloons
244 Rubber Cord
245 Rubber Hoses (Unbranded)
246 Rubber Tubing (Excluding braided rubbing)
247 Rubberised Garments Cap and caps etc.
248 Rust/Scale Removing Composition
249 Safe meat & milk
250 Safety matches
251 Safety Pins (and other similar products like paper pins, staple
pins etc.)
252 Sanitary Plumbing Fitting
253 Sanitary Towels
254 Scientific Laboratory glassware (Barring sophisticated items)
255 Scissors cutting (ordinary)
256 Screws of all types including High Tensile
257 Sheep skin all types
258 Shellac
259 Shoes laces
260 Shovels
261 Sign Boards painted
262 Silk ribbon

MMAO 715

263 Silk webbing
264 Ski boots & shoes
265 Sluice Valves
266 Snapfastner (Excluding 4 pcs. Ones)
267 Soap Carbolic
268 Soap Curd
269 Soap Liquid
270 Soap Soft
271 Soap washing or laundry soap
272 Soap Yellow
273 Socket/pipes
274 Sodium Nitrate
275 Sodium silicate
276 Sole leather
277 Spectacle frames
278 Spiked boots
279 Sports shoes made out of leather (for all sports games)
280 Squirrel Cage Induction Motors upto and including 100 KW
440 volts 3 phase
281 Stapling machine
282 Steel Almirah
283 Steel beds stead
284 Steel chair
285 Steel desks
286 Steel racks/shelf
287 Steel stools
288 Steel trunks
289 Steel wool
290 Steel & aluminium windows and ventilators
291 Stockinet
292 Stone and stone quarry rollers

MMAO 715

293 Stoneware jars
294 Standard wire
295 Street light fittings
296 Student Microscope
297 Studs (excluding high tensile)
298 Surgical Gloves (Except Plastic)
299 Table knives (Excluding Cutlery)
300 Tack Metallic
301 Taps
302 Tarpaulins
303 Teak Fabricated round blocks
304 Tent poles
305 Tentage Civil/Military & Salitah jute for Tentage
306 Textile manufactures other than N.E.C. (not elsewhere
classified)
307 Tiles
308 Tin Boxes for postage stamp
309 Tin can unprinted upto 4 gallons capacity (other than can
(O.T.S.)
310 Tin Mess
311 Tip Boots
312 Toggle Switches
313 Toilets Rolls
314 Transformer type welding sets conforming to IS:1291/75
(upto 600 amps)
315 Transistor Radio upto 3 band
316 Transistor Insulation – Testers
317 Trays
318 Trays for postal use
319 Trolley
320 Trollies - drinking water

MMAO 715

321 Tubular Poles
322 Tyres & Tubes (Cycles)
323 Umbrellas
324 Utensils all types
325 Valves Metallic
326 Varnish Black Japan
327 Voltage stabilisers including C.V.T's
328 Washers all types
329 Water Proof Covers
330 Water Proof paper
331 Water tanks upto 15,000 liters capacity
332 Wax sealing
333 Waxed paper
334 Weighing Scale
335 Welded Wiremash
336 Wheel barrows
337 Whistle
338 Wicks cotton
339 Wing Shield Wipers (Arms & Blades only)
340 Wire brushes and Fibre Brushes
341 Wire Fencing & Fittings
342 Wire nails and Horse shoe nails
343 Wire nettings of gauze thicker than 100 mesh size
344 Wood wool
345 Wooden ammunition boxes
346 Wooden Boards
347 Wooden Box for Stamps
348 Wooden Boxed and cases N.E.C. (Not elsewhere classified)
349 Wooden Chairs
350 Wooden Flush Door Shutters

MMAO 715

351 Wooden packing cases all sizes
352 Wooden pins
353 Wooden plugs
354 Wooden shelves
355 Wooden veneers
356 Woolen hosiery
357 Zinc sulphate
358 Zip Fasteners
*****

MMAO 715

ANNEXURE E - LOADING CRITERIA
1. Advance Payment
2. Warranty
3. Delivery Period
1. Advance Payment (Prior to delivery): @ 10 % per annum calculated on pro-

rata basis.
Scenario 1
Basic Rate ₹ 1,00,000/-

GST 5% ₹ 5,000/-
Delivery Period 4 Weeks
Payment due after 60 days of delivery
Loading for advance payment will be 3 Months i.e. 2.5% on the Landed cost i.e. ₹
2,625/- on ₹ 1,05, 000/-
Therefore the total landed cost would be calculated as follows
Basic Rate ₹ 1,00,000/-

GST 5% ₹ 5,000/-
Loading ₹ 2,625/-
TOTAL ₹ 1,07,625/-
Scenario 2
In case the payment is on delivery the loading will be

Basic Rate ₹ 99,000/-
Packing ₹ 1,000/-
GST 5% ₹ 5,000/-
Payment due after 60 days of delivery
Loading for payment against delivery will be 2 Months i.e. 1.6% on the Landed Cost
i.e. ₹ 1,680/- on ₹ 1,05, 000/-
Basic Rate ₹ 1,00,000/-

GST 5% 5,000/-
Loading ₹ 1,680/-
TOTAL ₹ 1,06,680/-
2. Warranty: @ 10% per annum calculated on pro-rata basis
Basic Rate ₹ 1,00,000/-

GST 5% ₹ 5,000/-
Warranty period 2 years as per tender

MMAO 715

Warranty quoted 1 year
Loading for warranty period will be 12 Months i.e. 10% on the Landed Cost i.e. ₹
10,500/- on ₹ 1,05, 000/-
Basic Rate ₹ 1,00,000/-

GST 5% ₹ 5,000
Loading ₹ 10,500/-
TOTAL ₹ 1,15,500/-
3. Delivery period: @ 0.5% per week calculated on pro-rata basis
Basic Rate ₹ 1,00,000/-

GST 5% ₹ 5,000/-
Delivery Period as per tender 4 Weeks
Delivery Period quoted – 6 Weeks
Loading for Delivery period will be 2 Weeks i.e. 1% on the Landed Cost i.e. ₹ 1050/-
on ₹ 1,05, 000/-
Basic Rate ₹ 1,00,000/-

GST 5% ₹ 5,000
Loading ₹ 1050/-
TOTAL ₹ 1,06,050/-
*****

MMAO 715

ANNEXURE F - UNDERTAKING BY TC EVALUATION MEMBERS
Date : ______________
Tender no. ________________________
Description :
We, the following committee members for the subject tender, confirm that none of
us has any personal interest in the companies/ agencies participating in the subject
tender process.
Signature ____________ _______________ _____________
Name _____________ _______________ _____________
Designation _____________ _______________ _____________
*****

MMAO 715

ANNEXURE G - LETTER OF AUTHORIZATION FOR ATTENDING BID OPENING
To
Materials Management Department,

Air India Ltd,
………………
……………..
Subject : Authorisation for attending bid opening
Tender No. ____________________ Closing Date: _____________________
Opening Date _____________ Opening Time _____________________
The following person(s) are hereby authorised to attend the bid opening for the
tender mentioned above on our behalf.
Sr. No Name E-Mail ID Contact No. Signature
I.
II.
Authorised Signatory
Note : 1. Permission for entry to the hall where bids are opened, may be refused in
case authorization as prescribed above is not received.
2. The authorized representatives, in their own interest, must reach the venue of bid
opening well in time.
3. The authorized representatives must carry a valid photo identity.
*****

MMAO 715

ANNEXURE H - BID OPENING ATTENDANCE SHEET
DATE: ______________
TENDER NO. ___________________________ SECTION: _________________
Subject : ___________________________________________________
The following vendors were present for tender opening.
Sr.No. Company Name Name of Rep Tel No. Email Sign of Rep
Name & Signature of Air India Representatives
(Name and signature) (Name and signature) (Name and signature)
*****

MMAO 715

ANNEXURE I - RETURN OF BIDS
Part A Intimation to bidders
To Date: ---------
______________________ Reference No. __________________
______________________
______________________
Sub: Return of price bids
Sir/ Madam
Please refer to your price bid submitted against our tender no. ___________ dated
______________ .
In connection with the above tender, this is to advise that your price bid was not
opened as your technical bid did not qualify in terms of compliance with the tender
requirements. You are, therefore, requested to collect your price bid from the office
of the undersigned within the next 30 days. Your representative must carry an
authorization letter in order to enable us to hand over the same.
In case you do not collect the price bid within the stipulated 30 days, Air India reserves
the right to destroy the bid without any further intimation to you, and no
communication whatsoever in this regard would be entertained subsequently.
We thank you for having participated in the tender.
Name of the Materials Management official
Designation
Contact No
E-Mail ID

MMAO 715

PART B: ACKNOWLEDGEMENT OF RETURN OF PRICE BID
To Date: ___________
_______________________
______________________
______________________
Tender No………………………… Tender Date ……………………………. Due Date

……………………………………
Vendor Name ____________________________
We, hereby, acknowledge the receipt of our price bid against the above mentioned
tender number. The same is in sealed condition and Air India has no obligation with
regard to this tender.
(Signature of Bidder Representative)
Encl: Price Bid
*****

MMAO 715

ANNEXURE J - LETTER OF AUTHORIZATION FOR ATTENDING PRE-BID
CONFERENCE
( To reach MMD on or before date of Pre-bid conference )
To

Air India Ltd,
………………
……………..
Subject : Authorisation for attending Pre-bid Conference
Tender No. ___________ Due Date: ______________
Pre-Bid Conference Date __________
The following person(s) are hereby authorised to attend the pre-bid conference for the
tender mentioned above on our behalf.
Sr. No Name E-Mail ID Contact No. Signature
I.
II.
Note : 1. Permission for entry to the hall where bids are opened, may be refused in
case authorization as prescribed above is not received.
2. The authorized representatives, in their own interest, must reach the venue of bid
opening well in time.
3. The authorized representatives must carry a valid photo identity.
*****

MMAO 715

ANNEXURE K - PRE BID MEETING – ATTENDANCE SHEET
DATE : _____________
TENDER NO. _________________ SECTION ____________________
Subject : ___________________________________________________
The following vendors were present for Pre-bid meeting.
Sr.No. Company Name Name of Rep Tel No. Email Sign of Rep
Name & Signature of Air India representatives
(Name and signature) (Name and signature) (Name and signature)
*****

MMAO 715

ANNEXURE L - UNDERTAKING FOR PAYMENT TO BE MADE AGAINST
DUPLICATE CHALLAN/ INVOICE
(On Company Letter head)
To

Air India Ltd,
………………
……………..
Subject : Undertaking for payment against duplicate challan/ invoice
Purchase Order No. ___________ Purchase Order Date: ______________
Invoice No. _________________ Invoice Date:________________________
Challan No. ___________________ Challan Date: _____________________
This is to state that this is a duplicate invoice / challan and no payment has been
received by us against the above mentioned PO. However, if it is later found that
payment has been received, the same will be refunded to Air India.
(with Stamp)
*****

MMAO 715

ANNEXURE M - NEGOTIATION SHEET
RFx No. ____________________ RFx Date: _______________________
Description:
_______________________________________________________________
_______________________________________________________________
A price negotiation meeting was held in the office of _______________________ On

____________________ at ________________am/pm. The following participants
were present:
Air India Vendor

1.
2.
3.
4.
5.
Following points were discussed and agreed upon:
Purchase Representative Finance Representative User

Representative
Vendor (Authorised Signatory) ____________________________
*****

MMAO 715

ANNEXURE N - CHECK LIST WHILE CREATING THE SHOPPING CART
All the shopping carts must contain complete requirement in its correctness. The
users should check and confirm if following information, wherever applicable, has
been provided while creating the shopping cart.
1. Sufficient budget/ AR / Asset Codes
2. Correct Unit of Measure
3. Estimated cost
4. Model no/ Make
5. Complete specifications
6. Drawings
7. Scope of Work
8. Service Level agreement requirements
9. Sample requirements
10. Warranty requirements
11. Delivery Schedule
12. Pre-Qualification Criteria
13. Technical Evaluation criteria
14. Pre-delivery Inspection requirements
15. Pre-Bid conference Requirement
16. Whether required on Proprietary or brand approved basis
MMD reserves the right to reject the shopping cart if the information is either
incomplete or not provided or is not relevant.
*****

MMAO 715

ANNEXURE O - INTEGRITY PACT
Between
Air India Ltd. (AIL) hereinafter referred to as “The Principal”,
and
hereinafter referred to as “The Bidder/ Contractor”
PREAMBLE
The Principal intends to award, under laid down organizational procedures, contract(s)
for -------------. The Principal values full compliance with all relevant laws of the land,
rules, regulations, economic use of resources and of fairness/transparency in its
relations with its Bidder(s) and/or Contractor(s).
In order to achieve these goals, the Principal will appoint an Independent External
Monitor (IEM), who will monitor the tender process and the execution of the contract
for compliance with the principles mentioned above.
Section 1 – Commitments of the Principal
1. The Principal commits itself to take all measures necessary to prevent corruption
and to observe the following principles:-
a. No employee of the Principal, personally or through family members, will in
connection with the tender for, or the execution of a contract, demand, take
a promise for or accept, for self or third person, any material or immaterial
benefit which the person is not legally entitled to. The word ‘take’ shall also
include the past and future.
b. The Principal will, during the tender process treat all Bidder(s) with equity and
reason. The Principal will in particular, before and during the tender process,
provide to all Bidder(s) the same information and will not provide to any
Bidder(s) confidential/additional information through which the Bidder(s)
could obtain an advantage in relation to the tender process or the contract
execution.

MMAO 715

c. The Principal will exclude from the process all known prejudiced persons and
persons who would be known to have a connection or nexus with the
prospective bidder.
2. If the Principal obtains information on the conduct of any of its employees which is
a criminal offence under the IPC/PC Act or the conduct rules of the Principal, or if
there be a substantive suspicion in this regard, the Principal will inform the Chief
Vigilance Officer and in addition can initiate disciplinary actions.
Section 2 – Commitments of the Bidder(s)/ contractor(s)
1. The Bidder(s)/ Contractor(s) commit themselves to take all measures necessary to

prevent corruption in their dealings with AIR INDIA LTD.. He commits himself to
observe the following principles during his participation in the tender process and
during the contract execution.
a. The Bidder(s)/ Contractor(s) will not, directly or through any other person or
firm, offer, promise or give to any of the Principal’s employees involved in the
tender process or the execution of the contract or to any third person any
material or other benefit which he/she is not legally entitled to, in order to obtain
in exchange any advantage of any kind whatsoever during the tender process or
during the execution of the contract.
b. The Bidder(s)/Contractor(s) will not enter with other Bidders into any
undisclosed agreement or understanding, whether formal or informal. This
applies in particular to prices, specifications, certifications, subsidiary contracts,
submission or non-submission of bids or any other actions to restrict
competitiveness or to introduce cartelisation in the bidding process.
c. The Bidder(s)/Contractor(s) will not commit any offence under the relevant
IPC/PC Act; further the Bidder(s)/ Contractor(s) will not use improperly, for
purposes of competition or personal gain, or pass on to others, any information
or document provided by the Principal as part of the business relationship,
regarding plans, technical proposals and business details, including information
contained or transmitted electronically.
d. The Bidder(s)/Contractors(s) of foreign origin shall disclose the name and
address of the Agents/representatives in India, if any. Similarly the
Bidder(s)/Contractors(s) of Indian Nationality shall furnish the name and address
of the foreign principals, if any. Further details as mentioned in the “Guidelines
on Indian Agents of Foreign Suppliers” shall be disclosed by the
Bidder(s)/Contractor(s).Further, as mentioned in the Guidelines all the payments
made to the Indian agent/representative have to be in Indian Rupees only. Copy
of the “Guidelines on Indian Agents of Foreign Suppliers” is placed at (Page nos.
6-7)
e. The Bidder(s)/Contractor(s) will, when presenting his bid, disclose any and all
payments he has made, is committed to or intends to make to agents, brokers
or any other intermediaries in connection with the award of the contract.
f. This integrity pact shall override the confidentiality clause, if any, in the offer
submitted by the Contractor/Bidder and in the agreement entered into by the
Principal with the Contractor/Bidder.
2. The Bidder(s)/Contractor(s) will not instigate third persons to commit offences or
acts outlined above or be an accessory to such offences.
Section 3 - Disqualification from tender process and exclusion from future

contracts

MMAO 715

If the Bidder(s)/Contractor(s), before award or during execution has committed a
transgression through a violation of Section 2, above or in any other form such as
to put his reliability or credibility in question, the Principal is entitled to disqualify
the Bidder(s)/Contractor(s) from the tender process or take action as per the
procedure mentioned in the “Guidelines on Banning of business dealings”. Copy of
the “Guidelines on Banning of business dealings” is placed at Page nos. 8-16.
Section 4 – Compensation for Damages
1. If the Principal has disqualified the Bidder(s) from the tender process prior to the
award according to Section 3, the Principal is entitled to demand and recover the
damages equivalent to Earnest Money Deposit/Bid Security and other actual
damages due to the consequential delay.
2. If the Principal has terminated the contract according to Section 3, or if the Principal
is entitled to terminate the contract according to Section 3, the Principal shall be
entitled to demand and recover from the Contractor liquidated damages of the
Contract value or the amount equivalent to Performance Bank Guarantee.
3. The Contractor/Bidder shall not be entitled to claim from the Principal any amounts
either as damages or otherwise, on account of termination.
Section 5 – Previous transgression
1. The Bidder declares that no previous transgressions occurred in the last 3 years with
any other Company in any country conforming to the corruption approach or with
any other Public Sector Enterprise in India that could justify his exclusion from the
tender process.
2. If the Bidder makes incorrect statement on this subject, he can be disqualified from
the tender process or action can be taken as per the procedure mentioned in
“Guidelines on Banning of business dealings”.
Section 6 – Equal treatment of all Bidders/Contractors/Subcontractors
1. The Bidder(s)/ Contractor(s) undertake(s) to demand from all subcontractors a

commitment in conformity with this Integrity Pact, and to submit it to the Principal
before contract signing.
2. The Principal will enter into agreements with identical conditions as this one with all
Bidders, Contractors and Subcontractors.
3. The Principal will disqualify from the tender process all bidders who do not sign this
Pact or violate its provisions.
Section 7 –Criminal charges against violating Bidder(s)/Contractor(s)/

Subcontractor(s)
If the Principal obtains knowledge of conduct of a Bidder, Contractor or

Subcontractor, or of an employee or a representative or an associate of a Bidder,

MMAO 715

Contractor or Subcontractor which constitutes corruption, or if the Principal has
substantive suspicion in this regard, the Principal will inform the same to the Chief
Vigilance Officer.
Section 8 – Independent External Monitor/Monitors
1. The Principal appoints competent and credible Independent External Monitor for
this Pact. The task of the Monitor is to review independently and objectively,
whether and to what extent the parties comply with the obligations under this
agreement.
2. The Monitor is not subject to instructions by the representatives of the parties
and performs his functions neutrally and independently. He shall report to the
Chairman, AIR INDIA LTD..
3. The Bidder(s)/Contractor(s) accepts that the Monitor has the right to access
without restriction to all Project documentation of the Principal including that
provided by the Contractor. The Contractor will also grant the Monitor, upon his
request and demonstration of a valid interest, unrestricted and unconditional
access to his project documentation. The same is applicable to Subcontractors.
The Monitor is under contractual obligation to treat the information and
documents of the Bidder(s)/ Contractor(s)/ Subcontractor(s) with confidentiality.
4. The Principal will provide to the Monitor sufficient information about all meetings
among the parties related to the Project provided such meetings could have an
impact on the contractual relations between the Principal and the Contractor. The
parties offer to the Monitor the option to participate in such meetings.
5. As soon as the Monitor notices, or believes to notice, a violation of this
agreement, he will so inform the Management of the Principal and request the
Management to discontinue or take corrective action, or to take other relevant
action. The monitor can in this regard submit non-binding recommendations.
Beyond this, the Monitor has no right to demand from the parties that they act
in a specific manner, refrain from action or tolerate action.
6. The Monitor will submit a written report to the Chairman, AIR INDIA LTD. within
8 to 10 weeks from the date of reference or intimation to him by the Principal
and, should the occasion arise, submit proposals for correcting problematic
situations.
7. Monitor shall be entitled to compensation on the same terms as being extended
to / provided to Independent Directors on the AIR INDIA LTD. Board.
8. If the Monitor has reported to the Chairman AIR INDIA LTD., a substantiated
suspicion of an offence under relevant IPC/ PC Act, and the Chairman AIR INDIA
LTD. has not, within the reasonable time taken visible action to proceed against
such offence or reported it to the Chief Vigilance Officer, the Monitor may also
transmit this information directly to the Central Vigilance Commissioner.
9. The word ‘Monitor’ would include both singular and plural.
Section 9 – Pact Duration

MMAO 715

This Pact begins when both parties have legally signed it. It expires for the
Contractor 3 years after the last payment under the contract, and for all other
Bidders 12 months after the contract has been awarded.
If any claim is made/lodged during this time, the same shall be binding and
continue to be valid despite the lapse of this pact as specified above, unless it is
discharged / determined by Board of AIR INDIA LTD..
Section 10 – Other provisions
1. This agreement is subject to Indian Law. Place of performance and jurisdiction is the
Registered Office of the Principal, i.e. Mumbai.
2. Changes and supplements as well as termination notices need to be made in
writing. Side agreements have not been made.
3. If the Contractor is a partnership or a consortium, this agreement must be signed
by all partners or consortium members and in the case of a Company by an
authorised representative.
4. Should one or several provisions of this agreement turn out to be invalid, the
remainder of this agreement remains valid. In this case, the parties will strive to
come to an agreement to their original intentions.
(For & On behalf of the Principal) (For & On behalf of
Bidder/ Contractor)
(Office Seal) (Office Seal)
Place --------------
Date --------------
Witness 1:
(Name & Address) _____________________________
_____________________________

MMAO 715

_____________________________
_____________________________
Witness 2:
(Name & Address) _____________________________

_____________________________
_____________________________
_____________________________

MMAO 715

GUIDELINES FOR INDIAN AGENTS OF FOREIGN SUPPLIERS
1.0 There shall be compulsory registration of agents for all Global (Open) Tender and
Limited Tender. An agent who is not registered with AIR INDIA LTD.
Departments/Stations shall apply for registration in the prescribed Application –
Form.
1.1 Registered agents will file an authenticated Photostat copy duly attested by a
Notary Public/Original certificate of the principal confirming the agency
agreement and giving the status being enjoyed by the agent and the
commission/remuneration/salary/ retainer ship being paid by the principal to the
agent before the placement of order by AIR INDIA LTD. Departments/Stations.
1.2 Wherever the Indian representatives have communicated on behalf of their

principals and the foreign parties have stated that they are not paying any
commission to the Indian agents, and the Indian representative is working on
the basis of salary or as retainer, a written declaration to this effect should be
submitted by the party (i.e. Principal) before finalizing the order
2.0 DISCLOSURE OF PARTICULARS OF AGENTS/ REPRESENTATIVES IN

INDIA. IF ANY.
2.1 Tenderers of Foreign nationality shall furnish the following details in their offer:
2.1.1 The name and address of the agents/representatives in India, if any and the
extent of authorization and authority given to commit the Principals. In case the
agent/representative be a foreign Company, it shall be confirmed whether it is
real substantial Company and details of the same shall be furnished.
2.1.2 The amount of commission/remuneration included in the quoted price(s) for

such agents/representatives in India.
2.1.3 Confirmation of the Tenderer that the commission/ remuneration if any, payable
to his agents/representatives in India, may be paid by AIR INDIA LTD. in Indian
Rupees only.
2.2 Tenderers of Indian Nationality shall furnish the following details in their offers:
2.2.1 The name and address of the foreign principals indicating their nationality as
well as their status, i.e, whether manufacturer or agents of manufacturer holding
the Letter of Authority of the Principal specifically authorizing the agent to make

MMAO 715

an offer in India in response to tender either directly or through the
agents/representatives.
2.2.2 The amount of commission/remuneration included in the price (s) quoted by the
Tenderer for himself.
2.2.3 Confirmation of the foreign principals of the Tenderer that the

commission/remuneration, if any, reserved for the Tenderer in the quoted price
(s), may be paid by AIR INDIA LTD. in India in equivalent Indian Rupees on
satisfactory completion of the Project or supplies of Stores and Spares in case of
operation items .
2.3 In either case, in the event of contract materializing, the terms of payment will
provide for payment of the commission /remuneration, if any payable to the
agents/representatives in India in Indian Rupees on expiry of 90 days after the
discharge of the obligations under the contract.
2.4 Failure to furnish correct and detailed information as called for in paragraph-2.0
above will render the concerned tender liable to rejection or in the event of a
contract materializing, the same liable to termination by AIR INDIA LTD.. Besides
this there would be a penalty of banning business dealings with AIR INDIA LTD.
or damage or payment of a named sum.

MMAO 715

CONTENTS
S.No. Description Page(s)
1. Introduction 9
2. Scope 9
3. Definitions 10
4. Initiation of Banning / Suspension 11
5. Suspension of Business Dealings 11-12
6. Ground on which Banning of Business Dealing 12-13

can be initiated
7. Banning of Business Dealings 13-14
8. Removal from List of Approved Agencies- 14-15

Suppliers/Contractors etc.
9. Procedure for issuing Show-cause Notice 15
10. Appeal against the Decision of the Competent 15

Authority
11. Review of the Decision by the Competent 15

Authority
12. Circulation of the names of Agencies with 16

whom Business Dealings have been banned

MMAO 715

Introduction
1.1 Air India Ltd., being a Public Sector Enterprise and ‘State’, within the
meaning of Article 12 of the Constitution of India, has to ensure
preservation of rights enshrined in Chapter III of the Constitution. AIR
INDIA LTD. has also to safeguard its commercial interests. AIR INDIA LTD.
deals with Agencies, who have a very high degree of integrity,
commitments and sincerity towards the work undertaken. It is not in the
interest of AIR INDIA LTD. to deal with Agencies who commit deception,
fraud or exercise of coercion or undue influence or other misconduct in
the execution of contracts awarded / orders issued to them. In order to
ensure compliance with the constitutional mandate, it is incumbent on AIR
INDIA LTD. to observe principles of natural justice before banning the
business dealings with any Agency.
1.2 Since banning of business dealings involves civil consequences for an

Agency concerned, it is incumbent that adequate opportunity of hearing
is provided and the explanation, if tendered, is considered before passing
any order in this regard keeping in view the facts and circumstances of
the case.
2. Scope
2.1 The General Conditions of Contract (GCC) of AIR INDIA LTD. generally
provide that AIR INDIA LTD. reserves its rights to remove from list of
approved suppliers/contractors or to ban business dealings if any Agency
has been found to have committed misconduct, violation of any law or any
term of the agreement and also to suspend business dealings pending
investigation. If such provision does not exist in any GCC, the same may
be incorporated.
2.2 Similarly, in case of sale of material there is a clause to deal with the
Agencies/customers/buyers, who indulge in lifting of material in
unauthorized manner. If such a stipulation does not exist in any Sale
Order, the same may be incorporated.
2.3 However, absence of such a clause does not in any way restrict the right
of Company (AIR INDIA LTD.) to take action/decision under these
guidelines in appropriate cases.
2.4 The procedure of (i) Removal of Agency from the List of approved
suppliers / contractors; (ii) Suspension and (iii) Banning of Business
Dealing with Agencies, has been laid down in these guidelines.
2.5 These guidelines apply to all the Departments/Stations and subsidiaries

of AIR INDIA LTD..

MMAO 715

2.6 It is clarified that these guidelines do not deal with the decision of the
Management not to entertain any particular Agency due to its
poor/inadequate performance or for any other reason.
2.7 The banning shall be with prospective effect, i.e., future business dealings.
3. Definitions
In these Guidelines, unless the context otherwise requires:
i) ‘Party/Contractor/Supplier/Purchaser/Customer’ shall mean and include a

public limited company or a private limited company, a firm whether
registered or not, an individual, a cooperative society or an association or
a group of persons engaged in any commerce, trade, industry, etc.
‘Party/Contractor/Supplier/Purchaser/Customer’ in the context of these
guidelines is indicated as ‘Agency’.
ii) ‘Inter-connected Agency’ shall mean two or more companies having any
of the following features:
a. If one is a subsidiary of the other.
b. If the Director(s), Partner(s), Manager(s) or Representative(s) are common;
c. If Management is common;
d. If one owns or controls the other in any manner;
iii) ‘Competent Authority’ and ‘Appellate Authority’ shall mean the following:
a. For Company (entire AIR INDIA LTD.) Wide Banning
The Executive Director – SBU in charge of Procurement shall be the
‘Competent Authority’ for the purpose of these guidelines. Chairman, AIR
INDIA LTD. shall be the ‘Appellate Authority’ in respect of such cases.
b. In case the foreign supplier is not satisfied by the decision of the First
Appellate Authority, it may approach AIR INDIA LTD. Board as Second
Appellate Authority.
c. For Departments / Stations only
Any officer not below the rank of Executive Director appointed or nominated
by the Functional Director / SBU Head shall be the ‘Appellate Authority’ in
all such cases.
d. For Corporate Office only

For procurement of items / award of contracts, to meet the requirement of
Corporate Office only, Head of CMMG shall be the “Competent Authority” and
Director (Technical) shall be the “Appellate Authority”.
e. Chairman, AIR INDIA LTD. shall have overall power to take suo-moto action
on any information available or received by him and pass such order(s) as
he may think appropriate, including modifying the order(s) passed by any
authority under these guidelines.
iv) ‘Investigating Department’ shall mean any Department or Unit

investigating into the conduct of the Agency and shall include the Vigilance
Department, Central Bureau of Investigation, the State Police or any other

MMAO 715

authority or agency set up by the Central or State Government having
powers to investigate.
v) ‘List of approved Agencies - Parties/Contractors/Suppliers/
Purchasers/Customers shall mean and include list of approved/registered
Agencies - Parties/Contractors/Suppliers/ Purchasers/Customers, etc.
4. Initiation of Banning/Suspension
Action for banning/suspension of business dealings with any Agency should be

initiated by the department having business dealings with them after noticing the
irregularities or misconduct on their part. The Vigilance Department of AIR INDIA
LTD. shall have the right to recommend banning/suspension and this shall be
binding on the Department/SBU and non-compliance of these
recommendations/instructions shall be deemed to be a misconduct on the part
of the Head of the Department/SBU.
5. Suspension of Business Dealings
5.1 If the conduct of any Agency dealing with AIR INDIA LTD. is under
investigation by any department (except Foreign Suppliers of imported
coal/coke), the Competent Authority may consider whether the allegations
under investigation are of a serious nature and whether pending
investigation, it would be advisable to continue business dealing with the
Agency. If the Competent Authority, after consideration of the matter
including the recommendation of the Investigating Department, if any,
decides that it would not be in the interest to continue business dealings
pending investigation, it may suspend business dealings with the Agency.
The order to this effect may indicate a brief of the charges under
investigation. If it is decided that inter-connected Agencies would also
come within the ambit of the order of suspension, the same should be
specifically stated in the order. The order of suspension would operate for
a period not more than six months and may be communicated to the
Agency as also to the Investigating Department. The Investigating
Department may ensure that their investigation is completed and whole
process of final order is over within such period.
5.2 The order of suspension shall be communicated to all Departmental Heads
within the Departments/Stations. During the period of suspension, no
business dealing may be held with the Agency.
5.3 As far as possible, the existing contract(s) with the Agency may continue
unless the Competent Authority, having regard to the circumstances of
the case, decides otherwise.
5.4 If the gravity of the misconduct/violation under investigation is very
serious and it would not be in the interest of AIR INDIA LTD., as a whole,
to deal with such an Agency pending investigation, the Competent
Authority may send his recommendation to Chief Vigilance Officer (CVO),
AIR INDIA LTD. Corporate Office along with the material available. If
Corporate Office considers that depending upon the gravity of the
misconduct/violation, it would not be desirable for all the
Departments/Stations and Subsidiaries of AIR INDIA LTD. to have any
dealings with the Agency concerned, an order suspending business
dealings may be issued to all the Departments/Stations by the Competent
Authority of the Corporate Office, copy of which may be endorsed to the

MMAO 715

Agency concerned. Such an order would operate for a period of six months
from the date of issue.
5.5 For suspension of business dealings with Foreign Suppliers, following shall
be the procedure :-
i. Suspension of the foreign suppliers shall apply through out the
Company including Subsidiaries.
ii. Based on the complaint forwarded by ED-Procurement or received
directly by Corporate Vigilance, if gravity of the misconduct under
investigation is found serious and it is felt that it would not be in
the interest of AIR INDIA LTD. to continue to deal with such
agency, pending investigation, Corporate Vigilance may send such
recommendation on the matter to Executive Director-Procurement
to place it before a Committee consisting of the following :
1. Director-Finance/Head of Corporate Finance;
2. SBU Head/Department concerned;
3. ED-Headquarters/Head of Corporate Office;
4. GM-Legal/Head of Corporate Law.
The committee shall expeditiously examine the report, give its

comments/recommendations within twenty one days of receipt of
the reference by ED-Procurement.
iii. The comments/recommendations of the Committee shall then be

placed by ED-Procurement before the Board of AIR INDIA LTD. and
if the Board opines that it is a fit case for suspension, SBU Head
may pass necessary orders which shall be communicated to the
foreign supplier by ED-Headquarters.
5.6 If the Agency concerned asks for detailed reasons of suspension, the
Agency may be informed that its conduct is under investigation. It is not
necessary to enter into correspondence or argument with the Agency at
this stage.
5.7 It is not necessary to give any show-cause notice or personal hearing to
the Agency before issuing the order of suspension. However, if
investigations are not complete in six months time, the Competent
Authority may extend the period of suspension by another three months,
during which period the investigations must be completed.
6. Grounds on which Banning of Business Dealings can be initiated
6.1 If the security consideration, including questions of loyalty of the Agency

to the State, so warrants;
6.2 If the Director/Owner of the Agency, proprietor or partner of the firm, is

convicted by a Court of Law for offences involving moral turpitude in
relation to its business dealings with the Government or any other public
sector enterprises or AIR INDIA LTD., during the last five years;

MMAO 715

6.3 If there is strong justification for believing that the Directors, Proprietors,
Partners, owner of the Agency have been guilty of malpractices such as
bribery, corruption, fraud, substitution of tenders, interpolations, etc;
6.4 If the Agency continuously refuses to return/refund the dues of AIR INDIA
LTD. without showing adequate reason and this is not due to any
reasonable dispute which would attract proceedings in arbitration or Court
of Law;
6.5 If the Agency employs a public servant dismissed/removed or employs a
person convicted for an offence involving corruption or abetment of such
offence;
6.6 If business dealings with the Agency have been banned by the Govt. or
any other public sector enterprise;
6.7 If the Agency has resorted to Corrupt, fraudulent practices, coercion,
undue influence and other violations including misrepresentation of facts;
6.8 If the Agency uses intimidation/threatening or brings undue outside
pressure on the Company (AIR INDIA LTD.) or its official in acceptance/
performances of the job under the contract;
6.9 If the Agency indulges in repeated and/or deliberate use of delay tactics
in complying with contractual stipulations;
6.10 Wilful indulgence by the Agency in supplying sub-standard material
irrespective of whether pre-despatch inspection was carried out by
Company (AIR INDIA LTD.) or not;
6.11 Based on the findings of the investigation report of CBI/Police/internal
Vigilance or any other investigative agency including Government Audit
against the Agency for malafide/unlawful acts or improper conduct on his
part in matters relating to the Company (AIR INDIA LTD.) or even
otherwise;
6.12 Established litigant nature of the Agency to derive undue benefit;
6.13 Continued poor performance of the Agency in several contracts;
6.14 If the Agency misuses the premises or facilities of the Company (AIR
INDIA LTD.), forcefully occupies tampers or damages the Company’s
properties including land, water resources, forests / trees, etc.
(Note: The examples given above are only illustrative and not exhaustive.
The Competent Authority may decide to ban business dealing for any good
and sufficient reason).
7 Banning of Business Dealings

7.1 Normally, a decision to ban business dealings with any Agency should
apply throughout the Company including Subsidiaries. However, the
Competent Authority of the Department/Unit except Corporate Office can
impose such ban unit-wise only if in the particular case banning of
business dealings by respective Department/Unit will serve the purpose
and achieve its objective and banning throughout the Company is not
required in view of the local conditions and impact of the
misconduct/default to beyond the Department/Unit. Any ban imposed by
Corporate Office shall be applicable across all Departments/Stations of the
Company including Subsidiaries.
7.2 For Company-wide banning, the proposal should be sent by ACVO of the
Department/Unit to the CVO through the Chief Executive of the
Department/Unit setting out the facts of the case and the justification of
the action proposed along with all the relevant papers and documents

MMAO 715

except for banning of business dealings with Foreign Suppliers of imported
coal/coke.
The Corporate Vigilance shall process the proposal of the Department/Unit
for a prima-facie view in the matter by the Competent Authority
nominated for Company-wide banning.
The CVO shall get feedback about that agency from all other
Departments/Stations. Based on this feedback, a prima-facie decision for
banning/or otherwise shall be taken by the Competent Authority.
If the prima-facie decision for Company-wide banning has been taken, the
Corporate Vigilance shall issue a show-cause notice to the agency
conveying why it should not be banned throughout AIR INDIA LTD..
After considering the reply of the Agency and other circumstances and
facts of the case, a final decision for Company-wide banning shall be taken
by the Competent Authority.
7.3 There will be a Standing Committee in each Department/Unit to be

appointed by Chief Executive for processing the cases of “Banning of
Business Dealings” except for banning of business dealings with foreign
suppliers of coal/coke. However, for procurement of items/award of
contracts, to meet the requirement of Corporate Office only, the
committee shall be consisting of Executive Director/General Manager from
Finance, Procurement and Legal:
i) To study the report of the Investigating Agency and decide if a

prima-facie case for Company-wide/Local unit wise banning exists,
if not, send back the case to the Competent Authority.
ii) To recommend for issue of show-cause notice to the Agency by the
concerned department.
iii) To examine the reply to show-cause notice and call the Agency for
personal hearing, if required.
iv) To submit final recommendation to the Competent Authority for
banning or otherwise.
7.4 If the Competent Authority is prima-facie of the view that action for
banning business dealings with the Agency is called for, a show-cause
notice may be issued to the Agency as per paragraph 9.1 and an enquiry
held accordingly.
8 Removal from List of Approved Agencies - Suppliers/Contractors, etc.
8.1 If the Competent Authority decides that the charge against the Agency is
of a minor nature, it may issue a show-cause notice as to why the name

MMAO 715

of the Agency should not be removed from the list of approved Agencies
- Suppliers/Contractors, etc.
8.2 The effect of such an order would be that the Agency would not be
disqualified from competing in Open Tender Enquiries.
8.3 Past performance of the Agency may be taken into account while
processing for approval of the Competent Authority for awarding the
contract.
9 Show-cause Notice
9.1 In case where the Competent Authority decides that action against an
Agency is called for, a show-cause notice has to be issued to the Agency.
Statement containing the imputation of misconduct or misbehaviour may
be appended to the show-cause notice and the Agency should be asked
to submit within 15 days a written statement in its defence.
9. 2 If the Agency requests for inspection of any relevant document in

possession of AIR INDIA LTD., necessary facility for inspection of
documents may be provided.
9.3 The Competent Authority may consider and pass an appropriate speaking
order:
a. For exonerating the Agency if the charges are not established;

b. For removing the Agency from the list of approved
Suppliers/Contactors, etc.
c. For banning the business dealing with the Agency.
9.4 If it decides to ban business dealings, the period for which the ban would
be operative may be mentioned. The order may also mention that the ban
would extend to the interconnected Agencies of the Agency.
10 Appeal against the Decision of the Competent Authority
10.1 The Agency may file an appeal against the order of the Competent
Authority banning business dealing, etc. The appeal shall be to the
Appellate Authority. Such an appeal shall be preferred within one month
from the date of receipt of the order banning business dealing, etc.
10.2 Appellate Authority would consider the appeal and pass appropriate order
which shall be communicated to the Agency as well as the Competent
Authority.
11 Review of the Decision by the Competent Authority

MMAO 715

Any petition/application filed by the Agency concerning the review of the banning
order passed originally by Chief Executive/Competent Authority under the
existing guidelines either before or after filing of appeal before the Appellate
Authority or after disposal of appeal by the Appellate Authority, the review
petition can be decided by the Chief Executive/Competent Authority upon
disclosure of new facts/circumstances or subsequent development necessitating
such review. The Competent Authority may refer the same petition to the
Standing Committee for examination and recommendation.
12 Circulation of the names of Agencies with whom Business Dealings

have been banned
12.1 Depending upon the gravity of misconduct established, the Competent

Authority of the Corporate Office may circulate the names of Agency with
whom business dealings have been banned, to the Government
Departments, other Public Sector Enterprises, etc. for such action as they
deem appropriate.
12.2 If Government Departments or a Public Sector Enterprise request for more

information about the Agency with whom business dealings have been
banned, a copy of the report of Inquiring Authority together with a copy
of the order of the Competent Authority/Appellate Authority may be
supplied.
12.3 If business dealings with any Agency have been banned by the Central or
State Government or any other Public Sector Enterprise, AIR INDIA LTD.
may, without any further enquiry or investigation, issue an order banning
business dealing with the Agency and its inter-connected Agencies.
12.4 Based on the above, Departments/Stations may formulate their own

procedure for implementation of the Guidelines.
*****

MMAO 715

ANNEXURE P - PROPRIETARY ARTICLE CERTIFICATE
S/N DESCRIPTION OF THE
ITEM
1 Description of the item /
services
2 Quantity requirement
3 Estimated value
4 Proprietor’s name
5. Proprietor’s address
Declaration :
I approve the AMC/ repair on PAC basis on the OEM/ authorized service providers.
I approve the above purchase on PAC basis and certify that no other make / brand will
be suitable for the following reasons:
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
Signature and stamp of the Competent / approving authority
Name :
Designation :
Date :
*****

MMAO 715

ANNEXURE Q - UNDERTAKING FROM BIDDERS
I / We …………………………………………………………………………………
confirm that I / we do not have any relative, who is an Employee of Air India or
its subsidiaries and is likely to benefit us during the Award / implementation of
the contract /PO.
I / We also indemnify that any subsequent detection of direct or indirect

beneficiary of any application / award of any contract to any employee of the
organization may result in disqualification / termination as the case may be. Air
India or its subsidiary will have the sole discretion to do so and such cases
cannot be referred for arbitration.
SIGNATURE :
SEAL OF THE COMPANY :
*****

MMAO 715

ANNEXURE R - GENERAL SEQUENCE OF CLAUSES IN TENDER TERMS
1 INVITATION OF BID
2 SUBMISSION OF BID
3 VALIDITY OF BID
4 QUANTITY/ LEAD TIME/ DELIVERY SCHEDULE
5 EARNEST MONEY DEPOSIT
6 EXEMPTION OF EMD/ PREFERENCE TO MSME UNITS
7 SECURITY DEPOSIT
8 SUBMISSION OF SAMPLES
9 METHOD OF QUOTING AND ARRIVING AT L1 & L2 BIDDER
10 APPLICATION OF SPLIT CRITERIA
11 CRITERIA FOR SPLITTING OF TENDER QUANTITY
12 PRICE COMPARISON/ NEGOTIATION
13 AWARD DECISION
14 RELEASE OF CONTRACT AND CONTRACT MANAGEMENT
15 SUBMISSION OF PRODUCTION SAMPLE
16 PENALTY
17 SUBMISSION OF INVOICE
18 PAYMENT TERMS AND MODE OF PAYMENT
19 INSPECTION
20 EXIT/ TERMINATION
21 SUBMISSION OF INTEGRITY PACT
22 GENERAL TERMS
*****

Mmao 715 PDF

Uploaded by

Copyright:

Available Formats

Mmao 715 PDF

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Mmao 715 PDF

Uploaded by

Copyright:

Available Formats

MMD PROCUREMENT MANUAL

AIR INDIA LTD.

Materials Management Department

Date of Issue: 15th March 2018 2

Materials Management Department

Date of Issue: 15th March 2018 3

Materials Management Department

Date of Issue: 15th March 2018 4

Materials Management Department

Date of Issue: 15th March 2018 5

Materials Management Department

Date of Issue: 15th March 2018 6

Materials Management Department

Date of Issue: 15th March 2018 7

Materials Management Department

Date of Issue: 15th March 2018 8

Materials Management Department

Note: The oath will be administered by respective MM admin / sectional heads to

Date of Issue: 15th March 2018 9

Materials Management Department

Date of Issue: 15th March 2018 10

Materials Management Department

Date of Issue: 15th March 2018 11

Materials Management Department

Date of Issue: 15th March 2018 12

Materials Management Department

Date of Issue: 15th March 2018 13

Materials Management Department

Date of Issue: 15th March 2018 14

Materials Management Department

Date of Issue: 15th March 2018 15

Materials Management Department

Date of Issue: 15th March 2018 16

Materials Management Department

Date of Issue: 15th March 2018 17

Materials Management Department

Date of Issue: 15th March 2018 18

Materials Management Department

Date of Issue: 15th March 2018 19

Materials Management Department

Date of Issue: 15th March 2018 20

Materials Management Department

Date of Issue: 15th March 2018 21

Materials Management Department

Date of Issue: 15th March 2018 22

Materials Management Department

6.1.3. In case of non-availability of personnel at the designated level,

Date of Issue: 15th March 2018 23

Materials Management Department

Date of Issue: 15th March 2018 24

Materials Management Department

Date of Issue: 15th March 2018 25

Materials Management Department

Date of Issue: 15th March 2018 26

Materials Management Department

Date of Issue: 15th March 2018 27

Materials Management Department

Date of Issue: 15th March 2018 28

Materials Management Department