PURCHASE/ CONTRACT

PROCEDURE – 2020
(PCP – 2020)

Corporate Materials Management Group

For Internal Circulation Only

Purchase/ Contract Procedure 2020 (PCP - 2020)

 CONTENTS

Clause No. Subject Page

1.0 Introduction
2.0 Raising of Indents
2.2 For Purchase of Materials
2.3 For Job/ Service Contracts
2.4 Estimated Value
3.0 Procurement Cases::Scrutiny of Indents/
Proposal
4.0 Action on Indent by MM Dept. /Contract Cell/
Contracting Department
5.0 Mode of Tendering
5.2 Open / Global Tender
5.3 Limited Tender Enquiry
5.4 Single Tender Enquiry
5.4.1 Single Tender Enquiry (Proprietary)
5.4.2 Single Tender Enquiry (Other than Proprietary)
5.5 Repeat Orders
5.6 Rate Contract (Own)
5.7 Procurement on GeM 16
5.8 Emergency Purchase / Job Contract
6.0 Invitation to Tender
6.14 Consideration of Agents
6.15 Integrity Pact
6.16 Tender Documents
6.17 Methods for Calling Tenders
6.18 Expression of Interest
6.19 Pre Bid Discussions
6.20 Constitution of Tender Committee

Purchase/ Contract Procedure 2020 (PCP - 2020)

7.0 Receipt and Opening of Offers 26
7.30 Return of Unopened Price Bids 30
8.0 Earnest Money 30
8.4 Return of Earnest Money 32
9.0 Scrutiny of Quotations 33
9.1 Single Part Quotations 33
9.2 2/3 Part Quotations 33
9.4 Opening of Price Bids 35
9.5 Comparative Statement of Price Bids 35
10.0 Purchase / Contract Proposal 37
11.0 Price Negotiations 40
12.0 Trial Purchase / Work Order 41
13.0 Issue of order for Purchase / Job contract 42
13.7 Posting of Post Contract Details 43
14.0 Extension of Delivery Period / Contract Period 43
and Liquidated Damages
15.0 Amendments to Purchase / Contract Order 44
16.0 Payment Terms 44
17.0 Taxes 46
18.0 Cancellation of Purchase Order / Contract and Risk 46
Purchase
19.0 Vendor Development 47
20.0 Closure of Contract 48
21.0 Price Discovery through Reverse Auction 49
22.0 Banning of Suppliers / Contractors 49
23.0 Procedure for Small Value Purchases 49
24.0 Procedure for Small Value Job / Service Contracts 49
25.0 General 53

Purchase/ Contract Procedure 2020 (PCP - 2020)

 ABBREVIATIONS USED
AMR Addition, Modification and Replacement
AP Automatic Procurement
BG Bank Guarantee
CA Competent Authority
CE Chief Executive
CEC Commercial Evaluation Committee
CEO Chief Executive Officer
CTE Chief Technical Examiner
CVC Central Vigilance Commission
CVO Chief Vigilance Officer
DOP Delegation of Powers
DRO Direct Reporting Officer
ED Executive Director
EMD Earnest Money Deposit
EOI Expression of Interest
EPS Enterprise Procurement System
ERP Enterprise Resource Planning
FIFO First In First Out
GARN Goods Acceptance/Rejection Note
GC Guarantee Certificate
GCC General Conditions of Contract
GeM Govt. e-Marketplace
HOMM Head of Material Management
HOD Head of the Department
IPSS Inter Plant Steel Standards
ISO International Organisation for Standardisation
LCNITC Landed Cost Net of Input Tax Credit

Purchase/ Contract Procedure 2020 (PCP - 2020)

LCNS Landed Cost Net of Set Off
LD Liquidated Damages
LOA Letter of Acceptance
LPP Last Purchase Price
LTE Limited Tender Enquiry
MM Materials Management
MSE Micro & Small Enterprises
NIT Notice Inviting Tender
OEM Original Equipment Manufacturer
OES Original Equipment Supplier
OTE Open Tender Enquiry
PAN Permanent Account Number
PGB Performance Guarantee Bond
PO Purchase Order
PSU Public Sector Units
RA Reverse Auction
RBI Reserve Bank of India
RFQ Request for Quotation
SBD Standard Bidding Document
SRM Supplier Relationship Management
STE Single Tender Enquiry
TC Tender Committee
TC Test Certificate
TEC Technical Evaluation Committee
TOD Tender Opening Date
VAT Value Added Tax
WC Warranty Certificate
WO Work Order

Purchase/ Contract Procedure 2020 (PCP - 2020)

1.0 INTRODUCTION
1.1 The objective of the Purchase / Contract Procedure is to ensure
transparency, fairness, uniformity and efficiency in the
procurement/ contract/ tendering process across SAIL Plants/
Units.
1.2 The Purchase / Contract Procedure – 2020 (PCP-20) is in line with
CVC guidelines and has been finalized after in-depth deliberations
with Materials Management, Contract Cell, Vigilance, Projects and
Finance.
1.3 The procedure is applicable to all purchases / contracts for Goods
or Services or Works and Job Contracts/ Project Cases/
Conversion and Outsourcing of all types, unless specified
otherwise. For Import of Coal and Coke, “SAIL Policy for Import of
Coal & Coke” shall be followed. For Projects cases, in case of
conflict between provision of Purchase / Contract Procedure
(PCP) and Standard Bidding Document (SBD), the provisions of
SBD shall prevail.
1.4 Deviations to the PCP-20 should be rare. In exceptional cases,
deviation may be permitted for recorded reasons with the specific
approval of Chief Executive Officer of the Steel Plants / Chief
Executive of the Units. The deviation shall be reported to CVO
through ACVO of the plant / unit and to Corporate Materials
Management Group (CMMG) (For MM Cases) & Corporate
Projects (for Projects cases). For Units being headed by Executive
Director, the Chief Executive will be respective Functional Director
to whom the concerned Unit is reporting to.
1.5 In addition to procedure indicated in PCP-20, the different circular /
guideline issued by CVC from time to time may also be referred
to. If any change is required to be made in the existing Purchase/
Contract Procedure due to CVC instructions or otherwise,
amendments will be issued by CMMG.
1.6 The concept of Contracting Department has been introduced in this
version of PCP which is applicable for those Units which are not
having dedicated MM Dept. / Contract Cell (including Projects
Department).
2.0 RAISING OF INDENTS
2.1 The indents for procurement of goods or services or both or
proposal for job / operational / works contracts shall be raised by
the department(s) concerned or designated centralized agencies.

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 These Indents shall be prepared in the prescribed format (to be
designed by each plant / unit). The indent shall be signed / e-
signed / cleared online in SAP by the Head of the Department
(HOD). The plant / unit shall devise a proper system of numbering
the Indents initially and their processing reference at different
stages to facilitate cross-reference. Suitable records shall also be
maintained for such numbering / references at different stages for
control purposes. Efforts shall be made, wherever possible, to
maintain records electronically and generate reference numbers
online.
2.1.1 For Project / Contract cases / Capital / AMR schemes, proposal will
be initiated by Indenter and processed by MM Dept./ Contract Cell/
Project Dept./ contract operating authority / designated centralized
agency based on the scheme sanctioned by the management.
2.1.2 The names of the suggested registered manufacturers / suppliers /
traders / contractors, as the case may be, may be indicated by the
indenter in the indent on the basis of past experience of parties along
with order references, if any.
2.1.3 In case, it is required to place order on more than one source, the
Indenter shall specify so in the indent giving the maximum number
of suppliers/ contractors to be engaged, justifying the reasons for
the same.
2.1.4 In case there are certain quantifiable factors required to be
considered / loaded while evaluating the prices quoted by the
tenderers, such factors in clear quantifiable terms should be
mentioned in the indent by the indenter.
2.1.5 In case the tenderers are required to submit samples along with the
quotation, the same should be clearly mentioned in the Indent itself.
However, no sample should be called for the items for which detailed/
standard specifications are available. For procurement of clothing
and textile items detailed specifications may be mentioned & no
sample shall be called. However, if required, provision for
submission of an advance sample by successful bidder(s) may be
stipulated for indeterminable parameters such as, shade / tone, size,
make-up, feel, finish and workmanship, before giving clearance for
bulk production of the supply.
2.2 FOR PURCHASE OF MATERIALS
2.2.1 The indenter should give full and complete information regarding
the description and specification of the material to be procured. To
the extent possible, specifications given should be standard
specifications conforming to IPSS, PS, ISS or DIN, etc. The cut-off

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 points for performance / acceptance and the points for bonus and
penalties should be indicated, wherever feasible.
2.2.2 Digitized / scanned copies of manufacturing drawings, wherever
required, should be provided with latest revision. Physical copies
in adequate numbers may be provided if the drawings are not
available in electronic form.
2.2.3 Along with the indent, the indenter shall also prepare and enclose the
following:
a) In respect of new items, a check-list as per the prescribed
proforma (to be designed by each plant / unit) justifying the
indented quantity, with all columns correctly and completely
filled. This check list shall be signed by the HOD.

b) Due diligence must be made before procuring the items as

Proprietary. Efforts made on de-proprietarisation should be
recorded and a certificate on the prescribed proforma (to be
designed by each Plant / Unit) signed by the HOD has to be
provided. The purchase of items on proprietary basis should be
kept at the minimum possible level and should be resorted to
when other technically acceptable substitutes are not available.
c) Proposed criteria for technical eligibility & acceptance should
neither be made very stringent nor very lax to restrict / facilitate
entry of bidders. It should be ensured that the eligibility criteria are
exhaustive yet specific and there is fair competition. It should also
be ensured that the criteria are clearly stipulated in unambiguous
terms. It should take into account the aspects mentioned in Clause
no. 6.4 (a) to (g).
2.2.4 In the indent, the indenter will ensure, depending upon the nature of
the item indented, incorporation of special requirement of inspection/
quality assurance plan / special packing instructions, if any.
The requirement of inspection / quality assurance plan / special
packing instructions, if any, should be made part of the tender
document.
2.2.5 In case some of the items in the Indent are matching / complementary
parts of an equipment / assembly and are required to be supplied by
one supplier only, the Indenter shall specify this in the Indent.
2.2.6 With a view to optimizing the utilization of internal facilities, each
plant / unit is to prepare and get approved by the Competent
Authority, an annual plan for 'Make' items in increasing numbers on
cost-effective basis, one month before the beginning of each
financial year for the ensuing financial year. Indents shall not be

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 raised for items identified as 'Make' in the annual plan for the
financial year. However, where part quantity will be identified as
“Make” and balance as “Buy”; indents for “Buy” quantity only shall
be raised. For “Make” items the department shall raise 'Work Order
(WO)' in the prescribed form, to be placed on the shops.
2.3 FOR JOB/ SERVICE CONTRACTS WHICH ALSO INCLUDES
OPERATIONAL CONTRACTS, HANDLING, CONVERSION,
HIRING, CONSULTANCY, WORKS ETC.
2.3.1 The indenter should give detailed information regarding description
of the jobs to be executed along with the materials to be supplied and
equipment to be deployed by the contractor, wherever applicable.
For the items to be supplied, the quantity along with detailed
specifications and drawing number, etc., should be given in the
indent. Similarly, for the equipment to be deployed the desired
capacities of the equipment, their ownership, procurement through
rent / lease, etc., should be specified in the indent.
2.3.2 The overall quality of the jobs to be executed along with the
expected Performance Guarantee parameters should be clearly
indicated in the indent. The indent should also include any other
special terms & conditions, other than the General Terms &
Conditions, required for the execution of the jobs.
2.3.3 In case only one contractor is to be engaged for some of the jobs / all
the jobs given in the Indent, the Indenter shall specify this in the
indent.
2.3.4 In the indent, the indenter will ensure incorporation of suitable special
terms & conditions, particularly the Inspection Clause, and specify
the Inspecting agency for certifying the execution of jobs as per
contractual terms & conditions. The name and the designation of
the executing officer / contract operating authority would also be
mentioned in the indent / proposal.
2.3.5 With a view to optimizing the utilization of internal resources, each
plant / unit is to prepare an annual plan and get it approved by the
Competent Authority one month before the beginning of each
financial year for the ensuing financial year of the jobs which cannot
be undertaken internally and are to be off-loaded to the contractors
during the financial year. Such list should be in decreasing number
on cost-effective basis. Indents shall not be raised for the jobs not
included in the approved annual plan for the financial year. In rare /
exceptional cases, where the jobs were not included in the
approved annual plan for the financial year, such indents shall be
raised with recorded reasons and the approval of the Head of Works

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 (For Steel Plants / Units).
2.3.6 For same scope of work to be executed at different locations and / or
in different phases, in a plant/ unit the annual list of such jobs
prepared by different departments / shops, should be scrutinized
and co-ordinated by one centralised agency for rationalization as
per extant Outsourcing Policy of SAIL before it is approved by the
Competent Authority. Accordingly, only one consolidated indent
should be raised by the centralised agency for same / similar scope
of work considering the locational issues and if more-than one
contractor is required to be engaged for such jobs, justification must
be recorded in the indent (Ref. Para 2.3.3). In exceptional cases
where one consolidated indent cannot be raised for same / similar
scope of work, approval of the Head of Works / Head of Unit shall be
obtained to raise these indents.
2.3.7 In case of proposals for consultancy service, the indenter shall
provide complete details of Terms of Reference (TOR). Consultants
or any of their affiliates will not be hired for any assignment, which
by its nature, may be in conflict with another assignment of the
consultants.
2.4 ESTIMATED VALUE
2.4.1 It will be the prime responsibility of the indenter to prepare judicious
estimate of the current value of the Indent. The indenter shall take
the help of engineering services and other centralised agencies, if
so required, for the preparation of judicious estimate using scientific
/ technical methods. The estimated value of each and every item to
be procured / each and every item of work to be executed will be
filled in the appropriate column in the indent. The detailed estimate
signed by the Head of the Indenting Department will be enclosed
with the indent. Basis of estimate shall be invariably recorded.
Following shall be the guidelines for the preparation of estimates:-
a. For frequently purchased items (i.e., items purchased at least
twice during last three years), the estimate shall be based on the
last purchase price obtained through normal tendering and
competitive bids with adjustment for variations in the prices of raw
materials, wages and other inputs including current market
conditions based on relevant RBI indices or any other indices,
wherever appropriate.
b. For infrequently purchased items (i.e. items not purchased twice
last three years)/ new items, scientific/ technical estimate shall be
prepared taking into consideration the cost of raw material,
casting/ machining, treatment/ testing, labour, overhead

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 expenses, transportation and applicable statutory duties and
levies etc. In case, cost of making pattern/ engineering drawing/
development of the items are also included in the estimate, all
care should be taken to exclude this portion of cost in future while
re-indenting/ re-ordering. If required, for guidelines, budgetary
quotations may be obtained for infrequently purchased items
preferably from OEM/ OES/ authorized dealer / registered
vendors/ last supplier, for new items(s) or new technology efforts
should be made by the indenter to get more than one budgetary
quotation. For preparing departmental estimate, the lowest of
rate(s) of budgetary offers or Last Purchase Price (LPP) or Cart
Value on GeM, whichever is lower, is to be considered.
c. For procurement of proprietary items, LPP, if available in the last
2 years, should be considered as estimate. If LPP is more than
two years old, Adjustment for variations in the prices of raw
materials, wages and other inputs including current market
conditions may be done based on relevant RBI indices or other
indices wherever appropriate. In cases where LPP is not
available, the supplier’s price list / rates along with the applicable
discounts shall be obtained for preparing estimates. Such list
should be directly obtained from the manufacturer only and the
list supplied by dealers / authorized agents should not be
considered unless authorized by the manufacturers. For a product
available on GeM, estimate may be based on prevailing product
price on GeM.
d. For Job/ Service contracts including manpower related contract,
conversion, handling, port related contracts, fresh estimates shall
be prepared for each Indent / contract. While preparing estimate,
last contract price / job order value should not be the sole
consideration for the basis of estimate. For the preparation of
estimates, the following factors may be considered:
i) Job elements
ii) Supplies to be made
iii) Mobile equipment / tools and tackles to be provided.
iv) Any other services, fee against statutory obligations,
overheads etc.
v) Green field / brown field job, completion period, shutdowns
involved.
Labour cost for each element of job, cost of supplies, hiring /
operation cost of mobile equipment / tools and tackles and any
other services, etc., shall be prepared for job contracts. For

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 standard service contracts, if available on GeM, estimate may be
based on the prevailing rates of such service on GeM.
e. For Projects cases, the initial estimate prepared by the consultant
should be examined by concerned officials and duly approved by
the authority approving the issuance of tender enquiry in
consultation with associate finance.
The estimates finalised prior to the notice inviting tender should
be duly recorded. In case the estimates are required to be
updated after pre-bid discussions or techno-commercial
discussions, the detailed reason for such update should be duly
recorded in writing by the Tender Committee with proper
deliberations and approved by the Tender Approving Authority.
After approval of Tender Approving Authority, the Consultant/
Agency/ Department be asked to submit revised estimate
(incremental / decremental as the case may be). The Revised
Estimate be examined by the concerned officer(s)/ Department.
Before approving, the Tender Approving Authority shall consult
the Associate Finance.
3.0 SCRUTINY OF INDENTS / PROPOSAL
3.1 The indents for purchase of material shall be scrutinized by the
Screening Committee constituted by the Competent Authority for the
nature of the items concerned, comprising the representatives of the
related departments such as Centralized Maintenance, Central
Workshop, indenter, MM Dept., Finance, etc. The executives
nominated for the Screening Committee shall be in the rank of E-5
and above. The Screening Committee shall scrutinize the Indent
within a week of the receipt by it. The scrutiny by the Screening
Committee shall inter-alia cover the following:-
a) Norms prescribed with the approval of the Competent Authority for
inventory holding both in terms of value and duration of
consumption.
b) The complete specifications including drawings, if required.
c) Non-inclusion of the item in approved annual plan for “Make
Items”, mentioned in para 2.2.6,
d) Consumption pattern,
e) Stock in hand and dues in,
f) Budget availability,
g) Availability of all prescribed enclosures and certificates,
h) Estimates along with the basic data,

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 i) Suggested mode of procurement/ tendering giving reasons..
j) Names of suppliers suggested by the Indenter in the Indent,
k) Inspection guidelines.
l) Eligibility & acceptance criteria for open / global tender inquiries
or GeM. Extant CVC Circulars to be referred.
th
(CVC OM No. 12-02-1-CTE-6 dated 17 December 2002 and
th
dated 7 December 2004 need to be annexed in the CVC
Circulars section at the end of booklet)
m) The QCBS (Quality & Cost based selection) / Life Cycle Cost may
be adopted as the mode of evaluation on case to case basis.
However, parameters of evaluation must be clearly mentioned.
3.1.1 Intimation of the clearance of quantity and value of an Indent to be
sent to the Indenter by the Screening Committee to update their
records within three days of completion of the scrutiny by the
Screening Committee.
3.1.2 In case of computer generated indents of automatic procurement
(AP) items, based on the re-order level, screening is not required by
the Screening Committee.
3.1.3 Indents value below ` 5 Lakhs (excluding Proprietary items and Non-
Proprietary STE items), covering the annual requirement and items
cleared by empowered committee constituted with the approval of
Chief Executive (excluding Job Contracts, Proprietary items and
Non-Proprietary STE items) need not be scrutinized by the
screening committee and shall be cleared by the head of indenting
department for further processing by the MM Dept/ concerned
department. These indents shall have all details as per Para 3.1 and
also a certification from the head of indenting dept., indicating that
the indent is for the total annual quantity required.
3.2 The indents/ proposal for the job contracts shall be scrutinized by the
Screening Committee, constituted by the Competent Authority for
the nature of the job concerned, comprising the representatives of
the related departments such as Indenter, centralized
maintenance, services, Contract Cell, indenter, Finance, etc. The
executives nominated for Screening Committee shall be in the rank
of E-5 and above. The Screening Committee shall scrutinize the
Indent within two weeks of the receipt of the Indent by it.
The Screening Committee shall inter-alia cover the following, while
examining the Indent / proposal:
a) Inclusion of the job in approved Annual Plan, mentioned at Para
2.3.5,

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 b) Complete job description including scope, drawings, if required,
c) Budget availability,
d) Availability of all prescribed enclosures & certificates,
e) Estimates along with the basic data,
f) Terms & Conditions required for execution of the job including the
eligibility, payment terms, price evaluation criteria,
g) Suggested mode of tendering, giving reasons.
h) Names of contractors, suggested by the Indenter in the Indent.
3.2.1 Intimation of the clearance of quantity / scope of work and value of an
Indent to be sent to the Indenter by the Screening Committee to
update their records within three days of completion of the scrutiny by
the Screening Committee.
3.3 In case of any indent going beyond the approved overall budget of the
department concerned, for additional/ readjustment/ re-
appropriation of the budget, approval of Competent Authority as per
the Delegation of Power (DOP) should be obtained.
3.4 If the indent is found to be incomplete in any respect, it will be
returned by the respective Screening Committee to the indenter for
completion.
3.5 The scrutinized indent, found complete in all respects, shall be sent
to the MM Dept./ Contract Cell/ Contracting Department after
obtaining approval of the Competent Authority.
4.0 ACTION ON INDENT BY MM DEPTT / CONTRACT CELL/
CONTRACTING DEPARTMENT
4.1 On receipt of the indent by the MM Dept. / Contract Cell/ Contracting
Department, an entry will be made in the Indent Register /
Computer and a case-file opened. Separate Indent Registers shall
be maintained for purchase of material and for job contracts
Indents. While processing the indent for tendering, if any
discrepancy is found, the MM Dept. / Contract Cell/ Contracting
Department shall return the indent to the Screening Committee /
indenter for compliance / clarification by either Screening
Committee or by indenter, on such discrepancies.
4.2 Considering the nature of item / job, its value / cost involved,
knowledge of suppliers / contractors, prevailing market scenario,
etc., the mode of tendering for indent value ` 5 Lakhs and above
shall be suggested or ratified by the respective Screening
Committee and for indents valuing below ` 5 Lakhs as referred in
Para 3.1.3, the mode of tendering shall be suggested by the MM

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 Dept./ Contract Cell/ Contracting Department based on
recommendations of indenter/ HOD of concerned department, for
approval of Competent Authority.
4.2.1 The indents should be processed by the MM Dept. / Contract Cell/
Contracting Department within three working days / seven working
days respectively for purchase / job contract, on receipt of the
indent from respective Screening Committee. The proposal
seeking the approval of the Competent Authority for procurement /
contracting shall also envisage terms and conditions of the tender
with deviations, if any, mode of tendering, the cost of tender
documents, to be fixed either by Screening Committee or MM
Dept. / Contract Cell/ Contracting Department (as the case may
be), and in case of Open / Global Tender, the starting and closing
date for sale of tender documents along with the name of the
office of the plants / units of SAIL for issue of the tender
documents. Procurement process is to be initiated by the MM
Dept./ Contract Cell/ Contracting Department, which include issue
of enquiry after receipt of the approval of the Competent Authority
as per DOP.
4.3 Enquiry for the purchase of materials / job contracts shall be issued
by MM Dept./ Contract Cell/ Contracting Department within seven
working days from the date of the approval accorded by the
Competent Authority for mode of tendering. Names of tenderers from
whom tender is invited, in case of limited or single tender, shall also
be approved by the Competent Authority.
4.4 MM Dept. / Contract Cell/ Contracting Department should ensure
that a reasonable time is fixed for the bids to remain valid while
issuing tender enquiries, keeping in view the complexity of the
tender, time required for processing the tender and seeking approval
of the Competent Authority etc. and finalization of tender within the
stipulated original validity should be ensured, as far as possible.
5.0 MODE OFTENDERING
5.1 The recommended modes of tendering for placement of orders are
as under:
i) Open Tender / Global Tender,
ii) Limited Tender Enquiry (LTE)
iii) Single Tender for proprietary cases or Items from Original
Equipment Manufacturer / Supplier.
iv) Single Tender (other than Proprietary cases)
5.1.1 As a substitute to frequent tendering, for facilitating timely

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 availability of any goods or service, Order placement may also be
considered on the basis of the following:
i) Repeat Orders;
ii) Rate Contract (RC)/ Long Term Agreement (LTA) /
Memorandum of Understanding (MOU) of SAIL;
iii) Govt. e-Marketplace (GeM) (will be governed by General Terms &
Condition as available on GeM and guideline issued by CMMG).
5.1.2 In addition to the above, there may be occasions when the plant / unit
may have to resort to emergency purchase / job contract.
5.1.3 Approval of Competent Authority shall be obtained for issuance of
NIT in each of the above case.
5.2 OPEN / GLOBAL TENDER
5.2.1 Open / Global Tenders are to be considered, if any one or more of the
following circumstances exist:
i) When reliable manufacturers / suppliers / traders / contractors as
well as latest technology are not clearly known.
ii) W hen it is felt that advertising may elicit better response.
iii) For any other commercial consideration i.e. as a policy, DOP /
estimated value of purchase / job contract, formation of cartel / ring
like situations etc.
5.2.2 Plants / units shall ensure that the complete tender documents along
with the enclosures, if any, are uploaded and displayed on the SAIL
Tender Website which can be downloaded by the interested
tenderers. Application made on such forms shall be treated as valid
for participation in the tender.
5.2.3 All Open / Global tender notices shall be published on SAIL Tender
website and will get reflected / published on Central Public
Procurement (CPP) portal as well as Govt. e-Marketplace (GeM)
portal. No notice is required to be given in newspapers for such
tenders. Addendum / corrigendum / extension of Bid Submission /
Bid Opening Date if any shall also be published on the
abovementioned sites only. Therefore, a clause to this effect should
be inserted in the NIT. Additionally, for import cases, the tender
notices should also be published in Indian Trade Journal (ITJ) of
DGCI&S, Ministry of Commerce & Industry.
5.2.4 Intimation for open / global tenders may be given by the dealing
officer by email to all the parties who had participated in tenders
earlier or any other prospective tenderers.

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5.3 LIMITED TENDER ENQUIRY (LTE)
5.3.1 LTE should be issued only when reliable manufacturers / suppliers /
traders / contractors are known. A list of such registered manufacturers /
supplier / traders / contractors shall be maintained by MM Dept. /
Contract Cell/ Contracting Department. The registration of
manufacturers / suppliers / traders / contractors should be according to
the relevant IPSS. LTE should be issued only to registered vendors. In
addition to this, vendors registered with other SAIL plants / units should
be considered for issuance of LTE provided there is no adverse report on
their performance.
5.3.2 When the decision is to adopt LTE as a mode of tendering, the
whole indent should be treated as one and no split up thereof
should be made to reduce the value of tender enquiries.
5.3.3 Emphasis is to be given to maximize finalization of contracts/
procurement through e-mode of tendering such as ERP / SRM /
EPS / web enabled system. In plants/ units, where SRM/ EPS is
implemented and e-tendering is not resorted to, approval of HoMM
shall be required. Wherever e-tendering has not been resorted to,
original LTE papers should be dispatched through registered post /
under certificate of posting / e-mail / FAX / courier to the address of
the firm as available in the records of the company. Original LTE
papers should not be given by hand to the representative(s) of any
firm.
5.3.4 The selection of firms for LTE shall be done by the MM Dept. /
Contract Cell/ Contracting Department in a judicious manner to
ensure that:
i) The firms are financially and technically sound,
ii) The past performance of the firms with regard to quality and adherence
to time schedule should also be considered while recommending a firm
for issue of LTE,
iii) The supplier / contractor who has successfully made the last supply /
executed the last job, needs to be considered for issuance of LTE,
iv) The firms registered for a particular category are all given coverage by
rotation. Subject to (i), (ii) and (iii) above, no registered party should be
considered for LTE for the second time unless all the registered parties in
the list have been considered at least once in each cycle.
v) Wherever sub-category-wise registration exists, enquiry should be
issued to all such registered parties. Any deviation should be recorded
with reasons.

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 Explanation: In the clause No. 5.3.4 (iv), the registration of firms has
been done for general categories, namely Bearings, motors, gears etc.
Wherever feasible, subcategory-wise registration should be done and
Limited Tender Enquiry should be sent to all such registered vendors in
the sub-category.
5.3.5 In cases where there are less than three registered suppliers for an
item, vendors registered for similar items with other SAIL plants /
units should be considered for issuance of LTE, provided there
is no adverse report on their performance. Under exceptional
cases, such tender enquiry to only these two registered suppliers
shall be issued with the approval of Chief Executive Officer of the
plants / Chief Executive of the units.
However, for the items so far purchased as proprietary for which
additional vendor(s) has / have been found / developed, LTE to all
such additional vendors shall also be issued with the approval of
Competent Authority as per DOP.
5.3.6 For capital sanction and Addition, Modification, Replacement (AMR)
cases, the recommendations received from the consultants / Project
Department shall also be given due consideration.
5.3.7 In case of purchases against indent value of `10 Lakhs and above,
wherever registered manufacturers are available, LTE should be
limited to such manufacturers only. While issuing LTE to
manufacturers, it should be clearly stipulated that in case any of their
dealer(s) is authorised to quote on their behalf, a copy of such
authority letter be endorsed to SAIL. Only after receipt of such
authority letter, the quotation received from the dealer shall be
entertained. Subsequently, a copy of all the correspondences with
the dealer(s) shall be sent to the manufacturer(s) simultaneously.
For indent valued below `10 Lakhs, the LTE may be directly issued
to the authorised dealer(s) after confirming the validity of their
dealership. A copy of correspondences directly made with the
dealer(s) shall also be sent to the manufacturers simultaneously. In
Plants/ Units where SRM is available, online authorization of
authorized dealers shall be accepted.
5.3.8 LTE should be posted on the SAIL Tender website as well as CPP
Portal by the respective plants / units as per the provisions in the
notification published in CPP Portal at URL::http//www.eprocure.
gov.in.
5.3.9 The following instructions would be put up on the SAIL Tender
Website:
“The Offer against these tenders from suppliers to whom LTE has

Purchase/ Contract Procedure 2020 (PCP - 2020) Page 13/53

 been issued shall only be considered, offer from any other party shall
be treated as unsolicited.
In order to increase competition, following shall also be posted on the
website:
“Whoever is interested to be registered as a supplier of these items,
should fill up the vendor registration form, hosted on the website. The
normal registration process shall, thereafter be followed by the plants/
units for registering the eligible suppliers. This information is solely
for the purpose of exploring the possibility of enhancing vendor base,
wherever required and should not be considered as a purchase
enquiry. Purchase enquiry in future may be issued to such suppliers,
if registered.”
5.3.10 LTEs should be issued in such a way that sufficient competitive
quotations are received from the parties.
5.3.11 For ISO quality critical items, ISO procedure issued by SAIL plants /
units for selection of vendors for issuance of LTE shall apply. For
registration of vendors even for purchase of ISO quality critical items,
relevant IPSS should be followed.
5.4 SINGLE TENDER ENQUIRY
5.4.1 Single Tender Enquiry (Proprietary)
Enquiries for Proprietary Items / Services / Contracts (Original
Equipment Manufacturer / Suppliers / Technology Supplier / Job
Contracts) should be issued with the approval of competent authority
as per the DOP. Such Proprietary Items / Services/ Contracts should
be taken from / awarded to their manufacturers or their authorized
dealers (where the manufacturer does not supply the equipment
directly) or the technology / service provider or contractor only. In
case there is more than one dealer / partner authorized to sell a
particular proprietary item / services to plant / units, discount may be
possible through Limited Tender Enquiry, therefore LTE may be
issued to the authorized dealers / partners.
5.4.2 Single Tender Enquiry (Other than Proprietary)
The cases where the enquiry is restricted to only one source, though
many sources / suppliers / contractors/ agencies exist, such
procurement/ contract is on nomination basis. Such Single Tender
Enquiries should be issued as an exception only and processed,
after recording reasons. The indenter should take approval of Chief
Executive Officer of the plant / Chief Executive of the unit in all
cases except procurement/ service contract from PSUs / Central
Government/ State Government Undertakings where approval of

Purchase/ Contract Procedure 2020 (PCP - 2020) Page 14/53

 Competent Authority shall be obtained as per the applicable DOP.
5.4.2.1 A list of items procured contract awarded on single tender basis
should be hosted on SAIL Tender Website to enhance vendor base
of such items / job as per the provisions in the notification published
in CPP Portal at URL::http//www.eprocure.gov.in.
5.4.2.2 The instructions to be included on the website should be that,
“Whoever is interested to be a registered supplier of these items,
should fill up the vendor registration form, uploaded on the website.
The normal registration process shall, thereafter be followed by the
plants / units for registering the eligible suppliers.”
5.4.2.3 Plants / units should ensure updating of the list of single tender
items on website on a quarterly basis. A resource person at
respective plants / units should be nominated for co-ordination.
5.4.2.4 All STEs should also be posted on the SAIL Tender website as well
as CPP Portal by the respective plants / units to be accessed by
the vendor through user ID and Password.
5.5 REPEAT ORDERS
5.5.1 Normally, as per the lead time, prior to expiry of the running supplies /
job contracts, the Indenter has to process fresh Indent. However, due
to unavoidable circumstances, if either the Indent is not processed or
even after processing the Indent, it is not possible to place fresh order
in time, under such circumstances for the item / job contract for which
continuity is essential, it may be necessary to place repeat order on
existing party/ contractor. After recording the reasons leading to
placement of repeat order, the proposal for repeat order on same
terms, conditions & specifications may be considered on the
following:
i) The original order must have been placed in the usual course after
issue of LTE or Open Tender. Emergency orders shall not be
considered;
ii) Not more than two years have elapsed since placement of the
original order;
iii) No price escalation for firm price orders shall be given;
iv) No repeat order shall be placed, if there is downward trend in
prices;
v) Not more than two repeat orders should be placed;
vi) The quantity/ scope considered for ordering is not more than
100% of the original ordered quantity/ scope, for each repeat
order;

Purchase/ Contract Procedure 2020 (PCP - 2020) Page 15/53

 vii) The original order was not placed on the basis of a higher price
for earlier delivery;
viii) Sanction of Competent Authority for repeat order shall be
obtained.
5.5.2 However, in exceptional cases, a third repeat order can be placed
with the approval of Chief Executive Officer of the plants / Chief
Executive of the units, after recording justification.
5.6 RATE CONTRACT (OWN)
5.6.1 As a substitute to frequent tendering, it is recognized that it is often
advantageous on commercial as well as technical grounds to finalize
orders on Rate Contract basis for items / jobs which are procured /
executed either regularly or repetitively and for items of proprietary
nature. The rate contract is finalised where the total annual
requirement of such items / quantum of such jobs is large but not
fixed. For entering into rate contracts / long term contracts, the
mode of tendering to be followed may be decided as per the nature
of the job item, the available sources, etc. Thus, rate contract
enquiries may be either by Open Tender / Limited Tender / Single
Tender depending upon the nature of item/job.
5.6.2 While issuing LTE for rate contract, it should be ensured that only
reliable and reputed manufacturers / suppliers / contractors of
proven ability are entertained.
5.6.3 For purchase cases, rate contracts may also be entered into for items
which are identified as of regular and repetitive consumption with the
consent of the indenter without waiting for the indent, in order to
ensure speedy processing. In such cases, complete and up-to-date
drawings / specifications of the items should be obtained before
calling for tenders. Orders in such Rate Contracts should, however,
be finalized only after receipt of relevant Indents.
5.7 PROCUREMENT ON GeM
Government e-Marketplace (GeM) may be utilized for procurement
of goods & services only and not for works contracts, but the items
to be used in works contracts may be procured through GeM, For
placement of Orders on GeM, delegation of powers (DOP) as
available for procurement of goods/ services through Open Tender
Enquiry (OTE) shall be used by plant/ unit.
5.7.1 Procurement of any Goods or Services on GeM portal shall be as per
SAIL Procedure for Procurement of Goods & Services on Govt. e-
Marketplace (SP- GeM: 2018) and the extant guidelines issued by
the Govt. of India.

Purchase/ Contract Procedure 2020 (PCP - 2020) Page 16/53

5.8 EMERGENCY PURCHASE / JOB CONTRACT
5.8.1 Provisions for emergency purchase / job contract have to be kept to
meet the emergency needs of the plants / units and it is essential to
delegate powers to meet such situations particularly in maintenance,
commissioning and break down jobs so as to keep the flow of
production/ services uninterrupted. In case of purchase, such
emergency normally occurs when there is inadequate or no stock in
the Stores and chances of getting supplies against pending orders
within the stipulated time schedule are remote. Similarly, in case of
job contracts, such emergency occurs when breakdown of equipment
occurs and internal resources are not adequate to take timely action
or there is likelihood of discontinuation of Services, which are
required on continuous basis.
5.8.2 Due to the very nature of the requirements, which has to be met in the
shortest possible time, the normal process of tendering stipulated in
this procedure cannot be followed. For emergency Indents, the mode
of tendering and method of placement of order may, therefore, be
adopted as per the specific requirements of the case and the time
available for the placement of order and getting materials / execution
of jobs. Approval of the Competent Authority shall be obtained for the
specific mode of purchase / award of contract and order finalised.
Provisional order at the rate to be finalized later on / spot quotations
and placement of order on Single Tender basis may be adopted in
such situations.
5.8.3 Emergency Indents should be accompanied by non-availability &
criticality certificates issued by the concerned HOD on prescribed
format (to be designed by each plant / unit).
5.8.4 The materials may be procured from best possible source and jobs
be awarded to the reliable Contractor for such emergency
procurement / job contract respectively. Formal purchase orders
should be issued / contracts entered into, in due course for
regularizing the emergent action taken.
5.9 SAIL plants may participate in tenders / auctions conducted by other
companies for purchase of products. This will be done as per the
extant Policy for Participation in Tenders / Auctions issued by
CMMG.
6.0 INVITATION TO TENDER
6.1 For purchases, in case the technical / commercial terms are firm /
frozen, single part quotation may be invited only against Limited
Tenders by suitably selecting the vendors as explained under Para

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 5.3. However, for Open Tender as explained in Para 5.2, even for the
firm technical / commercial terms, 2 / 3 part quotations should be
invited. In cases where technical / commercial terms are to be
negotiated, 2 / 3 part quotations should be invited even against
Limited Tenders.
6.2 In cases of job contract, generally the technical / commercial terms
need to be negotiated. Therefore, for all such job contracts, 2 / 3
part quotation, should be invited against both Limited Tenders and
Open Tenders.
6.3 Before issue of NIT, MM Dept. / Contract Cell/ Contracting
Department should ensure that desired information, particularly
specifications / commercial terms are available in the case file.
6.4 Before inviting open tenders, MM Dept. / Contract Cell/ Contracting
Department shall determine / record the criteria for eligibility of the
tenderers, which may include:
a) required experience and past performance in similar type of supply /
contracts,
b) required manpower (skill-wise) and type/capacities of equipment &
construction/ manufacturing facilities,
c) proof of ownership / licensee of required equipment and construction /
manufacturing facilities,
d) financial position,
e) service support, if any,
f) earnest money / security deposit as per Clause No. 8.3
g) any other criteria, considered necessary. The above criteria shall be
specified in the Tender Document under special terms & conditions.
6.5 The MM Dept. / Contract Cell / Contracting Department shall also
examine / determine / record (as per applicability) the relevant
factors in addition to the price to be considered in Tender
Evaluation; and the manner in which they will be applied for the
purpose of determining the lowest evaluated tender. These
factors, other than the price, to be used for determining the lowest
determinable tenderer shall, to the extent practicable, be
expressed in monetary terms or given relative weightage in the
evaluation provisions in the Tender Document. The QCBS
(Quality & Cost Based Selection) / Life Cycle Cost may be
adopted as the mode of evaluation on case to case basis. No
factors other than those specified in the Tender Document shall
be used in the evaluation of offers at the time of preparing the
Comparative Statement.
This shall also form part of the Tender Document under special
terms & conditions.

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6.6 MM Dept./ Contract Cell/ Contracting Department should also
determine and record whether the quotations are to be invited on
firm prices or are subject to escalation / de-escalation with respect to
major cost component of the items / jobs. In case the quotations are
to be invited with prices subject to escalation / de-escalation, the
method to be used for determining the escalation / de-escalation
and the base date for calculating the escalation / de-escalation shall
be clearly defined and referred in the Tender Document under
special terms & conditions.
6.7 For purchases, clause for the submission of sample along with
quotation be incorporated in, the tender papers, if submission of
sample was specifically asked for in the Indent (Para 2.1.5 be read
along with this Para).
6.8 In case of medicines, chemicals and other items having limited shelf
life, the left over shelf life of each item at the time of delivery should be
at least 80%. In emergency, the left over shelf life equal to 120% of
the consumption period of such items may be accepted with the
approval of the Competent Authority.
6.9 In case of Open / Global tenders, other than for capital schemes,
the tender should specify that to bring the prices of the foreign
suppliers and the Indian suppliers at par, the RBI reference rate
should be considered for exchange rate conversion and the
'forward Premium rate' for the period of delivery and for staggered
delivery the average of all the periods of delivery, will be added to
the conversion rate for converting the price into INR for the purpose
of evaluation. The RBI reference rate to be considered for
exchange rate conversion and Forward Premium rate should be
taken on the last date of bid submission. The RBI reference rate is
available on the website of RBI http://www.rbi.org.in/home.aspx
and the Forward Premium is to be taken from Reuters or similar
other screen/ information channels available in the Corporate
Finance/ Finance Dept. of Plants.
6.10 In case the ordered quantity of the purchase indent or jobs of the
Job Contract are required to be split into more than one party at the
time of placement of order, the same will be specified under special
terms and conditions of the tender document. It should be clearly
mentioned in the tender document that the distribution of order will
be in the ascending order as per the quoted price ranking of the
tenderers, i.e., L-1 tenderer will get the highest share and the last
ranked tenderer within which the total order is to be distributed, will

Purchase/ Contract Procedure 2020 (PCP - 2020) Page 19/53

 get the smallest share. However, before opening of the price bids,
specific number of parties among whom order would be split would
be decided and approval of Competent Authority would be obtained.
Order shall not be placed on more than these numbers of parties,
except in the case mentioned at 10.2.1 and purchase preference in
case of MSEs.
6.11 In the Tender document under general terms and conditions, it
should be clearly specified that order on one or more than one
parties will be placed on the basis of L-1 quotation and, if required,
negotiations will be held with L-1 tenderer only. However, all the
tenderers may be required to explain / justify the basis of their
quoted price as and when asked for. In case, any tenderer fails to
justify his quoted price or refuses to cooperate in this regard, they
will not be considered for participating in the re-tendering if order /
contract is not finalised from the present tender.
6.12 For job contract cases, there should be a stipulation in the tender
documents under general terms and conditions that if a tenderer
quotes unworkable rates i.e. if the quoted price is less than the lower
limit of the estimated price (Ref. Para 10.1) and is considered for
placement of order, the party will be asked to justify the rate quoted
and will be required to give Performance Guarantee Bond (PGB) (in
addition to the Security Deposit) in the form of Bank Draft/ Bank
Guarantee if the justification given by the bidder regarding rates has
not been accepted or has been refused (Clause 10.4). The amount
of PGB to be decided by SAIL / Plant (name of the Plant) at the time
of placement of order and methodology for seeking PGB to be
indicated in the tender document. Earnest Money of the tenderers
who refuse to give PGB will be forfeited and they will not be
considered in re-tendering if order / contract is not finalised from the
present tender.
6.13 If items under purchase are the matching / complimentary parts and
required to be supplied by single party or items of work in the job
contract to be performed by single contractor, it should be clearly
specified in the tender document that total price of all such items /
items of work shall be evaluated for determining the reasonableness
of the price.
6.14 CONSIDERATION OF AGENTS
Wherever, foreign company / supplier participate in the tender,
purchases should preferably be made directly from the suppliers /
manufacturers. However, either the agent on behalf of the Principal /
OEM or the Principal / OEM directly be permitted to bid in a tender,

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 but not both. If agents / dealers / stockists of foreign companies
quote along with manufacturer, only the offer of Principal / OEM will
be considered as valid. One agent cannot represent two suppliers /
Principal / OEM or quote on their behalf in a particular tender.
6.15 INTEGRITY PACT
For all tenders / Contracts / Long term Agreements (LTAs) valuing `
20 Crores & above and all tenders related to Handling Contracts for
Departmental warehouses of CMO and L&I, the tenderer(s) /
bidder(s) / contractor(s) has to enter into an “Integrity Pact” with
SAIL. A copy of the Integrity Pact typed on plain paper duly signed
by the tender issuing officer who is the Authorized Signatory on
behalf of SAIL, has to be enclosed with the tender / bid / LTA
document. In case of uploading the tender in the website, Integrity
Pact also has to be necessarily uploaded after scanning the signed
copy of the pact.
Non-signing of the Integrity Pact will disqualify the offer/ bid.
However, bidders may be given an opportunity to sign the Integrity
Pact before rejection of the bid.
Following instructions along with the names of IEMs shall be
included in the tender / bid / LTA / Contract documents valuing ` 20
Crores & above and all tenders related to Handling Contracts for
Departmental Warehouses of CMO and L&I.
(a) The Bidder(s) / Contractor (s) is required to enter into an “Integrity
Pact” with the Principal i.e. SAIL. The Integrity Pact has to be signed
by the Proprietor / Owner / Partner / Director or by their duly
Authorised Signatory. In case of failure to return the Integrity Pact
along with the offer / bid, duly signed by the authority as mentioned
above, will disqualify the offer / bid.
(b) In the tender documents it should be specified that the Bidder(s)/
Contractor(s), if aggrieved, may raise complaints / pass on information,
if any, to the Competent Authority / Operating Authority of the
Tender/ Contract.
For effective implementation of Integrity Pact, Independent External
Monitors (IEMs) have been appointed. Any Bidder / Contractor, if
aggrieved with the tendering process may also approach the IEMs
through IP Secretariat (e-mail: [email protected];
th
[email protected]), 16 Floor, Scope Minar, Laxmi Nagar
District Centre, Delhi – 110092.
6.16 TENDER DOCUMENTS
6.16.1 Format for quoting prices, wherever applicable, may preferably be
provided with NIT.

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6.16.2 Invitation to the tender, including instructions to tenderers, should
be issued in prescribed proforma (to be designed by each Plant/
Unit category-wise). The invitation to tender should include general
terms and conditions of contract of SAIL plants / units, as
applicable to the case, i.e.,(i) for purchases only, (ii) for job/ service
contracts only including conversion, handling, hiring etc. (iii)
contracts governing supply and supervision of Plant, Machinery
and Equipment (for non-turnkey contracts) and (iv) contracts for
supply and erection (for turnkey contracts). The tender documents
should include detailed specifications and wherever applicable the
Standards for specifications and drawings, etc.
6.16.3 The special terms & conditions applicable to supplies / contracts
such as stipulations made under Paras 6.4 to 6.15 along with
conditions for inspection, testing, acceptance and performance
guarantee should be clearly defined and made part of the tender
documents.
6.17 METHODS FOR CALLING TENDERS
6.17.1 The following methods for calling of tenders shall be adopted:
i) Single Part Tendering,
ii) Two Part / Three Part Tendering
The tenderers shall be instructed to enclose each part in a separate
sealed cover, clearly inscribing on the top of each envelope the
relevant part number and description along with tender reference
number and date of opening and submit all the parts
simultaneously in a bigger sealed cover clearly inscribing on the top
of the cover the tender reference no. and the date of opening.
6.17.2 Single part tendering should be adopted only when all technical and
commercial terms are well defined / stipulated in the tender
document and are not negotiable.
Conditional bids, i.e., bids not adhering to the tendered technical
terms, will be rejected. However deviation in commercial terms can
be accepted and evaluated where suitable loading has been pre-
determined and mentioned in the tender document.
6.17.3 In case the technical specifications and or commercial terms are
not firm / deterministic / frozen, 2 / 3 part quotations shall be
invited.
a) Two part tendering involves calling for tenders in two parts:
i) Part I: Tender comprising techno-commercial offer, which shall
be covering all terms except the price.

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 ii) Part II: Tender comprising the price bid only.
b) Three part tendering involves calling for tenders in three parts:
i) Part I: Tender comprising Earnest Money.
ii) Part II: Tender comprising Integrity Pact and techno-
commercial offer, covering all terms except prices.
iii) Part III: Tender comprising the price bid only.
6.17.4 The price bids shall be opened (physically or Online) / price-
discovery shall be done only after all the Techno-Commercial
terms are settled and samples if applicable, are approved.
6.17.5 The time period should depend on the nature of the items to be
procured, the nature of work involved in the contract, delivery /
completion period etc. The following are the indicative time
periods to be given for submission of quotation by the tenderers,
from the date of tender notice:
i. Open Tender : Upto 4 weeks
ii. Global Tender: Upto 6 weeks
iii. LTE (indigenous): Upto 3 weeks
iv. LTE (imports) : Upto 6 weeks
6.18 EXPRESSION OF INTEREST
Expression of Interest may be adopted in the following cases where
in the first instance it is not possible to proceed with tendering. No
Indent may be required for issuing an EOI.
(i) Cases where new technology is involved and details are not fully known.
(ii) Where the tender specifications / commercial terms are required to be
finalized in consultation with the prospective bidders by calling bidder ‟s
conference after receipt of the prequalification bid. During the
technical discussions other stake holders who can add value to the
decision making on technical aspects and evaluation criteria may also be
involved.
(iii) When prospective bidders are not known and have to be identified.
Based on the response received in the EOI, tender document may be
prepared and processed accordingly.
th
CVC circular No.01/02/11 dated 11 February 2011 to be referred to.
6.19 PRE-BID DISCUSSIONS/ CLARIFICATION MEETINGS
In all technically complex Projects cases or contract cases requiring
clarification, pre-bid discussions after floating of tender and before
submission of bids should be held. The date, time and place of pre-
bid discussions should be clearly mentioned in the tender document.
During pre-bid discussions all the queries of the potential bidders

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 must be properly clarified and recorded by Tender Committee.
If any change in the specification, terms and conditions in the
original tender is contemplated as a result of pre-bid discussions,
the same should be broad based and have the approval of the
Competent Authority. Accordingly, a corrigendum to the original
tender is to be issued and advertised on the SAIL Tender Website /
e-Procurement site (for Online Tendering).
Submission of bids shall be allowed only after pre-bid discussions or
after issue of corrigendum wherever necessary. The date after which
submission of bids shall be allowed should be mentioned in the
tender itself or in the corrigendum if such corrigendum is issued after
pre-bid discussions. The copy of corrigendum may also be sent to all
bidders who had participated in the pre-bid discussions. Sufficient
time (at least 2 weeks) may be given between pre-bid discussions
and submission of tenders.
6.20 CONSTITUTION OF TENDER COMMITTEE
6.20.1 For high value purchase orders / contracts costing ` 2 Crores and
above, the Tender Committee should be constituted with the
approval of the Competent Authority, at least seven days before
opening the tender so that the copy of offer after its opening can be
forwarded quickly to the concerned agency / members for scrutiny.
Tender Committee should have representatives from (i) Indenting
Department, (ii) MM/ Contract Cell/ Contracting Department, (iii)
Finance Department {Associate Finance, where other Finance
Officer(s) are not available}, (iv) Centralized Maintenance Agency or
any other representative as decided by the Competent Authority.
Tender Committee is to be constituted based on the estimated value
of the indent. The same Tender Committee should continue
irrespective of the L-1 price. However the ordering price is to be
approved by the Competent Authority as per DOP.
For purchase orders / contracts costing less than ` 2 Crores, the
scrutiny and recommendations should be in accordance with the
prevailing guidelines and as per DOP. Plants / Units can have
standard Tender Committee for cases below ` 2 Crores as a Policy.
6.20.2 The functions of the Tender Committee would be as under:
a) Tender Committee, if required, may constitute Technical Evaluation
Committees (TEC) & Commercial Evaluation Committees (CEC) and
also sub-committees, if required, in consultation with the TEC & CEC.
The TEC & CEC Committees shall function concurrently. If no TEC &
CEC has been constituted then function of TEC and CEC, as mentioned
below, is to be done by TC.

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 b) To monitor the progress made by the TEC & CEC and Consultants.
c) To examine the recommendations of TEC & CEC and Consultants.
d) To take decision to open the price bids (physical or online) or to conduct
RA, for determination of L-1 Bidder, after freezing the Technical &
Commercial conditions, provided the number of offers at this stage is
equal or more than X+2 or approval for opening less than X+2 exist. In
case of RA, TC to also decide the strategy of Reverse Auction (if price
Discovery through RA is already indicated in Tender Document).
e) To evaluate the price offers, conduct negotiation with L-1 tenderer, if
required, under exceptional situations after taking approval of
Competent Authority and shall put up the recommendations of order
placement to the Competent Authority after justifying the reasonability
of the price.
The Committee should complete the scrutiny and give the
recommendations to the Competent Authority within a period of three
months from the date of opening of the tender or one month from the
date of receipt of recommendations from the Technical &
Commercial Evaluation Committees.
6.20.3 The functions of the Technical Evaluation Committee (TEC) would be
as under:
a) To scrutinize the Technical part of the tender and the
recommendations of the consultants / Technical Evaluation Sub-
Committee, if any.
b) To conduct clarification meetings with the tenderers.
c) To evaluate the performance of on-going work / contract, if any in SAIL
including Subsidiaries.
d) To give the recommendations to the Tender Committee.
e) To assist the Tender Committee, if required.
The TEC should complete the scrutiny and submit the
recommendations to the Tender Committee within a period of two
months from the date of opening of the tender.
6.20.4 The functions of the Commercial Evaluation Committee (CEC) would
be as under:
a) To scrutinize the Commercial part of the tender and the
recommendations of the consultants or Commercial Evaluation Sub-
Committee, if any.
b) To conduct clarification meetings with the tenderers
c) To give the recommendations to the Tender Committee.
d) To assist the Tender Committee, if required.
The CEC should complete the scrutiny and submit the

Purchase/ Contract Procedure 2020 (PCP - 2020) Page 25/53

 recommendations to the Tender Committee within a period of two
months from the date of opening of the tender.
6.21 The HOMM of plants / units shall decide the requirement of
Performance Bank Guarantee in Purchase cases, if required, and
the same shall be indicated in the NIT.
7.0 RECEIPT AND OPENING OF OFFERS
7.1 The following shall be the recognized methods for receipt of tender:-
i. Tenders received by Post;
ii. Tenders received by Courier service;
iii. Tenders received through Tender Box. Location of the Tender Box is to
be indicated in the Tender Document;
iv. e-Platforms, i.e. EPS, SRM etc.
7.2 Tenders received by post shall be sorted out according to the date of
tender opening and be given to the concerned executives of MM
Dept. / Contract Cell/ Contracting Department.
7.3 FAX / verified e-mail quotations (only in cases of single part tenders)
may also be considered as valid quotations if mentioned in the RFQ
and if received till the last date / time of submission of tender and
indicate item-wise prices, specifications and delivery schedule.
However, EMD, wherever applicable, is to be submitted prior to the
opening of tender.
7.4 Except e-tenders, all tenders shall be opened centrally and jointly by
an officer each from MM Dept./ Contract Cell/ Contracting
Department and Finance Department. This provision shall not apply
to Single Tender Enquiries. The Plant / Unit shall fix the days in a
week and time for tender opening of different categories/ values.
7.4.1 The single part quotations of the tenderers on whom it has been
decided to place trial orders only, shall not be opened at this stage.
Such quotations shall be opened only after placement of orders on
regular offers. However, in case of 2 / 3 part quotations, the techno-
commercial parts of such tenderers will be opened for evaluation /
negotiations but the price bids will not be opened. The procedure for
placement of orders on trial basis is explained in Para 12.0.
7.5 The tender box/ e-tender shall be opened immediately after specified
closing time on the last day of submission of tender. The Tender Box
shall be opened in the presence of an executive of MM Dept. /
Contract Cell/ Contracting Department, in-charge of tender opening
for the day.
7.6 All tenders received by post / fax / e-mail / courier or through tender
box, shall be sorted out by the Administration Section / Tender

Purchase/ Contract Procedure 2020 (PCP - 2020) Page 26/53

 Opening Cell in the presence of the tender opening officers,
assigned for the purpose and put up for opening after listing in the
prescribed register.
7.7 For opening the tenders, a minimum of X+2 offers should have been
received ('X' is the number of supplier / contractor on whom order is
to be placed). The dealing executive will inform the Tender Opening
Cell, the minimum number of offers required in each case. In case of
2 / 3 part quotation, there should be minimum X+2 techno-
commercially acceptable offers in all cases provided that:
(a) In case of open / global tenders, if less than the specified (X +
2) numbers of offers are received; same can be processed (i.e.
offers can be opened) without going for re-tender / tender
opening date extension after taking approval of the authority
one stage higher than the authority competent to approve the
enquiry proposal or Chief Executive or alternatively TOD can be
extended or case can be retendered with the approval of
Competent Authority.
(b) In case of LTE, if less than specified X + 2 number of offers are
received in the first attempt, a second attempt may be made by
inclusion of new vendors or extension of due date if there is no
scope of adding new vendors. In case adequate number (X + 2)
of offers are not obtained even in response to the second
attempt, the offers received shall be processed after taking
approval of the authority, one stage higher than the authority
competent to approve the enquiry proposal. Where the
approving authority of Enquiry proposal is the Chief
Executive Officer of the Plant / Chief Executive of the Unit,
the approving authority for processing the case where offers
received are less than X + 2 shall also be the Chief Executive
Officer of plants / Chief Executive of units, who shall have full
powers to approve such proposals.
7.8 Offers received against Single Tender cases can be opened before
or after the tender opening date by the dealing executive of MM
Dept. / Contract Cell/ Contracting Department. Where the offer is
received after the tender opening date such offer will not be
considered as late / delayed offer in respect of STEs.
7.9 For the purpose of opening, physical tenders shall be classified into
following categories:
i. Regular tender: Received within the due time and date prescribed
in the tender notice issued by MM Dept. / Contract Cell/
Contracting Department against Limited Tender / Open Tender /
Global Tender.

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 ii. Late / delayed tender: Tenders received after the due date and
time of receipt prescribed in the tender notice issued by MM
Dept./ Contract Cell/ Contracting Department against Limited
Tender / Open Tender/ Global Tender.
iii. Unsolicited Tenders: Tenders submitted by firms to whom tender
enquiries were not issued or tender received from firms who have
neither purchased tender papers nor paid the tender fee for down-
loaded tenders, in case of advertised tenders
7.10 Regular tenders (Physical or online) shall be opened on the
appointed date and time of tender opening.
7.11 Delayed / Late Tenders will not be opened.
7.12 Unsolicited tender after opening will not be considered. However, in
case of LTE issued to registered manufacturers, a tender received
from the authorized dealer of the registered manufacturer along with
the authorisation letter of the manufacturer to whom the enquiry was
originally issued shall not be considered as unsolicited. Para 5.3.7
may also be referred
7.13 In the event of a 2 / 3 part tender received in only one part and not
meeting the requirement of separate sealed covers, the tender shall
not be considered.
7.14 Any modification to the original tender by the bidder on its own
excluding the changes made during pre-bid discussion or during
techno-commercial discussion, after due date of tender opening
shall also be treated as unsolicited and rejected.
7.15 Tenders not accompanied by requisite Earnest Money / Earnest
Money not received before opening of Tender in case of e-tender, where
Earnest Money is stipulated in the tender condition, shall be treated
as invalid.
7.16 Limited Tenders for indent value of ` 10 Lakhs and above, and
Open Tenders shall be opened in the presence of such tenderers
who might choose to be present at the time of opening. Signatures of
the authorised representatives of the firms present during tender
opening shall be obtained. The following information depending
upon the part of quotation opened, shall be given to the tenderers
present during the opening:
i. Names of all the tenderers.
ii. Details of items offered.
iii. Prices, including discount, if any, and other elements.
iv. Delivery period.

Purchase/ Contract Procedure 2020 (PCP - 2020) Page 28/53

 v. Terms of payment.
7.17.1In case a person represents more than one tenderer, while
witnessing the tender opening, it should be recorded in the file to
examine the possibility of cartel formation and remedial action.
7.18 Where tenders are issued in 2 / 3 parts, only the techno-commercial
bids (including that of trial parties) shall be opened on the tender
opening date. The price bid shall not be opened, till the receipt of
final technical / commercial recommendations from the Indenter /
Consultants / Evaluation Committee. In case of physical Price Bid,
the same shall be kept under lock and key, after signing on the
envelopes (where submitted in Physical form). In case, the quoted
techno- commercial bids are in conformity to that of the tender, the
price bids received shall be considered for opening. In case the
techno-commercial bids need to be discussed and clarified by the
tenderers, clarification meetings should be held with them in
accordance with clause number 9.2.3.
7.19 All the correspondence in respect of clarifications / confirmations,
whether it be technical or commercial shall be dealt through MM
Dept. / Contract Cell / Contracting Department only till the final
placement of order. Thereafter, while routine follow up shall be done
by the executing agency under intimation to the MM Dept. / Contract
Cell / Contracting Department, all the matters having financial /
commercial implications will still be dealt with by MM Dept. / Contract
Cell/ Contracting Department only.
7.20 Wherever tender has been invited in physical form, at the time of
tender opening, each page of the original quotation shall be signed
by the tender opening Executives with date. Alterations, over-writings
or corrections shall be initialed with date.
7.21 Wherever basic price or discount, etc., are indicated only in figures
and there is any over writing, such figures shall be mentioned in
words and duly signed by the tender opening executives.
7.22 Any columns left blank by the tenderers in their quotation shall be
crossed out by the tender opening officers and duly initialed.
7.23 Each original quotation must be numbered as Y / X where Y will be the
running serial number of the pages in the quotation, X will be the total
number of pages in the quotation received.
7.24 All the envelopes including the postal envelopes should also be
signed and kept in file.
7.25 The details of tenders received shall be recorded in the proforma
prescribed, duly signed by the tender opening officers.

Purchase/ Contract Procedure 2020 (PCP - 2020) Page 29/53

7.26 Information regarding receipt of earnest money wherever applicable,
or otherwise, shall be recorded.
7.27 Where for any reason the due date and / or time of opening the
tenders is extended, the concerned Executive shall intimate all the
firms to whom the tender papers had been sent irrespective of the
number of quotations already received, the revised tender opening
date and time.
7.28 Where party / parties request for extension in tender submission date
and / or time, the extension may be allowed with the approval of
Competent Authority for recorded reasons.
7.29 Where documents like work experience certificates, PAN Number
and partnership deed etc., are called for in tender evaluation, the
receipt of these shall be ensured and such documents shall be
considered by the Tender Committee as part of the total tender.
7.30 RETURN OF UNOPENED PRICE BIDS (FOR PHYSICAL PRICE
BIDS):
The unopened hard copies of price bids of the parties whose offers
have not been techno-commercially accepted and it has been
decided that price bids of such parties will not be opened, such
unopened price bids should be returned to the parties within 10 days
from the date of price bid opening. In addition to the price bids,
invalid, unsolicited and late offers are also to be returned back to
parties within 10 days of tender opening.
8.0 EARNEST MONEY (EM)
8.1 Earnest Money is aimed at protecting the organization against
irresponsible offers but should not be so high as to discourage
tenders. EMD should be taken in all cases of open tender and in
case of LTE wherever considered necessary. Non requirement of
EMD / reduced EMD*, if any, in open tender should be decided on
case to case basis by the Head of MM Dept. / Contract Cell of plants
/ units with the approval of Competent Authority. The amount of EMD
is to be specified in the tender document in terms of absolute value
as per the following indicative schedule.
*In case where the techno-commercially acceptable vendors are
frozen for an extended period of time and price bids are taken on a
periodic basis, EMD amount shall be based on the estimated value
of the particular price discovery cycle.

Purchase/ Contract Procedure 2020 (PCP - 2020) Page 30/53

 Tender value (`) Earnest Money (`)
Upto 1 lakh 1000
Above 1 lakh to 10 lakhs 5000
Above 10 lakhs to 50 lakhs 15000
Above 50 lakhs to 2 crore 1 lakhs
Above 2 crore to 10 crore 5 lakhs
Above 10 crore to 25 crore 10 lakhs
Above 25 crore to 50 crore 20 lakhs
Above 50 crore to 100 crore 35 lakhs
Above 100 crore to 250 crore 70 lakhs
Above 250 crore to 500 crore 150 lakhs
Above 500 crore to 1000 crore 300 lakhs
Above 1000 crore 500 lakhs

8.2 Micro & Small Enterprises (MSEs) / PSUs / Govt. Undertakings and
Co-operative Societies/ Start-ups as recognised by Department of
Industrial Policy & Promotion (DIPP) etc., may be exempted from
submission of EMD as per extant Government policy. For MSEs,
the exemption will be extended on the basis of self-certified copy of
Udyog Aadhar Memorandum (UAM) provided the concerned MSE is
also registered in the MSME databank and MSE is registered for
given scope of job/ procurement. SSI / NSIC certificate holders are
also exempted from submitting EMD and should submit a copy of
valid Entrepreneurs Memorandum, if available.
8.3 Acceptable Modes of EMD: Earnest Money may preferably be
submitted in the form of online transfer - NEFT, RTGS, SWIFT. The
proof of such transfer / transaction needs to be submitted with the
offer in the envelope titled Earnest Money Deposit. However, EMD
will also be accepted in the form of demand draft, pay order,
Banker's Cheque or Bank Guarantee (BG) from any Scheduled
Commercial Bank except Co-operative and Gramin Bank. The
tenderers should be asked to submit EMD in a separate envelope
and not to enclose the same with any part of the quotation. No
request for adjustment of earlier dues in place of EMD should be
entertained. EMD will not be accepted in cash.
8.3.1 For contract cases plants / units may give option to the registered
contractors for deposition of one time nonadjustable EMD to
be decided locally with the approval of Chief Executive Officer of
the Plant/ Chief Executive of the Unit. However, no interest shall be
payable on such deposits.

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8.3.2 For all types of Procurement (Purchase as well as Contract)
cases:
8.3.2.1 In place of EMD, Bidders may require to sign a Bid Securing
declaration accepting that if they withdraw or modify their Bids
during the period of validity, or if they are awarded the contract and
they fail to sign the contract, or to submit a performance security
before the deadline defined in the request for bids document, they
will be suspended for the period of one year from being eligible to
submit Bids for contracts. A format for Bid Security Declaration is
attached at Appendix – 1.
8.3.2.2 If EMD has been taken, the decision on the tender is delayed by
more than 30 Days from the last date of receiving the bids, the EMD
should be returned and declaration for Bid Security may be obtained
as depicted at Clause No. 8.3.2.1 above.
8.4 RETURN OF EARNEST MONEY
8.4.1 In the event the tender of any party is rejected during the
course of Techno- Commercial Scrutiny and Evaluation, the EM
should be returned to such tenderer within seven days from the
date of rejection of its offer.
8.4.2 In cases where number of sources are pre-decided in NIT as Single
Source, the EMD provided by the tenderers along with the tenders
should be returned to the unsuccessful tenderers within fifteen (15)
days from determination of L-1 tenderer.
In cases where number of sources are pre-decided in NIT as Multiple
Sources, the EMD provided by the tenderers along with the tenders
should be returned to the unsuccessful tenderers within fifteen (15)
days from the date of issue of LOA or Purchase Order, where LOA is
not required to be issued.
8.4.3 If EMD is not adjusted against Performance Guarantee / Security
Deposit as per terms & conditions of the tender, the EMD of the
successful bidder shall be returned within 15 (fifteen) days of
submission of Performance Guarantee / Security Deposit as per
contractual terms or 30 (thirty) days of successful completion of
contract, whichever occurs earlier.
9.0 SCRUTINY OF QUOTATIONS
9.1 SINGLE PART QUOTATIONS
9.1.1 In case of single part quotations (i.e., when the Technical /
Commercial terms are firm and not subjected to negotiations and
only LTE has been raised as explained under Para 6.1) the

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 quotations after opening and scrutiny about their completeness,
shall be forwarded to the Indenter wherever required or the Tender
Committee within two days from the date of opening by the MM
Dept. / Contract Cell / Contracting Department for recommendations
on specified forms after technical and commercial scrutiny.
9.1.2 The indenter will send to the MM Dept. / Contract Cell/ Contracting
Department its clear-cut recommendations, either for placement of
order / award of contract/ negotiation/ cancellation, within seven
days from the date of receipt of tender by the indenter, approval of
Competent Authority. Where the estimated prices and finally
assessed value based on actual prices is beyond the permissible
range of variation, the Indenter should specifically comment on
the basis of his estimation and the reasonableness of quoted
price.
In case the Tender Committee is to give the recommendations for
placement of order / award of contract/ negotiation/ cancellation on
receipt of quotations/ tenders, the Tender Committee will send its
recommendations for approval of the Competent Authority, for
placement of order / award of contract.
9.1.3 The parties who quote as per the tendered specifications /
commercial terms will not be rejected on the basis of incapability in
case of LTE since LTE is issued to proven registered parties only.
However, the quotations which do not conform to the tendered
specifications / commercial terms (including the conditional offers)
will be rejected.
9.1.4 No change in specifications shall be done at Tender Scrutiny stage.
In case of any change in specifications, re-tendering will have to be
resorted to.
9.2 2/3 PART QUOTATIONS
9.2.1 The techno-commercial bids after its opening as per Para 7.18,
shall be evaluated by the indenter/ Tender Committee and
wherever applicable, comments recommendations of the
consultants would be obtained. Indenter shall scrutinize the
technical part and MM dept./ Contract Cell/ Contracting
Department shall scrutinize the commercial part of the bids. A
comparative statement of techno-commercial scrutiny of all the
tenders shall be prepared by the indenter / Tender Committee, as
the case may be, and given along with its recommendations to the
MM Dept. / Contract Cell/ Contracting Department within seven
days of the receipt of the techno- commercial bids.

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9.2.2 The Technical & Commercial Evaluation Committees may discuss
the techno-commercial bids with the tenderers. After completion of
discussions and freezing the techno-commercial conditions, the
Technical & Commercial Evaluation Committees shall submit their
recommendations to the Tender Committee. After due deliberations,
the Tender Committee shall decide to open the valid price bids for
final evaluation of the tender including the price and submit its
recommendation for the approval of the Competent Authority for
placement of order / award of contract to the suitable tenderer or for
negotiation with L-1 tenderer giving proper justifications or for
cancellation of tender for recorded reasons.
9.2.3 During clarification meetings with the tenderers and clarifications /
confirmations / details being sought from the tenderers, the basic
features of the scope of supply / job, specifications and the technical
& commercial conditions stipulated in the tender specifications /
documents should not be changed. However, if details of the scope
of supply / job, work, specifications, techno-commercial terms and
conditions are not provided / described clearly in quotation, the same
should be sought from the tenderers during clarifications meetings.
After techno-commercial discussions & clarifications with the
tenderers and freezing of the techno-commercial specifications /
conditions, the tenderers should be advised to confirm the validity of
their price bids already submitted. In case, tenderers desire to
update their price bids citing reasons, it should be properly
deliberated by the tender committee and may be permitted only
under exceptional circumstances to be recorded in writing and with
the approval of the Competent Authority. However, in such cases,
all the techno- commercially acceptable tenderers may be
permitted to submit incremental / decremental / revised price bids
with respect to their original price bids by a fixed date and time. If
additional items have been included after techno-commercial
discussions, tenderers may be asked to submit a separate price bid
for the additional items only and price evaluation done accordingly.
The initial price bid and revised price bid / increment-decrement
shall be opened together.
9.2.4 In case where the techno-commercially acceptable vendors are
frozen for an extended period of time and subsequently price bids are
taken on a periodic basis, new vendors may be permitted to submit
their techno-commercial bids. For Limited Tender cases, the
credentials of the new party may be got verified before allowing
submission of the techno-commercial bid. In case of open tender,

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 such tenders should be kept alive in the website for such
procurement period. Bid of the new vendor can be evaluated and in
case the bid is found to be suitable the same shall considered for
price bid opening / reverse auction along with the regular panel of
suppliers in the subsequent price discovery cycle.
9.3 In case any specific adverse report is received against a tenderer, as
an information or upon enquiry made by SAIL, in respect of
capabilities and performance of the tenderer, after receipt of tender
but before the opening of the Price Bids, the quotation / tender
submitted by such tenderer is liable to be rejected on the basis of
recorded reasons and with the approval of the Next Higher
Authority /Chief Executive Officer of the Plants/ Chief Executive of
the Units. If such report is received after opening of the price bids,
then also the quotation / tender of that tenderer is liable to be
rejected after recording the reasons and with the approval of the
Next Higher Authority / Chief Executive Officer of the Plants/ Chief
Executive of the Units"
9.4 OPENING OF PRICE BIDS
9.4.1 After completion of the techno-commercial scrutiny, as explained in
Para 9.1 and Para 9.2, the price bids shall be opened and evaluated.
Prior to price bid opening, if approval for opening of less than X+2
offers has already been taken at techno-commercial bid opening
stage and no further rejection of offers has taken place after techno-
commercial evaluation, no further approval is required for price bid
opening from the Competent Authority {as defined in 7.7(a)}.
However, in case some offers are rejected during techno-
commercial stage, then approval of Competent Authority {as
defined in 7.7(a)} is to be taken again for opening the price bid.
If X+2 or more number of offers were available at the techno-
commercial bid opening stage and there are less than X+2 offers for
price bid opening, prior approval of authority one stage higher than
the authority competent to approve the enquiry proposal or Chief
Executive shall be taken.
9.5 COMPARATIVE STATEMENT OF PRICE BIDS
9.5.1 The Comparative Statement shall indicate the item wise prices,
rebates (if any) taxes, duties, packing & forwarding charges, freight &
insurance, etc., as applicable for all the accepted tenderers. The
factors and the method of their application, which have been
prescribed in the tender documents (Ref. Para 6.5) will be used while
working the overall price in the Comparative Statement. If any
additional factor has emerged during techno-commercial

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 clarifications meetings, to be adopted for evaluation of the tenders,
then in that case an opportunity should be given to all the tenderers to
confirm such an additional factor to be considered for evaluation of
tenders.
9.5.2 To arrive at a comparable landed cost at the Plant, relevant IPSS for
tender evaluation for stores & spares shall be followed.
9.5.3 The evaluated prices as per Paras 9.5.1 to 9.5.2 worked out in the
comparative statement for different tenderers will be ranked as L-1,
L-2, L-3.....L-1 being the lowest. The estimated price, as per the
indent and its percentage variation from the total quoted price
worked out as per comparative statement for each tenderer, will also
be recorded in the comparative statement.
9.5.4 The evaluated price of the L-1 tenderer should be compared with
the estimate and the reasonability of the offered price may be
examined by the Tender Committee / Committee comprising the
representatives of Purchase, Indenter and Finance. The committee
may seek advice of the agency who has prepared the estimates on
the reasonability of the estimates.
9.5.5 If some or all the items in the tender are parts of the same assembly /
sub-assembly or otherwise identified as matching / complimentary
parts by the indenter in the Indent (in case of job contracts if some or
all the items of work tendered are to be executed by one contractor
only) as explained in Paras 2.2.5 and 2.3.3, overall quoted price of
all such items/ jobs will be considered while preparing the
comparative statement.
9.5.6 For capital sanction / AMR cases, the technical evaluation shall be
done by the specified agencies / consultant and final
recommendations shall be forwarded to MM Dept. / Contract Cell/
Contracting Department.
10.0 PURCHASE / CONTRACT PROPOSAL
10.1 As a policy each plant / unit will fix the (+) range for purchase proposals
& (±) range for contract proposals for deviations in the estimated
price for acceptance of the total evaluated price of tenderers as
worked out in the Comparative Statement. This range may be
different for different types of Indents as well as for different values
of Indents. The approval of Chief Executive Officer of the Plant /
Chief Executive of the Unit shall be taken on such ranges of
deviation from the estimated price, which may be reviewed once in a
year.
10.2 In case order is to be placed on one party only and the L-l tenderer
is within the specified range of estimated price, proposal for

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 placement of order on L-l tenderer will be made and processed.
10.2.1 In case, none of the tenderer as indicated in Para 10.2, has offered
full quantity / scope of work, then after taking approval of NHA and
recording the reasons for not retendering the case, processing of
tender is to be done including opening of price bid. After
determination of L-1 tenderer, he may be asked to confirm full /
increased quantity / scope of work; and the quantity / scope of work
so confirmed shall be ordered on that party. This will be subject to
meeting satisfactory capacity / performance criteria. The balance
quantity / scope of work, if any, can be ordered as follows:
a. All the remaining technically and commercially acceptable
tenderers be asked to offer maximum quantity up to the
uncovered quantity / scope of work and match L-1 price. Offers
of such tenderers who match L-1 price may be accepted for the
quantity / scope of work offered by them in order of their rankings.
b. If the full quantity / scope of work is still not covered at L-l price after
step (a) above, the balance quantity / scope of work can either be
re-tendered or cancelled with the approval of the Competent
Authority as per DOP.
10.3 In case the order is to be placed on more than one tenderer as
specified in the Indent / Tender Document and the L-1 price is within
the approved limits of estimate, then the tenderers will be asked to
match their prices with L-1 rate for distribution of the items / jobs to
be ordered. Only the tenderers, who agree to match their prices with
L-1 rate, will be considered for the distribution of order as per their
original ranking.
10.3.1 For splitting the order quantity / scope of work among more than one
tenderer, the basis will be their original rankings as per the
comparative statement. The allocation will be in the descending
order with L-1 getting the highest share. The distribution pattern for
splitting the order into 2 / 3 / 4 parties will be broadly as indicated
below:-

In case of distribution for Ratio for Original Ranking L-1 L-2 L-3 L-4 L-5
L-6 L-7 L-8
Two parties :70:30
Three parties :60:25:15
Four parties :50:25:15:10
Five parties :40:25:15:10:10
Six parties :35:20:15:10:10:10

Purchase/ Contract Procedure 2020 (PCP - 2020) Page 37/53

 Seven parties :30:20:10:10:10:10:10
Eight parties :25:15:10:10:10:10:10:10
However, capability, capacity and past performance will be kept in
view for the allocation of quantity to multiple sources. In addition to
the above, in case more than one party has the same rank, then their
share will be added and equally distributed. For example, if
distribution is to be made among six parties and two parties have the
same ranking of L-2 i.e. the original rankings are L-1, L-2, L-2, L-3,
L-4, L-5, then from the above table, the distribution shall be

L-1 35%
L-2 17.5% i.e. 20+15 = 17.5%
L-2 17.5% 2
L-3 10%
L-4 10%
L-5 10%

Similarly, if three parties have the same ranking, viz. L-1, L-1, L-1,
L-2, L-3, L-4, then the distribution shall be:-

L-1 23.33%
L-1 23.33% i.e. 35+20+15 = 23.33%
L-1 23.33% 3
L-2 10%
L-3 10%
L-4 10%
However, in case of tie among the same ranking parties i.e. in a
situation where ranking is L-1, L-1, L-2, L-3, L-3, L-3, L-4, and only
four parties are to be considered for placement of order, the
distribution shall be

L-1 37.5% i.e. 50+25 = 37.5%

L-1 37.5% 2
L-2 15%
L-3 10%
L-3 10% and only one party among the three L-3 parties to be
selected through draw of lot in the presence of their representatives.

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10.3.2 In case more than one tenderer is qualifying as L-1, after
price evaluation and the order is not to be split, the placement of order
shall be done after obtaining reduced revised price bid from the L-1
tenderers and if still there is a tie among L-1 tenderers then to
discover the final L-1, draw of lots shall be held in presence of the
tenderers who chose to be present.
10.4 For job contract cases, if tenderer quotes unworkable rate i.e. the L-1
price is not reasonable (less than the lower limit of the estimated
price) as compared to the estimated price(refer Para 6.12), the
tenderer (including all other tenderers under split order which match
with L-1 price or prices considered for placement of order are less
than the lower range of estimated price), will be asked to justify the
rates quoted. On non- acceptance of justification / refusal of the
same, the tenderer will be asked to furnish Performance Guarantee
Bond equal to the amount which will be the difference between
lower limit of estimated price and the quoted price of tenderers. In
case the tenderers refuse to comply with this, action will be taken as
per Para 6.12 with the approval of the Next Higher Authority / Chief
Executive Officer of the Plants / Chief Executive of the Units on
submission of recorded reasons.
In case the L-1 tenderer is able to justify his rate, and found to
be workable by the tender committee, or credentials of the
party are established, then Performance Guarantee Bond may be
waived with the approval of Next Higher Authority / Chief Executive
Officer of the plants / Chief Executive of the units.
The Performance Guarantee Bond, wherever required, should be
taken in the form of Bank Draft / Bank Guarantee from any scheduled
commercial bank except Co-Operative & Gramin Bank only. In case
the contractor has any outstanding amount with the company against
a different tender, the same should not be adjusted for this purpose.
10.5 Wherever voluntary reduction in prices is received after opening of
the price bid and / or after the expiry of time limit fixed for re-bids, such
reduction in price will not be taken into account for the purpose of
evaluation and ranking for placement of order, while making the
purchase / contract proposal. Appropriate recording shall be made in
the file to this effect.
10.6 Where the voluntary reduction in price is given by a tenderer, who is
otherwise eligible to get order on the basis of bids received before the
scheduled date and time, the order would be placed at a price taking
into account the voluntary reduction offered by the party.

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10.7 Any purchase preference to MSEs/ Local MSEs/ Ancillary Units/
PSUs/ Govt. Organisations/ Startups as recognised by
Department of Industrial Policy & Promotion (DIPP) shall be
based on the extant guidelines issued by Govt. of India.
Additionally, “Minimum Local Content (LC)” as described in the
Public Procurement (Preference to Make in India) Order 2017
(Revised on 29.05.2019) and subsequently amendments, if any,
shall be applicable.
10.8 The proposal for purchase preference to PSUs / Government
organisations shall be based on the extant guidelines issued by the
Government of India.
10.9 Besides giving preferential treatment to MSEs in terms of, exemption
of EMD and fee for tender document, purchase preference is also to
be given to MSEs as per extant guideline of Government of India.
11.0 PRICE NEGOTIATIONS
11.1 There should be no post tender negotiations with L-1 except in
certain exceptional situations. Such exceptional situations would
include, procurement of proprietary items, items with limited
source of supply and items where there is suspicion of a
cartel formation. The justification and details of such negotiations
should be duly recorded and documented without any loss of time.
The justification and details of such negotiations, wherever
feasible, should be maintained online.
11.2 Negotiations, if required, should be conducted with the L-1 bidder
only, with the approval of Competent Authority. Reasons must be
recorded by the authority/ Tender Committee/ Indenter
recommending negotiations. Negotiations should be held by the
Tender Committee / Committee consisting of executives from MM
Dept./ Contract Cell/ Contracting Department, Indenting Department,
Finance Department. The Committee must record reasons and
outcome of the negotiations.
11.3 Where quantities are to be distributed on multiple parties, the other
parties L-2, L-3, L-4… …need to match the L-1 prices. The matching
of prices, to avoid placement of order on differential price, shall not be
treated as counter offer or negotiation.
11.4 In case L-1 backs out, re-tendering should be resorted to in a
transparent and fair manner without considering the backed out
tenderer.
Besides forfeiting the EMD submitted by the said tenderer, the

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 tenderer shall be kept under hold without issue of tender enquiries up
to next one year including barring participation in open tenders with
the approval of concerned HoD.
11.5 For cases up to `20 lakh (`80 lakh for import cases), asking for
discount through correspondence shall also be permissible.
11.6 Order on more than one party shall be considered only if such
stipulation was made in the NIT as explained in Para 6.10.
11.7 During price negotiations, changes in the already decided techno-
commercial terms shall not be allowed and no increase in price is
permitted.
11.8 The negotiations and decision for placement of order must be
completed within the validity period of the offers. Wherever
necessary, the extension of validity period by the parties concerned
should be ensured.
12.0 TRIAL PURCHASE / WORK ORDER
12.1 The total quantity to be ordered on trial basis shall be determined
and approved at the time of issue of tender. Tender enquiry for trial
order may be issued only with the approval of Head of MM /
Contract Cell/ Contracting Department subject to approval of
Competent Authority as per DOP.
12.2 After evaluation / negotiation of techno-commercial bids as
explained in Paras 9.2.1 and 9.2.2, technically suitable parties will
be selected for consideration for placement of trial order.
12.3 The price bids of the above mentioned technically suitable trial
parties shall be opened and evaluated as explained in Para 9.4. The
evaluated price of trial parties will be ranked as TL1, TL2, TL3....
where TL1 is the lowest evaluated price.
12.4 If the evaluated TL1 price is less than or equal to the established L-1
rate (received against regular tender for the same item), then the
trial order for the approved quantity will be placed.
12.5 In case trial order is to be distributed among more than one trial
parties, the other trial parties will be asked to match their prices with
TL1 and then the trial quantity will be distributed as per table given
in Para 10.3.1. However each party should be given the minimum
trial quantity and in case this necessitates increase in trial quantity
the same may be considered.
No risk purchase action shall be taken in trial cases.
Detailed trial procedure may be formulated by the individual plants /
units.

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12.6 If TL1 price is more than the established L-1 rate, the trial parties in
order of their ranking who accept L-1 rate will be considered for,
placement of trial order as per Paras 12.4 and 12.5.
13.0 ISSUE OF ORDER FOR PURCHASE / JOB CONTRACT
13.1 The Order shall be placed in the standard proforma (designed by
respective plants / units) after obtaining approval of the Competent
Authority as per DOP. The order shall be placed within the validity of
the offer.
13.2 The escalation / variation clause, where envisaged or insisted upon,
should be carefully drawn up to avoid disputes at a later stage and
does not give undue benefit to the suppliers / contractors. The basic
elements on which escalation is agreed upon constituting the price at
the time of placement of the order should be verified and their
authenticity confirmed and the escalation formula and the authentic
index to be relied upon for this purpose should be clearly laid down.
Base date for providing escalation / de-escalation should be properly
indicated in tender documents.
13.3 All orders should be self-contained and should have proper
stipulations like Payment Terms, Liquidated Damages and Risk
Purchase / Contract clauses, etc. to ensure timely supply of the
material / execution of jobs.
13.4 In case a party is selected to supply material / execute a job contract
at higher price against a subsequent tender, but whose supply of the
material / execution of job contract against the earlier order at lesser
price is not yet complete for reasons attributable to the supplier /
contractor, it will be ensured that the supplies are made / jobs
executed first against the earlier order before being considered
against the subsequent order.
13.5 The time for award of contract should not ordinarily exceed D+30
working days, where D is the date of determination of L-1 bidder.
For this, after examining the reasonability of the discovered L-1
price with proper justification, Purchase or Contract Proposal, as
the case may be, should be put up to the Competent Authority
within the following:
a) D+7 working days from the date of determination of L-1 bidder,
in normal situations, where no negotiation was required to be held.
b) D+21 working days from the date of determination of L-1
bidder, in exceptional situations where negotiation(s) with the L-1
bidder were also held.

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 For Project cases, wherever multi-stage approval from Higher
Authorities are required, over and above the D+30 working days as
above, an additional maximum of 15 days should be assigned for
clearance at each level or a maximum of total 60 days, whichever is
less.
13.6 Any order placed / work awarded on Single Tender / nomination basis
valuing ` 1 Crore & above shall be reported to SAIL Board on
quarterly basis. Plants / units to evolve their own system for such
reporting. Internal Audit is required to check at least 10% of such
cases.
13.7 POSTING OF POST CONTRACT DETAILS:
All post tender contract details above ` 5.0 lakhs should be posted
on SAIL Tender Website as well as CPP portal as per the extant
provisions / direction of the Govt. of India.
14.0 EXTENSION OF DELIVERY/ CONTRACT PERIOD AND
LIQUIDATED DAMAGES (LD)
14.1 Liquidated Damages shall be levied against suppliers / contractors in
case of delay in supply of materials / execution of contract beyond the
date of delivery / completion of job specified in Purchase Order /
Contract. If the delay in completion of supply / execution of job is
attributable to SAIL or force majeure only, liquidity damages will not
be levied.
14.2 Extension of delivery / pre-ponement of contract period may be
granted by the competent authority as per DOP.
14.3 For the portion of delay which is attributable to SAIL / Force Majeure or
to the supplier / contractor, the case shall be dealt with as follows:

A. Delay attributable to SAIL / Force Majeure

LD Not Applicable
Taxes & Any increase in taxes and duties on account of
Duties statutory increase, fresh imposition of any duty or
taxes which take place during such extended period
shall be admissible/ availed.
Price Price variation, if indicated in the Purchase Order /
Variation Contract, shall be applicable during such extended
period.

B. Delay is attributable supplier / contractor

LD Applicable

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 Taxes & Increase / fresh imposition of taxes and duties during
Duties the extended period will be to the account of the
party. However, the same will be admissible to the
extent for which Input Tax Credit (ITC) is admissible
against these levies. Any decrease in taxes and
duties during the extended period will be availed of.
Price Price variation, if indicated in the Purchase Order /
Variation Contract will be applicable for the quantity supplied /
work performed within the scheduled period of
Purchase Order / Contract. For supplies made / work
executed during the extended delivery period, the
rates as prevailing on the last day of the scheduled
delivery / contract period only may be paid with the
approval of the Next Higher Authority. De-escalations /
reductions, if any, which takes place, shall have to be
passed on to SAIL

14.3.1 For Project/ AMR cases, relevant clause of SBD may be referred to.
15.0 AMENDMENTS TO PURCHASE / CONTRACT ORDER
Amendments to the Purchase / Contract Order should be rare. In
exceptional cases, amendment may be issued for the recorded
reasons with the approval of Competent Authority as per DOP.
16.0 PAYMENT TERMS
16.1 Payments should be made strictly according to terms & conditions as
indicated in Purchase Order (PO) / Contract. Deviation, if any, in
payment terms should be approved by Competent Authority with the
concurrence of Head of Finance of respective Plant / Unit.
16.2 In case where delivery period has expired, documents sent through
Bank should be released only on approval of the Competent
Authority based on recorded reasons. Such approval should be
obtained within two working days. In the case of payments through
Bank, the Accounts Department after receipt of necessary advice
from the concerned Bank will make payment to the Bank as per the
terms of Purchase Order. In case the Accounts Department finds any
discrepancy and is not able to get the documents released within two
days, they will seek the instructions of MM Dept./ Contract Cell/
Contract Operating Department in writing and act accordingly. The
documents thus received should be handed over to the Stores
Department under intimation to the MM Dept.
16.3 Before release of final payment, the following should be ensured by
the Accounts Department except where 100% payment is made
through LC / Bank against dispatch documents or 100% against

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 proforma invoice.
i) The material both in quantity & quality and specification has been
duly received as stipulated in the Purchase Order and has been
taken on record by the Stores Department, evidenced by GARN
and / or other specified documents.
ii) The recoveries which are to be made from the party, have been
made.
16.4 Running Account bills if payable as per contract and submitted by the
contractors will be certified by the operating authority for the quality
and volume of work executed and recorded in the Measurement
Book. Bills of work executed by the contractor shall be jointly signed
by the Operating Authority or his authorized representative and the
contractor. These running bills will be sent to Finance for payment by
the Operating Authority under acknowledgment obtained from the
Finance Department.
16.5 To check fraudulent payment of bills, each Plant / Unit should prepare
elaborate system for inter-department forwarding / receipt /
acknowledgment of various documents. Proper system of
numbering the bills also be laid down to avoid duplicate payments.
16.6 The Accounts Department should immediately on receipt of a bill,
examine the availability of all supporting documents. In case of
discrepancies, the dealing officer within two days of the receipt of
the bill should refer the matter in writing to the MM Dept. /
Contract Cell/ Contract Operating Authority.
16.7 Bills completed in all respect received by Finance Department should
be paid on First In First Out (FIFO) basis.
16.8 For any bill complete in all respect, pending with Finance where
payment has been delayed beyond 30 days from due date, the
details along with reasons, should be displayed on intranet portal by
the Head of Finance of plants / units and a copy of the same should
be forwarded to the respective Vigilance Department and HOMM /
HoP (for Projects cases), on a monthly basis.
17.0 TAXES
17.1 Supplier must furnish/ upload the necessary documents for availing
of GST Input Tax Credit (ITC) as per GST Law. This shall be
ensured before releasing any payment to the Supplier after
verification of GSTR2A/ any other document/ form specified under
extant GST Law. However, for Micro & Small Enterprises (MSE),
payment shall be made within a statutorily defined period as per
extant GOI Rules.

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17.2 In case of supply of Goods & Services, GST number of both Buyer
and Seller should be mentioned in the contract.
18.0 CANCELLATION OF PURCHASE / CONTRACT AND RISK
PURCHASE
18.1 When it is intended to cancel the Purchase Order or Contract or
Work Order, which has been kept alive after expiry of delivery period
by the conduct of parties, it is necessary to issue a notice to the
concerned party before actual cancellation giving a period of fifteen
days or such period as Law Department may advise for supply of
material/ completion of pending job/ work without prejudice to our
rights to recover LD as per terms of the contract. Where the order is
not kept alive beyond delivery/contract period by implication or
conduct of the parties, cancellation should be issued by the MM
Dept. / Contract Cell/ Contracting Department immediately in
consultation with Indenting / User department, with the approval of
Next Higher Authority, after expiry of the delivery / completion
period stating that quantities/job incomplete on the due date are
cancelled and risk purchase will be made in terms of the relevant
clause of the tender conditions of the contract. However, before
initiating the process for placement of alternate order on risk
purchase or for cancellation of original order on the defaulting party,
approval of the next higher authority should be taken. Wherever
necessary, Law Department should be consulted to protect the
interests of the Plant / Company.
18.2 For job contract cases, notice for execution of order on risk & cost of
any contractor can be issued during valid period of contract also if
contractor either fails to start the work within reasonable time, the
progress of the job is poor or for any breach of contract.
18.3 For Risk Purchase action after issue of notice to the defaulting party a
tender enquiry will be issued excluding/ disallowing the defaulting
party for finalization of order on alternate source. Preferably the date
of tender opening of the alternative tender enquiry and the
expiry of risk purchase notice to the defaulting party should be
about the same time. Notice should be given to the defaulting party
with a view to providing it with last chance to effect supply / to
complete the work and as such its response should be taken into
account before deciding on the cancellation or alternate
procurement through risk purchase.
The decision to place order on alternate party / contractor on risk
purchase or cancellation of the original order should be taken after
consideration of the response of the defaulting party and the receipt

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 of the offers against the enquiry.
18.4 After expiry of notice period and on finalization of the alternate
purchase order / contract the left-over / un-serviced quantity in the
original purchase order / contract should be cancelled and new order
should be placed..
18.5 The Risk PO / WO should as far as possible be on the same terms &
conditions as the original PO / WO (apart from delivery time), i.e., the
goods should be of the same specifications, etc.
18.6 It should be ensured that Risk PO / WO is concluded within a
reasonable time.
18.7 For details of actions to be taken, the Standard Risk Purchase
Procedure published by CMMG may be referred to.
19.0 VENDOR DEVELOPMENT
19.1 It shall be the continuous endeavor on the part of all plants / units to
find out and / or develop substitutes / sources of supply with a view
to reduce cost of input materials / services. Consideration should be
given to save foreign exchange.
19.2 To achieve this objective, Chief Executive Officer of each Plant /
Chief Executive of each Unit shall constitute a Vendor Development
Cell (VDC) under HOMM which will co-ordinate and monitor all
related activities
19.3 The need to develop a Vendor for an item / services shall be identified
by MM Dept. / concerned shop and shall be approved by concerned
HOD. The requisition for such items shall be made by concerned
department / MM Dept. with the approval of the Competent Authority
and shall contain :
a) The existing practices/ material / technology and their
shortcomings.
b) The proposed practice/ material / technology and the
anticipated cost-benefit analysis.
c) Minimum quantity for conducting trial.
d) Minimum period for conducting trial
19.4 Such proposals may be scrutinised by a Committee comprised for
this purpose under HOMM. One month before the beginning of each
financial year, the Committee shall identify the items and in
consultation with VDC and the annual budget for the same would be
got approved from the Chief Executive.
19.5 Before issuance of tender enquiry, the replacement specifications,
functional requirements, input conditions, performance norms,
relevant drawings, inspection procedures, method of conducting

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 trials and outputs, etc., are to be worked out and finalised by the
indenter/ concerned department in consultation with Design
Department, R&D, other technical Consultant Departments
including CET or RDCIS or any other consultant. The proposal shall
also indicate the stage and final inspection criteria, procedures and
methods of conducting trial.
19.6 Final acceptance of the item developed shall be done after field trial.
The trial should be completed within the stipulated period from the
date of receipt of material.
19.7 Evaluation of Performance: The trial shall be monitored by a
Committee constituted for the purpose by the concerned Direct
Reporting Officer (DRO) to the Chief Executive Officer of the Plant /
Chief Executive of the Unit.
19.8 The firms who successfully develop an item shall be encouraged with
the placement of repeat order as per Para 5.5 and such firms are then
to be dealt with under the relevant IPSS for the future.
19.9 In case IPSS are prepared and issued on Vendor Development, the
procedure laid down therein would be followed.
20.0 CLOSURE OF CONTRACT
20.1 All contracts where jobs have been completed in all respects
including period of warranty / guarantee after its completion /
commissioning, final acceptance certificate should be issued within
one month thereafter.
20.2 Operating Authority shall process the final bill of the contractor as per
the check-list to be designed by each plants / units for closure of the
contract for submission to the Finance Department, along with the
final acceptance certificate.
20.3 The final bill of the party shall be checked and passed by Finance
Department and shall be released to the contractor as per laid down
procedure to be developed by plants / units.
21.0 PRICE DISCOVERY THROUGH REVERSE AUCTION (RA)
Standard Procedure for Reverse Auction (RA) issued by CMMG
and amendments made thereto, if any, shall be followed.
22.0 BANNING OF SUPPLIERS / CONTRACTORS
In case of default, bad performance, fraud, deception and
misconduct, etc. by any supplier / contractor / vendor, action may be
taken as per the instructions issued by SAIL from time to time w.r.t
“Guidelines on Banning of Business Dealings”.
Summary details of banned suppliers / contractors with reasons and
period of banning shall be uploaded by the respective plant / unit on

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 SAIL Tender Website.
23.0 PROCEDURE FOR SMALLVALUE PURCHASES
23.1 SCOPE
a . This procedure shall apply to indents of low value (`15,000/- to
`4,00,000/-). For indent value less than ` 15,000/-,
procurement through imprest (upto ` 15,000/-) or by any other
mode like GeM (Direct Purchase on GeM) may be done, if
possible.
b. The same item shall not be procured more than twice in a year
by an Individual Department and its cumulative value should
not exceed ` 4,00,000/- per year for a Department.
c. Items valued as above, may be clubbed into one indent having
the same set of Vendors. However, the total Indent Value
should not exceed ` 4,00,000/-.
d. Emergency purchase shall not be covered under this procedure.
e. For procurement of new items, necessary approval shall be
taken as per DOP of the plants / units.
23.2 PROCEDURAL STEPS
23.2.1 Raising of Indent
a) Indents up to value of `4,00,000/- covering the annual
requirement and including proprietary items need not be
scrutinized by the screening committee under this Procedure.
Indents shall be cleared by Head of Indenting Departments for
further processing by the MM Dept/ Contracting Department.
b) The same items shall not be procured more than twice in a
year by an Individual Department and its cumulative value
should not exceed ` 4,00,000/- per year for a Department. A
certificate for the same shall be given by the HOD of the
Indenting Department.
c) Indents are to be raised based on availability of items in stores,
dues-in, safety stock level and consumption pattern of the
Department within the allocated Budget.
d) Re-appropriation of the Budget allocated to a particular
Department for procurement of small value items shall not be
done.
23.2.2 Estimate Value
Estimate should be realistic with adjustment for variations in the
prices of various elements including market conditions.
23.2.3 Issue of Tender Enquiry
a) LTE shall be sent to minimum 3 vendors. All registered vendors

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 should be included. In case a large number of vendors are
registered then rotation as per Para 5.3.4 may be considered. It
should include the last supplier unless there is a satisfactory
recorded reason to exclude them on performance basis. This
shall be approved as per normal DOP. Dealers / Traders having
required GST Registration can also be considered.
b) Tender Enquiry should mention that the following shall apply and
no deviation would be accepted:
i. Specifications must be accepted by the Tenderer. Offers not
conforming to tendered specifications shall be summarily
rejected.
ii. Prices must remain firm during currency of the contract.
iii. To the extent possible, materials are to be dispatched in
one consignment.
iv. Orders shall be placed on single source.
c) In case of LTE to 2 firms, clearance of concerned HOD of the
Indenting Department for Indent and approval of next higher
authority as per DOP in MM for issue of enquiry is to be
obtained.
d) Indents for single tender (non-proprietary) will be cleared by
Head of Works / MM / Project / Medical / Finance in their
respective areas and approval for issue of enquiry shall be
obtained from HOMM.
23.2.4 Opening of offers
Wherever less than X+2 offers are received, the case shall be
processed with approval of next higher authority.
23.2.5 Placement of Order
a. In case of procurement of multiple items in an Indent, the overall
lot L-1 Landed Cost Net of Input Tax Credit (LCNITC) shall be
considered for placement of order even if the items are non-
matching.
b. In case L-1 Price exceeds approved range of % deviations, the
same, if required, be considered with approval of next higher
authority than the original approving authority as per DOP of MM,
provided the prices are considered reasonable as per the
prevailing market trend.
c. In case L-1 offer is not considered reasonable, MM Department
may correspond directly with the party to bring it in approved
range with the approval of Next Higher Authority In case the
prices still remain outside approved range of % deviation the

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 same may be considered for placement of order with the
approval of Next Higher Authority, if prices are considered
reasonable as per prevailing market trend, failing which re-
tendering may be resorted to with the approval of Next Higher
Authority.
d. If L-1 firm backs out at any stage, the case may be reprocessed.
e. To the extent possible, supply against the orders under this
procedure should be completed in one lot within the scheduled
delivery period.
23.3 Pre-dispatch inspection shall not be applicable unless otherwise
specified & materials shall be accepted against TC / GC / W C.
24.0 PROCEDURE FOR SMALL VALUE JOB / SERVICE CONTRACTS
24.1 SCOPE
a. This procedure shall apply only to indents of low value (`15,000/-
to ` 4,00,000/-) services / job contracts. For indent value less
than ` 15,000/-, procurement through imprest or by any other
mode like GeM (Direct Purchase on GeM) may be done, if
possible.
b. The same job / service will not be contracted out more than
twice a year by an individual department and its cumulative
value should not exceed ` 4,00,000/- per year for a
department. A certificate to this effect shall be given by the
Head of the Indenting Department.
c. Emergency job / service contracts shall not be covered under this
procedure.
24.2 PROCEDURAL STEPS
24.2.1 Raising of Indents
a. Indents shall be raised by the Individual Departments and same
shall be approved by Head of Indenting Department for further
processing by Contract Cell/ Contracting Department. Such
indents need not be scrutinized by the Screening Committee
b. The same type of job / service contract shall not be awarded
more than twice in a year by an Individual Department and its
cumulative value should not exceed ` 4,00,000/- per year for a
Department. A certificate for the same shall be given by the
HOD of the Indenting Department.
c. Re-appropriation of the Budget allocated to a particular
Department for small value contract shall not be done.
24.2.2 Estimated Value
Estimate should be realistic with adjustment for variations in the

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 prices of various elements including labour rates, wages, etc.
24.2.3 Issue of Tender Enquiry
a. LTE shall be sent to minimum 3 contractors. All registered
contractors should be included. In case a large number of
contractors are registered, then rotation as per Para 5.3.4 may
be considered. It should include the last contractor unless there
is satisfactory recorded reason to exclude them. This shall be
approved as per normal DOP.
b. In case technical terms/ specifications are frozen, Single Part
Quotation may also be called.
c. Tender Enquiry should mention that the following shall apply and
no deviation would be accepted:
i) Tender terms / specifications must be accepted by the tenderer.
Offers not conforming to tendered specification, terms &
conditions, shall be summarily rejected.
ii) Prices must remain firm during the currency of the contract.
iii) Job shall be awarded to one contractor.
d. In case of LTE to 2 firms, clearance of concerned HOD of
Indenting Department for Indent and approval of Next Higher
Authority as per DOP for issue of enquiry is to be obtained.
24.2.4 Opening of Offers
Wherever less than three offers are received, the case shall be
processed with approval of Next Higher Authority.
24.2.5 Placement of Order
a. Order shall be placed on overall L-1 tenderer.
b. In case L-1 offer exceeds the approved range of % deviation, the
same may be accepted with the approval of Next Higher
Authority for acceptance of tender as per DOP, provided the
prices are considered reasonable as per prevailing market
trend.
c. In case L-1 offer is not considered reasonable, Contract Cell/
Contracting Department may correspond directly with the party
to bring it to approved range with the approval of Next Higher
Authority. In case the prices still remain outside approved range
of % deviation the same may be considered for placement of
order with the approval of Next Higher Authority, if prices are
considered reasonable as per prevailing market trend, failing
which re- tendering may be resorted to with the approval of Next
Higher Authority.

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 d. If the L-1 tenderer backs out at any stage, the case shall be re-
processed.
25.0 GENERAL
25.1 The employees associated with award / execution of contracts
and purchase of items shall ensure that
a) relevant provision of SAIL CDA Rules, 1977 are complied with,
b) while dealing with relations, the relative shall be as defined in
the Companies Act, 2013.
25.2 Tender enquiry format should have a clause making it compulsory
for a bidder to declare whether:
a) the proprietor / partner / Director of the firm/ company has any
relationship within the meaning of Section 6 of the Companies
Act 2013 with any of the employee working in the plants / units
concerned or Director of SAIL including its subsidiaries and if
so, give the details.
b) the person or team representing the firm is also representing
any other firm participating against the tender and if so, give the
details thereon.
Non-disclosure/ Incorrect disclosure of the above details factually
by a firm either on its own while submitting its offer or upon enquiry
at the option of SAIL during the scrutiny of its offer may invite penal
action against the firm, which may include rejection of the offer,
suspension of business dealings or both. A standard format for
declaration/ "Non-Collusive Tendering Certificate" shall be used to
bring uniformity across SAIL plants/ units (Appendix – 2).
25.3 In all cases of procurement of goods or services, for better
transparency and accountability, electronic mode of
communication shall be used. Physical tendering shall be resorted
to with the approval of HOMM, only in cases which are not found
feasible to be processed on ERP/ SRM, EPS, GeM or any other
web-based system and only with the recorded reasons.



Purchase/ Contract Procedure 2020 (PCP - 2020) Page 53/53

 Appendix - 1

Bid-Securing Declaration
(In lieu of EMD)
Date: [insert date (as day, month and year)]
Bid No.: [insert number of bidding process]
Alternative No.: [insert identification No if this is a Bid for an alternative]

To: [insert complete name of Public Body]

I/We*, the undersigned, declare that:

I/We* understand that, according to your conditions, bids must be supported by a Bid-
Securing Declaration in lieu of Earnest Money Deposit.

I/We understand that if I/We withdraw or modify our Bids during the period of validity, or if
I/We are awarded the contract and I/We fail to sign the contract, or to submit a performance
security before the deadline defined in the request for bids document, I/We will be
suspended for the period of one year from being eligible to submit Bids for all future
contracts.

I/We* understand this Bid Securing Declaration shall cease to be valid if I am/we are* not
the successful Bidder, upon the earlier of (i) the receipt of your notification of the name of
the successful Bidder; or (ii) thirty days after the expiration of the validity of my/our* Bid.

Signed: [insert signature of person whose name and capacity are shown] In the capacity of
[insert legal capacity of person signing the Bid Securing Declaration]

Name: [insert complete name of person signing the Bid Securing Declaration]

Duly authorized to sign the bid for and on behalf of: [insert complete name of Bidder]

Dated on ____________ day of __________________, _______ [insert date of signing]

Corporate Seal (where appropriate)

[Note: In case of a Joint Venture, the Bid Securing Declaration must be in the name of all
partners to the Joint Venture that submits the bid.]

*Please delete as appropriate

 APPENDIX - 2

FORMAT

NON-COLLUSIVE TENDERING CERTIFICATE

(to be signed by an authorised person on the Tenderer’s behalf)

To
Plants/ Units
Steel Authority of India Limited
Place

Dear Sir/ Madam,

Non-Collusive Tendering Certificate for {RFQ/ Tender No. ( ) Date ( )}

1. We, (name(s) of the tenderer(s)) of (address (es) of the tenderer(s)) refer to the bid/
offer against (the “Tender”).

2. Non-collusion

We represent and warrant that in relation to the Tender:

(a) Our bid was developed genuinely, independently and made with the intention to
accept the Contract it awarded;
(b) Our bid was not prepared with any agreement, arrangement, communication,
understanding, promise of undertaking with any person (including any other
tenderer or competitor) regarding:
i) prices;
ii) methods, factors or formulas used to calculate prices;
iii) an intention or decision to submit a bid;
iv) an intention or decision to withdraw a bid;
v) the submission of bid that does not conform with the requirements of the
tender;
vi) the quality, quantity, specifications or delivery particulars of the products or
services to which this tender relates; and
vii) the terms of the bid, and we undertake that we will not, prior to the award
of the Contract, enter into or engage in any of the foregoing.

3. Disclosure of in case of Job/ Project Contracts

We understand that we are required to disclose all intended sub-contracting

arrangements relating to the Tender to the Plants/ Units--------, Steel Authority of
India Limited, Place -------------, including those which are entered into after the
Contract is awarded. We warrant that we have duly disclosed and will continue to
disclose such arrangements to the Plants/ Units--------, Steel Authority of India
Limited, Place -------------.

4. Consequences of breach or non-compliance

We understand that in the event of any breach or non-compliance with any

warranties or undertakings in this certificate, the Plants/ Units--------, Steel Authority
of India Limited, Place ------------- may, at its discretion, invalidate our bid, exclude us

Page 1 of 2
 in future tenders, pursue damages or other forms of redress from us (including but
not limited to damages for delay, costs and expenses of re-tendering and other
costs incurred), and /or (in the event that we are awarded the Contract) terminate
the Contract.

Signed for and on behalf of the (tenderer)

Signature:
Name:
Position:
Date:

Note:

Para 2(b) is not applicable to Agreements, arrangements, communications, understandings,

promises or undertakings with:

(a) the Plants/ Units, Steel Authority of India Limited, Place;

(b) a joint venture partner, where joint venture agreements, arrangements, relevant to the bid
exist and which are notified to the Plants/ Units--------, Steel Authority of India Limited, Place
-----------;
(c) consultants or sub-contractors, provided that the communications are held in strict
confidence and limited to the information required to facilitate that particular consultancy
arrangement or sub-contract;
(d) professional advisers, provided that the communications are held in strict confidence and
limited to the information required for the adviser to render their professional advice in
relation to the Tender;
(e) insurers or brokers for the purpose of obtaining an insurance quote, provided that the
communications are held in strict confidence and limited to the information required to
facilitate that particular insurance arrangement; and
(f) Banks for the purpose of obtaining financing for the contract, provided that the
communications are held in strict confidence and limited to the information required to
facilitate that financing.

Page 2 of 2
CVC CIRCULARS
 No. 12-02-1-CTE-6
Government of India
Central Vigilance Commission
(CTE’s Organisation)
Satarkata Bhavan,
Block A, GPO Complex,
INA, New Delhi – 110 023.
Dated the 17th December 2002.
OFFICE MEMORANDUM
Subject : - Prequalification criteria (PQ).

The Commission has received complaints regarding discriminatory

prequalification criteria incorporated in the tender documents by various
Deptts./Organisations. It has also been observed during intensive examination of
various works/contracts by CTEO that the prequalification criteria is either not
clearly specified or made very stringent/very lax to restrict/facilitate the entry of
bidders.

2. The prequalification criteria is a yardstick to allow or disallow the firms to

participate in the bids. A vaguely defined PQ criteria results in stalling the
process of finalizing the contract or award of the contract in a non-transparent
manner. It has been noticed that organizations, at times pick up the PQ criteria
from some similar work executed in the past, without appropriately amending the
different parameters according to the requirements of the present work. Very
often it is seen that only contractors known to the officials of the organization and
to the Architects are placed on the select list. This system gives considerable
scope for malpractices, favouritism and corruption. It is, therefore, necessary to
fix in advance the minimum qualification, experience and number of similar works
of a minimum magnitude satisfactorily executed in terms of quality and period of
execution.

3. Some of the common irregularities/lapses observed in this regard are

highlighted as under: -

i) For a work with an estimated cost of Rs.15 crores to be completed in

two years, the criteria for average turnover in the last 5 years was kept
as Rs.15 crores although the amount of work to be executed in one
year was only Rs.7.5 crores. The above resulted in prequalification of
a single firm.

ii) One organization for purchase of Computer hardware kept the criteria
for financial annual turnover of Rs.100 crores although the value of
purchase was less than Rs.10 crores, resulting in disqualification of
reputed computer firms.
Contd….
 -: 2 :-

iii) In one case of purchase of Computer hardware, the prequalification

criteria stipulated was that the firms should have made profit in the last
two years and should possess ISO Certification. It resulted in
disqualification of reputed vendors including a PSU.

iv) In a work for supply and installation of A.C. Plant, retendering was
resorted to with diluted prequalification criteria without adequate
justification, to favour selection of a particular firm.

v) An organization invited tenders for hiring of D.G. Sets with eligibility of

having 3 years experience in supplying D.G. Sets. The cut off dates
regarding work experience were not clearly indicated. The above
resulted in qualification of firms which had conducted such business for
3 years, some 20 years back. On account of this vague condition,
some firms that were currently not even in the business were also
qualified.

vi) In many cases, “Similar works” is not clearly defined in the tender
documents. In one such case, the supply and installation of A.C.
ducting and the work of installation of false ceiling were combined
together. Such works are normally not executed together as A.C.
ducting work is normally executed as a part of A.C. work while false
ceiling work is a part of civil construction or interior design works.
Therefore, no firm can possibly qualify for such work with experience of
similar work. The above resulted in qualification of A.C. Contractors
without having any experience of false ceiling work although the major
portion of the work constituted false ceiling work.

4. The above list is illustrative and not exhaustive. While framing the
prequalification criteria, the end purpose of doing so should be kept in view. The
purpose of any selection procedure is to attract the participation of reputed and
capable firms with proper track records. The PQ conditions should be
exhaustive, yet specific. The factors that may be kept in view while framing the
PQ Criteria includes the scope and nature of work, experience of firms in the
same field and financial soundness of firms.

5. The following points must be kept in view while fixing the eligibility criteria:-

Contd….
 -: 3 :-
A) For Civil/Electrical Works

i) Average Annual financial turnover during the last 3 years, ending 31st
March of the previous financial year, should be at least 30% of the
estimated cost.

ii) Experience of having successfully completed similar works during last

7 years ending last day of month previous to the one in which
applications are invited should be either of the following: -

a. Three similar completed works costing not less than the amount
equal to 40% of the estimated cost.

or

b. Two similar completed works costing not less than the amount
equal to 50% of the estimated cost.

or

c. One similar completed work costing not less than the amount equal
to 80% of the estimated cost.

iii) Definition of “similar work” should be clearly defined.

In addition to above, the criteria regarding satisfactory performance of

works, personnel, establishment, plant, equipment etc. may be incorporated
according to the requirement of the Project.

B) For Store/Purchase Contracts

Prequalification/Post Qualification shall be based entirely upon the

capability and resources of prospective bidders to perform the particular contract
satisfactorily, taking into account their (i) experience and past performance on
similar contracts for last 2 years (ii) capabilities with respect to personnel,
equipment and manufacturing facilities (iii) financial standing through latest
I.T.C.C., Annual report (balance sheet and Profit & Loss Account) of last 3 years.
The quantity, delivery and value requirement shall be kept in view, while fixing
the PQ criteria. No bidder should be denied prequalification/post qualification for
reasons unrelated to its capability and resources to successfully perform the
contract.

Contd….
 -: 4 :-

6. It is suggested that these instructions may be circulated amongst the

concerned officials of your organization for guidance in fixing prequalification
criteria. These instructions are also available on CVC’s website, http://cvc.nic.in.

(M.P. Juneja)
Chief Technical Examiner

To

All CVOs of Ministries/Departments/PSUs/Banks/Insurance Companies/

Autonomous Organisations/Societies/UTs.
 No. 12-02-1-CTE-6
Government of India
Central Vigilance Commission
(CTE’s Organisation)
Satarkata Bhavan, Block A,
4th Floor, GPO Complex,
INA, New Delhi – 110 023.
Dated: 7th May, 2004

OFFICE MEMORANDUM

Subject : - Pre-qualification Criteria (PQ).

Guidelines were prescribed in this office OM of even number dated

17/12/2002, on the above-cited subject to ensure that the pre-qualification criteria
specified in the tender document should neither be made very stringent nor very
lax to restrict/facilitate the entry of bidders. It is clarified that the guidelines
issued are illustrative and the organizations may suitably modify these guidelines
for specialized jobs/works, if considered necessary. However, it should be
ensured that the PQ criteria are exhaustive, yet specific and there is fair
competition. It should also be ensured that the PQ criteria is clearly stipulated in
unambiguous terms in the bid documents.

(M.P. Juneja)
Chief Technical Examiner

To
All CVOs of Ministries/Departments/PSUs/Banks/Insurance Companies/
Autonomous Organisations/Societies/UTs.
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