Guide lines for procurement of Plant &

Machinery

GENERAL : THE ACTION TO PURCHASE OR REPLACE PLANT &

MACHINERY IS OUTCOME OF ONGOING REVIEW OF MATCHING
THE REQUIREMENT OF PRODUCTION CAPACITY WITH THAT
AVAILABLE .THE PROCUREMENT ARE AIMED AT CREATION OF
LONG TERM ASSETS AND FOLLOW A DEFINITE PROCESS OF
ACQUISITION AND USE.
INITIATION OF DEMAND: THE PLANT &
MACHINERY ARE PROCURED IN ORDNANCE FACTORIES UNDER
TWO HEADS NAMELY RR AND NC.
Guide lines for procurement of Plant &
Machinery
 THE RR MACHINES ARE PROCURED TO RENEW AND
REPLACE OLD CAPACITIES OF THE FACTORIES AND THE NC
PLANT AND MACHINERY ARE REQUIRED TO CREAT NEW
CAPACITY OR AUGMENT THEM. THE PROCUREMENT OF
PLANT & MACHINERY UNDER RR & NC HEADS IS AIMED AT
ACCELERATING MODERNISATION OF ORDNANCE
FACTORIES SO AS TO KEEP PACE WITH THE FAST
CHANGING PRODUCT MIX AND INDUCTION OF NEW
PRODUCTIVE TECHNOLOGIES. ALL INVESTMENT
PROPOSALS FOR PROCUREMENT OF P&M ARE TO BE MADE
BY RAISING DEMAND ON CASE TO CASE BASIS
 DEPRECIATION
• THE EXISTING MACHINES IN THE FACTORIES ARE
DEPRECIATED AT SPECIFIED RATES TO RECOVER
THE INVESTMENTS MADE FOR THEIR
PROCUREMENT . WITH PASSAGE OF TIME THE
RESIDUAL BOOK VALUE OF SUCH MACHINES
BECOME ZERO, WHEN THEY BECOME DUE FOR
REPLACEMENT. THE MACHINE WOULDALSO BE
DUE FOR REPLACEMENT WHEN THEY ARE
BEYOND ECONOMICAL REPAIR ON THE
ASSESMENT OF MACHINE CONDITION AND
RECOMMENDATION OF A TECHNICAL
COMMITTEE.. THE LIFE OF PLANT AND
MACHINERY WILL ALSO BE GUIDED BY THE
CONSIDERATION IF THE MACHINE HAS BEEN
OPERATED IN SINGLE OR DOUBLE SHIFTS,
WHETHER IT IS A TOOL ROOM OR PRODUCTION
MACHINE OR WHETHER IT IS A COMPUTER OR
ORDINARY PRODUCTION EQUIPMENT.
 P&M

• THE NORMS OF DEPRECIATION ARE SUCH THAT

AN UNIFORM DEPRECIATION RATE OF 5% OF THE
COST OF THE EQUIPMENT PER YEAR IS CHARGED
GENERALLY, WITH SOME NOTABLE EXCEPTIONS
LIKE TOOL ROOM MACHINE ETC. FOR TOOL
ROOM MACHINES A PROVISION IS MADE TO
TRANSFER THEM TO PRODUCTION SHOPS AT THE
END OF 10 YEARS IF THEY HAVE LOST THEIR
ACCURACY.IT HAS BEEN DECIDED THAT THE
RATE OF DEPRICIATION FOR ELECTRONIC
EXCHANGES AND THEIR COMPONENTS ARE TO 10
HAVE LIFE OF 15 YEARS FOR PBX EXCHANGES
YEARS FOR PABX EXCHANGES, 25 YRS FOR FAX
EQUIPMENT,10YRS FOR TELEPHONE EQUIPMENT
 P&M
• (a) THE VEHICLES WILL BE DUE FOR
REPLACEMENT AFTER A MINIMUM MILAGE
LIMIT OR MINIMUM YEARS OF SERVICE,
WHICHEVER IS LATTER.
• (b) THE BOARD, CONSISTING OF DY. GM AND
REPRESENTATIVE OF LOCAL ACCOUNTS SHOULD
AFTER THOROUGH TECH. EXAMINATION
SENTENCE, IF SO DECIDED, AS BEYOND
ECONOMIC REPAIR. THE VEHICLE WILL THEN
BECOME DUE FOR REPLACEMENT. UNDER
UNUSAL CONDITION, THE VEHICLE MAY ALSO BE
PUT UP FOR PREMATURE CONDEMNATION AFTER
A THOROUGH EXAMINATION BY TECH.
COMMITTEE.
• ( c ) THE MINIMUM VEHICLE MILAGE AND YEAR
OF SERVICE ARE STIPULATED AS FOLLOWS:
 P&M

• 1. STAFF CAR, AMBULANCE, AND MOTOR CYCLE: 1,50,000 KMS OR 7

YEARS WHICH EVER IS LATER.
• 2. EXPLOSIVE WHEN AND AMMUNITION TRUCK: -DO-
• 3. JEEP, 1/1.5 T TRUCK VAN : -DO-
• 4. 3/5 T TRUCK, 7/7.5 T TRUCK : 1.8 LAKH KMS OR 7 YEARS WHICH
EVER IS LATER.
• 5. TRACTOR, DUMPER : 22,000 HRS. OR 7 YRS WHICHEVER IS
EARLIER.
• THE LIFE OF FIRE FIGHTING EQUIPMENT HAS BEEN FIXED AS 5000
STAIONARY OPERATION HOURS OR 10 YEARS WHICHEVER IS
COMPLETED EARLIER. FOR ROAD VEHICLES EVERY 15 MILES IS
EQUIVALENT TO ONE STATIONARY OPERATION HOUR.
• ON COMPUTERS THE DEPRECIATION IS AT THE RATE OF 15% PER
ANNUM TAKING SEVEN YRS AS A LIFE OF THE EQUIPMENT. THIS
ALSO APPLIES TO ALLIED PERSONEL COMPUTERS, PRINTERS,LASER
JET PRINTERS, PLOTTERS ETC.
 PERSPECTIVE PLANNING

• EACH FACTORY WILL FINALISE ITS PERSPECTIVE

PLAN FOR NEXT 5 TRS.(INACCORDANCE WITH
THE 5 YR PLAN PERIOD) ON THE BASIS OF
PROJECTION FROM USERS IN CASE OF END
PRODUCT FACTORIES AND ON THE BASIS OF
INTER FACTORY DEMANDS IN CASE OF
COMPONENT MANUFACTURING FACTORIES. THE
PERSPECTIVE PLAN OF THE FACTORY SHOULD
BE IN CONONANCE WITH THE PERSPACTIVE
PLAN OF OFB AND IN ACCORDANCE WITH THE
GUIDE LINES ISSUED BY OFB FROM TIME TO
TIME.
• BASED ON THE PERSPACTIVE PRODUCTION LOAD
 P&M
• EACH FACTORY WILL PREPARE ANNUAL RR PLAN AND
REQUIREMENT OF MACHINERY UNDER NC GRANT.
• RR PLAN AND PFC APPROVAL:
2.4.1 FACTORIES WILL FORMULATE THEIR R PLAN ON
ANNUAL BASIS AND FORWARD THE SAME DULY
RECOMMENDED BY PFC/FY TO OFB ALONGWITH RR
DEMAND FOR EACH ITEM COMPLETE IN ALL RESPECTS
FOR CLEARANCE IN ONE GO.
THE FOLLOWING POINTS ARE REQUIRED TO BE KEPT IN
VIEW WHILE FINALISING THE RR PLAN.
(1) COMPLETE LIST OF PLANT & MACHINERY AVAILABLE
WITH THE FACTORY,
 P&M

(1) COMPLETE LIST OF PLANT & MACHINERY AVAILABLE

WITH THE FACTORY,

THERE ORIGINAL COST AND YEAR OF PROCUREMENT .

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

(viii) SAVING IN MATERIAL AND MAN POWER COST

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

AS BER, DULY ACCEPTED BY GM.

(ii) PROFORMA B: IT SHOULD CONTAINS ITEMS FOR
REPLACEMENT, REFLECTED CLEARLY IN
DESCRIPTION WITH REGISTRATION NUMBERS
AND ESTIMATED COST. AFTER APPROVAL BY
PFC/OFB, CHANGES ARE NOT ACCEPTABLE. THE
RR PLAN SHOULD THEREFORE BE PREPARED
WITH CARE.
(iii) PROFORMA C: ADDITIONAL INFORMATION IN
SUPPORT OF ITEMS PROJECTED IN PROFORMA B

ARE REFLECTED HERE.

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

NUMBER OF SUCH MACHINES ARE REQUIRED.

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

HEADED BY OPERATING MEMBER ASSOCIATING

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

AND IT RELATED EQUIPMENT WILL NEED PRIOR SANCTION

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

• CERTAIN SANCTIONED PROJECTS ARE SUPPORTED BY RR

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

• PROCUREMENT OF PLANT & MACHINERYUNDER NEW

CAPITAL IS MADE AGAINST (A) SANCTIONED PROJECT (B)
NORMAL NC TO MEET CONTINGENT INESCAPABLE
REQUIREMENT (i) CREATION OF ADDITIONAL CAPACITY
TO CATER FOR SUSTAINED INCREASE IN PRODUCTION
LOAD (ii) CREATION OF BALANCING CAPACITIES FOR NEW
STORE (iii) MEETING SHORT FALL IN EXISTING CAPACIY
(iv) STATUTORY OBLIGATION, IMPROVEMENT IN
RELIABILITY/ QUALITY OF PRODUCT ETC.
• SINCE PROCUREMENT UNDER NORMAL NC WILL ENHANCE
THE CAPITAL ASSETS, A THROUGH REVIEW IS TO BE MADE
FOR ASSESMENT OF CAPACITY BEFORE MOOTING OUT
SUCH PROPOSALS. DUE CARE IS TO BE TAKEN TO RAISE
SUCH DEMAND AND ADEQUATE JUSTIFICATION IS TO BE
GIVEN IN A STATEMENT OF CASE CLARIFYING THE
NECESSITY AND INESCAPABILITY OF THE EQUIPMENT.
• DIRECT PURCHASE OF INDIGENOUS PLANT & MACHINERY
UNDER NORMAL NC MAY BE RESORTED TO BY
GM’SWITHIN THE DELEGATED POWERS AND IN
 NC
CONSULTATION WITH LAO. THE ABOVE PROCUREMENT
WILL BE SUBJECT TO FOLLOWING LAID DOWN
PROCEEDURES, CVC GUIDE LINES, EXISTING PROVISIONS
OF FINANCIAL REGULATIONS AND ANNUAL BUDGET TO
BE GIVEN BY THE BOARD AFTER APPROVAL OF
MEMBER/PEDB.
 BEYOND THE DELEGATED POWER OF GM, ALL NC
DEMANDS IN THE PRESCRIBED FORMAT DULY VETTED BY
LAO WILL BE FORWARDED TO OFB KEEPING THE POINTS
IN VIEW AS MENTIONED IN PARA 2.4.1 (EXCEPT THE
DETAILS SPECIFIC FOR RR PROPOSAL). SUCH NC DEMANDS
SHOULD ALSO ENCLOSE THE REQUIRED DOCUMENTS AS
MENTIONED UNDER PARA 2.4.3 (EXCEPT THOSE WHICH
ARE RELEVANT FOR RR DEMANDS ONLY) FOR CLEARANC
OF OPERATING DIVISION FROM NECESSARY ANGLE AND
CONCURRENCE OF FINANCE DIVISION FROM
EXPENDITURE PRIOR TO OBTAINING THE FINAL APPROVAL
OF OPERATING MEMBER
 NC
ON RECEIPT OF OFB APPROVAL, FACTORY WILL
FLOAT TENDER ENQUIRY AND FORWARD
TEC/TPC RECOMMENDATION DULY ASSOCIATING
LAO FOR SANCTION OF OFB AS IN THE CASE OF
RR PROPOSALS.
 NEW CAPITAL INVESTMENT IS ALSO REQUIRED
FOR CREATION OF PROJECT CAPACITY FOR NEW
STORES. FOR PLANT AND MACHINERY AGAINST
SANCTIONED PROJECTS, PROCUREMENT IS
CONTROLLED BY OFB AGAINST ITEM WISE LIST
OF PLANT AND MACHINERY WITH ESTIMATED
COST. DETAILED SPECIFICATIONS ARE
FINALISED BY THE FACTORY. AGAINST THE
APPROVAL LIST OF PLANT & MACHINERY UNDER
ANY SANCTIONED PROJECT NO DEMAND IS
REQUIRED TO BE RAISED.
 NC
OFB WILL PRIORTISE THE REQUIEMENT AND
AUTHORISE GM FOR INITIATING PROCUREMENT
ACTION. DIRECT PURCHASE OF PLANT &
MACHINERY INCLUDED IN THE PROJECT
SANCTION WILL BE MADE BY GM UNDER HIS
DELEGATED POWER WITH THE OMNIBUS
APPROVAL OF OFB. FOR PROCUREMENT OF
PLANT AND MACHINERY BEYOND DELEGATED
POWERS OF GM, THE FACTORY WILL FORWARD
THE SPECIFICATION, ESTIMATED COST BASED ON
THE LATEST BUDGETRY QUOTATION AND THE
LIST OF PROSPECTIVE SUPPLIERS DULY
RECOMMENDED BY FACTORY LEVEL TPC
HEADED BY GM FOR APPROVAL OF CONCERNED
MEMBER/OFB. THE PROCEEDURE FOR FLOATING
OF TENDER ENQUIRY AND TEC/TPC PROPOSALS
 NC

WILL BE THE SAME AS IN THE CASE OF NORMAL NC

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

OFB MAY APPOINT A NODAL FACTORY FOR

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

• IT HAS BEEN LAID DOWN THAT THE

INVESTMENTS BE CORRELATED TO KNOWN
DEMAND OF THE USER SERVICES FOR NEXT FIVE
TO TEN YEARS AND ENSURE THAT THERE IS
EITHER CASH INFLOW DUE TO REPLACEMENT OF
MACHINERY/PLANTS OR AVOID CASH
OUTFLOWS DUE TO NON REPLACEMENTS. THE
FOLLOWING ACTIVITIES ARE SUGGESTED:
(i) EACH FACTORY SHOULD SUBMIT DETAILED FIVE
YEAR INVESTMENT PLAN WITH YEARWISE CASH
FLOW, TO OFB.
(ii) EACH OPERATING DIVISION SHOULD
 MOD P&M-2

CONSOLIDATE SUCH PLANS AND PREPARE A

DIVISIONAL REPLACEMENT PLAN FOR FIVE
YEARS WITH PROJECTED CASH OUT FLOW.
(iii) PEDB DIVISION SHOULD SCRUTINISE AND
CONSOLIDATE SUCH AGGREGATION OF
DIVISIONAL PLANS AND PLAN TOTAL CASH
OUTFLOW.
(iv) RECOMMENDATIONS OF PEDB DIVISION ON
PRIORITIES OF ITEMS DEPENDING UPON THE
TOTAL FUND PROJECTIONS MADE IN OFB’S FIVE
YEAR PLAN .
(v) APPROVAL OF THE CONSOLIDATED LIST OF
PLANTS AND MACHINERY BY O.F.B AFTER
 MOD P& M-3

VETTING BY MEMBER (FINANCE).

THE INDIVISUAL RR PROPOSAL SHOULD BE
EXAMINED WITH A ZERO BASED ANALYSIS TO
ASCERTAIN THE NECESSITY OF THE MACHINE TO
BE PURCHASED, ITS TECHNOLOGICAL MERITS
AND SUITABILITY, MANPOWE UTILISATION,
COST CONTROL, DEPRECIATION AND ITS IMPACT
ON PRODUCT COST, ENERGY CONSUMPTION ETC.
IT HAS ALSO BEEN ADVISED BY SECRETARY (DP
& S) AND NC INVESTMENT, (OTHER THAN
PROJECT COSTS) SHOULD BE SUBJECTED TO
EVEN MORE RIGROUS EXAMINATION THAN THAT
IS NORMALLY DONE FOR RR CASES. WHILE
EXAMINING THE NECESSITY THE ECONOMICS OF
 MD P&M-4

OUTSOURCING THE PRODUCT MAY ALSO BE

EXAMINED.
THE NECESSITY AND CAPACITY CRITERIA
REQUIRED TO BE EXAMINED ARE:
(iii) DETAILS OF COMPONENTS/END PRODUCTS
REQUIRED TO BE MANUFACTURED
ALONGWITH ANNUAL CAPACITY.
(iv) BASIS OF COMPUTING THE ANNUAL
REQUIREMENT, VIS-À-VIS PRODUCTION
PROGRAMME.
(v) SCRUTINY OF THE PRODUCTION LOAD WITH
REFERENCE TO THE PROJECTED DEMANDS FOR
END PRODUCTS PLACED BY USER.
(vi) CYCLE TIME DATA OBTAINED FROM MACHINE
TOOL SUPPLIERS AND AVAILABLE LITRATURE.
 MOD P&M-5

(V) DETAILED CALCULATION OF REQUIREMENT OF

MACHINES BASED ON CYCLE TIMES AND
REQUIRED ANNUAL OUT RUN.
DOCUMENTS REQUIRED BY OFB FOR EXAMINING
THE ABOVE ARE:
(iii) THE REQUIREMENT IN THE FORM OF DEMAND
FROM THE USER.
(iv) VETTING OF THE DEMAND BY ASSOCIATE
FINANCE/ACCOUNTS OFFICE.
(v) CONDEMNATION REPORT DECLARING THE
EXISTING MACHINE AS BEYOND ECONOMICAL
REPAIR (RR CASES).
(vi) ORIGINAL BOOK VALUE YEAR OF PURCHASE
 MOD P & M-6

AND PRESENT BOOK VALUE OF THE EXISTING

MACHINE, AS OBTAINED FIRM CAPITAL BLOCK
REGISTER (FOR RR CASES)
(ii) BUDGETARY OFFERS FROM SUPPLIERS AND
POTENTIAL SUPPLIERS.
(iii) FACTORY TPC RECOMMENDATION REGARDING
MODE OF TENDERING AND LIST OF
PROSPECTIVE SUPPLIERS.
COST BENEFIT CRITERION:
• THE COST BENEFIT APPRAISAL IN THE CASE OF
MAJOR INVESTMENT INVOLVING PLANT AND
MACHINERY WORK RS. 50 LAKHS OR MORE IS
REQUIRED TO BE ASSESED AND DERIVED
USING IRR (INTERNAL RATE OF RETURN)
 MOD P& M-7

• THE IRR METHOD IS TO ASSESS THE GENERATED

CASH INFLOW OVER THE YEARS, COMPARED
WITH A CUT OFF/HURDLE RATE OF INTERNAL
RATE OF RETURN. FOR ORDNANCE FACTORIES, A
MINIMUM OUT OFF RATE OF RTURN OF 12% IS
PRESCRIBED. THE RATE OF RETURN IS ASSESED
NOT ONLY IN TERMS OF CASH INFLOWS BUT
ALSO AVIDANCE OF CASH OUTFLOWS
RESULTING FROM NON-REPLACEMENT OF SUCH
MACHINERY. THERE COULD BE REASONS FOR
TAKING UP PROJECTS WITH LESS THAN 12% IRR.
SUCH REASONS SHOULD CLEARLY BROUGHT
OUT WITH THE ASSESSED IRR.
 MOD P & M-8
• PROJECTISATION OF HIGH VALUE OF
PROCUREMENTS: INVESTMENT OF RS. 10 CRORES
AND ABOVE SHOULD BE PROJECTISED. THE
NECESSITY AND THE COST ESTIMATES SHOULD
BE CONTAINED IN A PROJECT REPORT FOR SUCH
INDIVIDUAL RR PROPOSALS. THESE SHOULD
INCORPORATE REALISTICALLY ESTIMATED
COSTS AND PDCs OF ACTIVITY MILESTONES
BASED ON WHICH OFB MAY ACCORD ITS
APPROVAL.
• THE PROJECT SHOULD BE MONITORED BY OFB,
ONCE APPROVED. COST OVERRUNS BEYOND 10%
OF PROJECT COSTS AND TIME OVERRUNS
BEYOND ONE YEAR SHOULD BE SPECIFICALLY
EXAMINED BY OFB AND RESPOSIBILITIES
 MOD P & M-9

• FIXED IF SUCH OVERUNS ARE DUE TO FAILURE

IN EXECUTIVES OR INCORRECT ESTIMATION.
• IT HAS ALSO BEEN ADVISED THAT HIERARCHY
OF PROJECTS, THEIR RATES OF RETURN,
PRIORITY ETC. MAY BE DECIDED IN THE FIRST
YEAR OF THE PLAN ITSELF.
• FINANCIAL APPRAISAL OF CAPITAL
INVESTMENT: A CAPITAL INVESTMENT
PROPOSAL WILL REQUIRE FINANCIAL APPRASAL
WHICH WOULD INVOLVE THE FOLLOWING
SEQUENCE OF STEPS:
• (i) ESTIMATION OF THE INITIAL CAPITAL
INVESTMENT AND THE TIMING OF CASH
OUTFLOW.
 MOD P & M -10

(i) ESTIMATION OF THE PRODUCTION LEVEL AT THE TIME

OF FULL PRODUCTION.
(ii) ESTIMATION OF FUTURE CASH OUTFLOWS
CONSIDERING VARIOUS PRODUCTION FACTORS.
(iii) ESTIMATION OF FUTURE INFLOWS BASED ON THE
ESTIMATED VOLUME OF PRODUCTION AND PRICES ETC.
(iv) WORKING OUT THE NET IN FLOWS.
(v) EVALUATION OF THE PROPOSAL BASED ON ACCEPTED
FINANCIAL EVALUATION TECHNIQUES LIKE IRR ETC.
 FRAMING OF SPECIFICATION

• GENERAL:
• AN IMPORTANT ACTIVITY IN THE PROCUREMENT
OF PLANT AND MACHINERY IS FRAMING OF
SPECIFICATIONS. THIS INCLUDES ACTIVITIES
RELATED TO IDENTIFYING THE OUTPUT REQUIRED
FROM THE EQUIPMENT IN QUANTITY,
CHARACTERSTICSFEATURES AND QUALITY OF
PRODUCT.THE SPECIFICATIONS WOULD INDICATE
THE SIZE OF THE EQUIPMENT, POWER
CONSUMPTION, SERVICE REQUIREMENT, TYPE OF
AUXILIARIES, NATURE OF EFFLUENTS DISCHRGED,
COMPLIANCE TO LOCAL STATUORY REGULATIONS
ETC. THE CODES AND STANDARDS OF
ENGINEERING PRACTICES APPLICABLE
 FS2

• INTERNATIONALLY, NATIONALLY AND THOSE

REQUIRED SPECIALLY FOR OFB REUIREMENTS
ALSO WOULD BE SPECIFIED. THE GENERAL
CONDITIONS AS OBTAINING IN THE
ORGANISATION WOULD BE HIGHLIGHTED IN THE
TENDERING STAGE SO THAT INTENDING BIDDERS
COULD OFFER CONFORMANCE AT THE INITIAL
BID ITSELF.
• OUTLINES OF A SPECIFICATION:
• KEEPING THE ABOVE REQUIREMENTS IN VIEW,
THE FOLLOWING PARAMETERS ARE REQUIRED
TO BE CLEARLY DEFINED WHILE FRAMING
SPECIFICATION FOR P&M:
(iv) CLEAR TECH. REQUIREMENTS.
(a) SPECIFICATIONS ARE TO BE BROAD BASED
MENTIONING THE POINTS WHERE NO
DEEVIATION IS PERMITTED WITH ASTERISK.
 FS 3

(b) THE SPECIFICATION IN GENERAL SHOULD ALSO BE

MENTION THE END PRODUCT REQUIREMENT
TAKING INTO ACCOUNT THE FLEXIBILY REQUIRED
FOR FUTURE OPTIONS, UNLESS PROPRIETARY
ARTICLE CERTIFICATION CAN BE JUSTIFIED FROM
END USE CONSIDERATION, COPYING A MACHINERY
CATALOGUE FOR SPECIFICATION MUST BE
AVOIDED. THE SPECIFICATION SHOULD TAKE INTO
ACCOUNT LATEST TECHNOLOGICAL
ADVANCEMENT.
(ii) RESPONSIBILITIES OF THE PURCHASER AND THE
SELLER SHOULD BE UNABIGUOUSLY DEFINED.
(iii) AVAILABILITY OF WATER, AIR AND POWER AND
OTHER SERVICES AND THEIR QUALITY.
 F SP 4

(iv) BATTERY LIMITS:THIS WILL INCLUDE SUPPLY OF

WATER AT THE INLET TO THE MACHINE AT A
SPECIFIED POINT, STEAM SUPPLY AT A
PRESPECIFIED POINT, POWER AT A POINT
REQUIRED- NORMALLY AT THE CONTROLPANEL,
VENT/EXAUST PIPING, SUPPLY OF AIR OF
REQUIRED QUALITY AT A MUTUALLY AGREED
POINT.
(ii) TERMS AND CONDITIONS OF SUPPLY OF
MATERIALS, SYSTEMS AND SUB SYSTEM WISE.
(iii) DOCUMENTATION: REQUIRED TO ACCOMPANY
THE QUOTATION, AND TO BE SUBMITTED
SUBSEQUENT TO CONTRACT, WITH TIME
SCHEDULE SHOULD BE LAID DOWN.
 F SP 5

(vii) PREDESPATCH INSPECTION CRITERIAN MUST BE

LAID DOWN,
(a) CRITERIA OF ACCEPTANCE SUCH AS MACHINE
GEOMETRICAL ACCURACY, PROCESS CAPABILITY
AND COMPONENT ACCURACY TO BE DEFINED.
(b) TRIALS OF MACHINE INCLUDING SUPPLY OF TRIAL
COMPONENTS AND THE POSITIONING ETC HAS TO BE
STIPULATED.
(C ) REQUIREMENT OF STAGE INSPECTION OF MACHINE
DURING ASSEMBLY, IF ANY MAY BE SPECIFIED.
(viii) TOOL REQUIREMENTS DURING TRIALS AND
DRAWINGS FOR FUTURE USE MAY BE ASKED FOR
(ix) TIME TABLE FOR RECEIPT OF DRAWINGS, SPECIALLY
 F SP 6

IF ERECTION IS CONSIGNEE’S RESPONSIBILITY.

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

(xv) COMMISSIONING RESPONSIBILIES AND CHARGES

THEROF.
(XVI) DEPLOYMENT OF WORKMEN: THEIR
QUALIFICATION AND NUBER AS NEEDED FOR SUCH
ACCEPTANCE TESTS, UNDER THE SUPERVISION OF
THE CONTRACTOR, MAY BE DECIDED IN ADVANCE .
(XVII) WORKING HOURS AND SECURITY RESTRICTIONS
ETC.
(XVIII) SPARE PARTS REQUIREMENTS FOR THE PLANT
UNDER PURCHASE MAY BE MENTIONED
(XIX) SPECIALISED TRAINING REQUIREMENTS FOR THE
PURCHASER’S PERSONNEL SHOULD BE OUTLINED.
DEVELOPMENT OF INDIGENEOUS SUBSTITUE OF POL
USED: IT IS NECESSARY THAT A STIPULATION BE
MADE IN THE CONTRACT THAT PLANT SUPPLIERS
INFORM THE PURCHASER ABOUT FULL DETAILS AND
 FSP-7

AND SPECIFICATION OF ALL POL ITEMS AND

SUGGEST LIKELY INDIAN SUBSTITUTES OR SPECIAL
FEATURES OF THE OIL USED.
METRIC SYSTEM MUST BE USED IN FRAMING OF
SPECIFICATION.
 PROCUREMENT GUIDELINS

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

SEALED COVER CONTAINING THE TECHNICAL BIDS WILL

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

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

SHOWN BELOW,ALONGWITH THEIR TECHNICAL BIDS. FAILURE

TO SUBMIT THIS COMPLANCE STATEMENT WOULD MAKE
THEIR OFFERS LIABLE FOR REJECTION.

PARA OF SPECIFICA COMPLIANCE IN CASE OF NON

TENDER TION OF TO TE COMPLIANCE
ENQUIRY MACHINE SPECIFICATION, DEVIATION
AND OFFERRED YES OR NO FROM TENDER
REQUIRED SPECIFICATION
SPECIFICATI TO BE
ON INDICATED.
 PG-4
• ALL TENDERERS SHOULD BE ASKED TO KEEP
THE PRICE BIDS VALID FOR 3 TO 4 MONTHS. ALL
TECHNICAL EVALUATION SHOULD BE DONE
WITH URGENCY AND IF ON THE BASIS OF
TECHNICAL EVALUATION AND CLARIFICATION ,
PRICE CHANGES BECOME NECESSARY , THE FIRM
MAY OFFER SEALED COVER CHANGES TO THEIR
ORIGINAL PRICE WHICH WILL ALSO BE OPENED
AT THE TIME OF OPENING OF ORIGINAL PRICE
BIDS. THE DATE OF OPENING OF PRICE BIDS MAY
BE FIXED WITH RESPECT TO THE DATE OF
COMMUNICATION REGARDING OPNING OF PRICE
BIDS. THE FIRM MAY BE ASKED TO KEEP THE
VALIDITY OF THEIR PRICE OFFERS FOR A
 P G-5

MINIMUM PERIOD OF EIGHT WEEKS FROM THE DATE

OF OPENING OF PRICE BIDS.
IT FURTHER STATES THAT THE BIDS CONTAINING
PRICE OFFER RECEIVED AFTER OPENING OF
TECHNICAL OFFERS, THOUGH BEFORE THE DATE
FIXED FOR OPENING THE PRICE BIDS FOR PRICE
OFFERS, WILL BE REGARDED AS LATE TENDER. IT MAY
THEREFORE NECESSARY TO INFORM THE TENDERER
THAT REVISION IN PRICE BID OR TECHNICAL BID
HAVING IMPACT ON PRICES WILL NOT BE ACCEPTED.
SINCE THE TWO BID SYYSTEM IS FOLLOWED IN ORD.
FYS., BOTH THE TECHNICAL BID AND COMMERCIAL
BID IS TO BE REJECTED.
 PG-6

• NO REVISION OF PRICE BIDS AFTER THE DUE DATE

LAID DOWN FOR THEIR RECEIPT SHALL AT ALL BE
CONSIDERED BUT IF THE DECISION ON THE
ACCEPTANCE OF THE TENDER IS DELAYED BEYOND
THE ORIGINAL VALIDITY OF OFFERS, AS REQUESTED
IN THE INVITATION TO TENDER AND ANY FIRM
CHOOSE TO REVISE THEIR PRICE BIDS ON THAT
ACCOUNT, EACH CASE MAY BE TREATED ON MERITS.
• IN CASE, ANY REVISION TO TECHNICAL
SPECIFICATION OR SCOPE OF SUPPLY AND PRICES
BECOME UNAVOIDABLE, THE SAME SHOULD BE
RECORDED IN THE FACTORY TEC MEETING WITH
REASONS AND CLEARANCE OF OFB, BOTH OPERATING
DIVN. AND PEDB. DIVN WILL BE OBTAINED BEFORE
OPENING OF PRICE BIDS.
 GENERAL CONDITIONS OF CONTRACT

• THE CONTRACT FOR PROCUREMENT OF PLANT

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

• THERE ARE FOUR MODES OF TENDER:

(i) SINGLE TENDER: PROCUREMENT OF PLANT AND
MACHINERY NORMALLY SHOULD NOT BE RESORTED
TO BY SINGLE TENDER. SINGLE TENDER PURCHASE
AGAINST PROPRIETORY ARTICLE CERTIFICATE MAY
BE RESORTED ONLY FOR PURCHASE OF
EQUIPMENTS/SPARES ACCESSORIES ETC. WHICH ARE
REQUIRED TO REPLACE SUCH OF THOSE
EQUIPMENTS/SPARES ACCESSORIES WHICH FORM
PART OF INTEGRATED PLANT, FROM THE ORIGINAL
SUPPLIER OF SUCH PLANT. FOR EXAMPLE, PURCHASE
OF VACCUME PUMP/COMPRESSORS/GLASS VESSELS,
ETC. IF COVERED UNDER P & M IF THE SUBSTITUTE
ARE NOT AVAILABLE /CAN NOT BE INTEGRATED IN
THE ORIGINAL PLANT.
 MT-1

• LIMITED TENDER: LIMITED TENDER ENQUIRY

SHOULD BE ISSUED PREFERABLY TO AT LEAST 6
KNOWN AND RELIABLE SOURCES FOR THE
EQUIPMENT. NAME OF THE FIRMS TO WHOM
TENDER IS TO BE ISSUED IS DECIDED BY THE
TENDER PURCHASE COMMITTEE HEADED BY GM.
THERE SHOULD BE NO FURTHER INCLUSSION OF
NAMES OF FIRMS BEYOND THAT DECIDED IN THE
TPC MEETINGS.
IT IS ALSO FOLLOWED IN CASES:
(c) WHERE IT IS NOT IN THE PUBLIC INTEREST TO ISSUE
ADVERTISED TENDER ENQUIRY
(d) FOR RECORDED REASONS THAT THE DEMAND IS
URGENT , AND THE NATURE OF URGENCY AND
 MT-1

(c ) WHEN THE SOURCE OF SUPPLY ARE DEFINTELY

KNOWN AND FURTHER SOURCES BEYOND THOSE
KNOWN ARE UNLIKELY TO YELD UNDER
COMPETITION.
(iii) OPEN OR ADVERTISED TENDER
AS A RULE, ALL PURCHASES SPECIALLY WHERE
VALUE IS LARGE AND ADEQUATE TIME IS
AVAILABLE, SHOULD BE MADE BY OPEN TENDER.
IN CASE OF PURCHASE OF ITEMS LIKE A HEAVY
PLANT, MACHINERY OR EQUIPMENT TO BE IMPORTED
FOR PROJECTS WHERE WIDER COMPETITION IS
CONSIDERATION NECESSARY, GLOBAL TENDER
ENQUIRY MAY BE ISSUED. TENDER NOTICE IN SUCH
CASES MAY BE ISSUED IN INDIA IN LEADING
NATIONAL DAILIES, INDIAN TRADE JOURNAL AND
FOREIGN DAILIES TRADE JOURNALS THROUGH THE
 MT-3

SUPPLY MISSION ABROAD.

TWO BID SYSTEM:
ALL CAPITAL ITEMS, ARE PURCHASED AGAINST TWO
BID SYSTEMS. QUOTATIONS ARE CALLED FOR FROM
THE FIRM IN TWO SEPARATE SEALED COVERS
INDICATING “TECHNICAL BID “AND “PRICE BID”. IN
TECHNICAL BID COST OF THE ITEM IS NOT
MENTIONED.
ISSUE AND PREPARATION OF TENDER ENQUIRIES:
GENERAL: PROCUREMENT OF P&M IS DONE THROUGH
INVITATION OF TENDERS. THIS AS PER NORMS SET BY
THE GENERAL FINANCE RULES.THE PROCESS OF
TENDERS THROUGH SEALED COVER CAN
BE FOLLOWED IN ANY OF THE ABOVE STATED METHODS
 MT-4

• ISSUE OF ENQUIRIES: THE ADVERTISED TENDER

ENQUIRY SHOULD CONTAIN BRIEF DETAIS OF THE
MACHINE TO BE PURCHASED AND AT THE LOCATION
WHERE REQUIRED. THE PURCHASER MAY APPLY HIS
DISCRETION IN MENTIONING THE QUANTITY SO AS
NOT TO ADVERSELY AFFECT THE PRICES. NORMALLY
THE STANDARD MEDIUM OF PUBLISHING ADVERTISED
TENDER ENQUIRY IS THE INDIAN TRADE JOURNAL
PUBLISHED BY DIRECTOR GENERAL OF COMMERCIAL
INTELLIGENCE AND STATICS. TENDER NOTICE MAY
ALSO BE PUBLISHED IN NATIONAL OR LOCAL DAILIES
THROUGH DAVP TO GIVE WIDER PUBLICITY. COPIES
OF NOTICE MAY ALSO BE SENT TO THE
KNOWN/REGISTERED SUPPLIERS.
 MT-5

• THE LIMITED AND SINGLE TENDER ENQUIRIES ARE

SENT TO THE SUPPLIERS UNDER CERTIFICATE OF
POSTING TO RESPOND. THE LIMITED TENDER
ENQUIRY WILL BE ISSUED UNDER CERTIFICATE OF
POSTING TO ALL LIKELY SOURCES. THEY WILL
INCLUDE:
• (i) REGISTERED SUPPLIERS (ii) PAST SUPPLIERS
(iii) LIKELY SUPPLIERS AS INFORMED BY THE USER
(iv) FIRMS WHO ARE KNOWN TO HAVE THE CAPACITY
TO SUPPLY.
IT WILL ALSO BE ENSURED THAT FIRMS WHOSE
PERFORMANCE HAS BEEN UNSATISFACTORY ARE
NOT ALLOWED TO PARTICIPATE AGAINST FURTHER
TENDER ENQUIRY. IT IS NECESSARY THEREFORE
THAT LIST OF FIRMS SUSPENDED/BANNED FROM
 MT-7

• WHEN A TENDER ENQUIRYIS SCRAPPED AND A FRESH

TENDER ENQUIRY IS ISSUED, NOTICE THEREOF
SHOULD BE SENT TO THE FIRMS WHO QUOTED
INRESPONSE TO THE ORIGINAL SCRAPPED TNDER
ENQUIRY.
• PREPARATION AND ISSUE OF TENDER ENQUIRY:
• THE TENDER DOCUMENTS SHOULD BE PREPARED
WITH DUE CARE MENTIONING QUANTITY,
QUALITY,DELIVERY,DESTINATION ETC. WHICH
WOULD BE HELPFUL IN PREPARATION AND
SUBMISSION OF TENDER. IT WILL IN GENERAL
CONSIST OF AN INVITATION TO TENDER,SCHEDULE
TO TENDER GIVING DESCRIPTION OF STORES,
DELIVERY, QUANTITY ETC.DOCUMENTS ARE TO BE
SIGNED BY TENDERER AGREEING TO GENERAL
 MT-8

• CONDITIONS GOVERNING THE ENQUIRY AND

RESULTANT CONTRACT(S), QUESTIONNAIS SO
REQUIRED. IN ADDITION, SPECIAL CONDITIONS MAY
ALSO BE LAID DOWN. COMPETANT INSPECTION
AUTHORITY MAY ALSO BE CONSULTED TO ENSURE
THAT THERE IS NO CONDITION THAT INHIBITS
INSPECTIONN FUNCTION. THE TENDER ENQUIRIES
MAY BE ISSUED UNDER THE FSCIMILE SIGNATURE OF
THE OFFICER SIGNING FOR AND ON BEHALF OF
PRESIDENT OF INDIA. THE OFFICE COPY WILL BE
SIGNED IN INK.
• VALIDITY OF OFFERS: THE TENDERS SHOULD
REMAINVALID FOR A PARTICULAR PERIOD AFTER
TENDER OPENING, WHICH IS KNOWN AS THE PERIOD
OF VALIDITY. THE PERIOD OF VALIDITY IS TO BE
 MT-9

INDICATED IN THE TENDER DOCUMENT.

• SELECTION AND PREQUALIFICATION OF FIRMS:
• GENERAL: IN THE COURSE OF PURCHASES FOR OFs,
IT IS NECESSARY TO ESTABLISH RELIABLE
SUPPLIERS BASED ON PERFORMANCE AND
CAPACITY ETC. THEY ARE REGISTERED/APPROVED
FOR A SPECIFIED PERIOD OF YEARS AT THE END OF
WHICH THEY ARE REQUIRED TO RENEW THEIR
REGISTRATION. THE PROCESS OF REGISTRATION IS
MEANT TO KEEP A LIST OF APPROVED LIST OF
CONTRACTORS, IT DOES NOT PRECLUDE
INCLUDING OTHER LIKELY SOURCES OF SUPPLY TO
WHOM TENDER MAY BE ISSUED.
 Mt-10

• FIRMS ENGAGED IN MANUFACTURING, STOCKING,

SELLING OF PLANT & MACHINERY OR OFFERING
SERVICES REQUIRED BY THE PURCHASER’S
ORGANISATION ARE ELIGIBLE FOR REGISTRATION. IT
SHALL BE THE RESPONSIBILITY OF THE FIRM TO KEEP
THEIR ARTICLES OF ASSOCIATION AND AGREEMENTS
WITH THEIR PRINCIPALS ALIVE TO BE ELIGIBLE FOR
REGISTRATION AS ARE APPROVED SUPPLIER WITH
ORDNANCE FACTORIES. AUTHORITIES TO GRANT
REGISTRATION ARE THE HEADS OF ORDNANCE
FACTORIES PURCHASING SUCH STORES.
• THE COST OF APPLICATION FORM AND PROCESSING
FEES ETC ARE TO BE SPECIFIED FROM TIME TO TIME.
 mt11

THE APPLICATION FORMS CAN BE OBTAINED FROM

THE RESPECTIVE UNITS ON PAYMENT OF COST OF
FORMS. THE PROCESSING FEES WILL BE SUBMITTED
ALONGWITH THE FORM. BOTH THE FEES ARE NOT –
REFUNDABLE. IN CASE THE FIRM SEEKS
RENEWAL/ADDITIONAL REGISTRATION,
PRESCRIBED FEES WILL BE SUBMITTED ALONGWITH
APPLICATION FORMS.
• DOCUMENTS TO BE SUBMITTED ALONGWITH
APPLICATION FORMS:-
(iii) CURRENT INCOME TAX CLEARANCE CERTIFICATE.
(iv) AGREEMENTS WITH PRICIPALS AND THEIR TERMS
AND CONDITIONS.
 MT-12

(iii) COPIES OF LAST THREE YEARS ANNUAL REPORT

INDICATING PROFITS AND LOSSES.
(iv) COPIES OF PARTNERSHIP DEEDS.
(v) COPIES OF OWNERSHIP DOCUMENTS IN RESPECT OF
MANUFACTURING PLANT
(vi) AFFIDAVIT THAT THE FIRM HAS NEVER BANNED.
(vii) REGISTRATION AS SSI WITH THE DIRECTOR OF
INDUSTRY OF THE STATE.
(viii) THE MANUFACTURERS ARE TO FURNISH ALL
INFORMATION ON TECHNICAL COMPETENCE,
MANUFACTURING CAPABILITIES, INSPECTION
FACILITIES, AVAILIBILITY OF SKILLED AND
TECHNICAL MAN POWER, TECHNICAL STANDARDS
OF
 MT-13

ITEMS UNDER MANUFACTURE.

(ix) THE MANUFACTURERS OUGHT TO UNDERTAKE THAT THEY
WOULD PROVIDE ADEQUATE INSPECTION FACILITIES AT
THEIR WORKSHOP.
(iii) THE CAPABILITY REPORTS FROM THE GOVT. OF THE
MANUFACTURER’S COUNTRY IN CASE OF FOREIGN FIRMS
SHOULD BE ASKED FOR, REFERENCE MAY ALSO BE MADE TO
EMBASSY OF THE COUNTRY IN INDIA.
(iv) IN ADDITION TO ABOVE ALL THE TENDERER SHOULD BE
REGISTERED WITH THE PURCHASER
REMOVAL OF A FIRM FROM THE LIST OF REGISTERED
SUPPLIERS:
A FIRM MAY BE REMOVED FROM THE LIST OF APPROVED
CONTRACTORS IF ANY OF THE INFORMATION FURNISHED
DURING REGISTRATION IS FOUND NOT TO BE CORRECT OR
DUE TO CHANGED CONDITIONS LIKE BANKRUPTY OR LACK
OF TECH. CAPABILITY ETC.
 MT-14

• OFB HAVE LAID DOWN CERTAIN GUIDELINES ON

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

(iii) WHETHER THE RECOMMENDED FIRM(S) IS/ARE

HAVING THE REQUISIT TECH. AND FINANCIAL
COMPETANCY WITH REGARD TO THE DESIGN,
DEVELOPMENT AND SUPPLY OF SUCH MACHINES.
(iv) IN CASE THE FIRM DOES NOT CONFIRM TO (i) or (ii) or
(iii) CATEGORIES, IN THAT CASE NAME AND ADDRESS
OF THE CUSTOMER TO WHOM THE RECOMMENDED
FIRM(S) HAVE SUPPLIED SIMLAR MACHINE AND THEIR
PERFORMANCE REPORT.
(v) WHETHER THE FIRM(S) RECOMMENDED IS /ARE
HAVING SUFFICIENT CREDIBILITY TO BE CONSIDERED
AS GOVT. SUPPLIERS AS WELL AS THEIR ACCEPTANCE
TO OUR PAYMENT TERMS.
THE ABOVE PARTICULARS ARE REQUIRED TO BE
FURNISHED IN SUPPORT OF THE RECOMMENDATION
 MT-15

OF THE FACTORY’S SELECTION OF THE FIRM.

RECEIPT, CUSTODY AND OPENING OF TENDERS:
TENDERS ARE RECEIVED BY POST/COURIER OR
DROPPED IN THE TENDER BOX . TENDERS, WHICH ARE
RECEIVED BY HAND ARE TO BE RECEIVED BY AN
OFFICER WHO WOULD SIGN WITH THE DATE AND
TIME OF RECEIPT. THEY WILL BE DROPPED IN THE
TENDER BOX.
• TENDERS RECEIVED THROUGH POST WILL BE SENT
TO CONCERNED PURCHASE SECTION.
• IF AN ENVELOPE CONTAINING TENDER DOCUMENTS
DO NOT HAVE ANY PARTICULARS MENTIONED ON IT,
THE ENVELOPE MAY BE OPENED BUT RESEALED IN
THE PRESENCE OF AN OFFICER.
 Opening of tender-2

• TENDERS WILL BE OPENED AT THE TIME ON DATE

STIPULATED , BY TWO OFFICERS NOMINATED.
• UNLESS SUFFICIENT REASONS EXIST,TENDER SHOULD
BE OPENED IN THE PRESENCE OF FIRM’S
REPRESETATIVE,WHO HAVE QUOTED.A STATEMENT
WITH SIGNATURES WILL BE PREPARED FR ALL THE
REPRESENTATIVES PRESENT.
• THE DETAILS OF TENDERS WILL READ OUT IN THE
PRESENCE OF THE REPRESENTATIVES.
• EACH TENDER WILL BE NUMBERED AND INITIALED
WITH DATE ON THE FIRST PAGE. THE
QUANTITY,PRICES, DELIVERY ETC WILL ALSO BE
CIRCLED AND INITIALED WITH DATE. ANY
CORRECTIONS,ALTERATIONSAND CUTTING SHOULD
ALSO BE CIRCLED,INITIALED WITH DATE TO INDICATE
 OPENING OF TENDER-3

• THE FACT AT THE TIME OF OPENING OF TENDERS.

• A SPOT COMPARATIVE STATEMENT OF TENDERS
WILL BE MADE OUTINCLUDING THE PARICULARS
READ OUT DURING TENDER OPENING.
• LATE AND DELAYED TENDERS: TENDERS OR
MODIFICATIONS TO TENDERS RECEIVED AFTER
OPENING OF TENDERS IS CALLED LATE
TENDER.SUCH DELAYED/LATE TENDERS NEED NOT
TO BE OPENED AND “LATE/DELAYED”ENDORSED ON
THEIRORIGINAL ENVELOPE.THEY MAY BE RETURNED
IMMEDIATELY TO THE FIRM,UNOPENED
,IMMEDIATELY AFTER TENDER OPENING.
 EARNEST MONEY DEPOSITS & SECURITY
DEPOSITS (EMD/SD)

• GENERAL: AS PER GENERAL FINANCIAL RULE

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

A CEILING OF RS. 2 LAKH,AT THE TIME OF ENQUIRY IT

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

• EMD MAY BE RETURNED TO UNSUCESSFUL

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

SECURITY WITHIN 30 DAYS OF CONTRACT FOR DUE

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

GUARANTEE, SUBMITTED AS PERFORMANCE SECURITY,

PAYMENT SHALL NOT BE HELD UP.
THE FORMS OF PERFORMANCE SECURITY ACCEPTABLE ARE AS
FOLLOWS:

SL NO. IN FORMS OF RETENTION

WHOSE DEPOSITS/CONDITIONS
NAME THEROF

1. DEMAND GM (FYS) INTEREST FREE SHALL BE RETAINED

DRAFT ON DEPOSITS HELD BY THE AS VALUABLE
SCHEDULED PURCHASING DOCUMENT
BANKS ORGANISATION
 EMD & SD

BANK GM BG, ON NON JUDICIAL STAMPS SHALL BE

GUARANT PAPER MAY BE RETAINED ALONG RETAINED
EES WITH REVALIDATION PAPERS. IT AS
SHOULD BE VALIED FOR A PERIOD VALUABLE
OF 60 DAYS BEYOND THE PERIOD OF DOCUMEN
PERFORMANC T.

• NOTE: DOCUMENTS PRESCRIBED ABOVE SHOULD BE MADE

AUDITABLE DOCUMENTS SUBJECT BY LAO.
• REFUND OF PERFORMANCE SECURITY: ON DUE
PERFORMANCE OF CONTRACT, THE PERFORMANCE SECURITY
DEPOSIT SHALL BE REFUNDED.
• PERFORMANCE SECURITY CAN BE FORFEITED AND CREDITED
TO GOVT. IN EVENT OF BREACH OF CONTRACT.
 EVALUATION OF TENDERS CH-5

• GENERAL: TENDER EVALUATION IS AN IMPORTANT

ASPECT IN THE PROCESS OF PLACEMENT OF ORDER.
THE OFFERS RECEIVED FROM INTENDING BIDDERS
ARE SCRUTINISED AND ASSESED WITH A VIEW TO
ENSURE COMPLIANCE TO THE SPECIFICATION OF THE
MACHINERY REQUIRED AND IDENTIFYING THE
LOWEST TECH. ACCEPTABLE OFFER. THE
EVALUATION OF TENDERS IS DONE IN DIFFERENT
PHASES.
• IT IS TO BE KEPT IN MIND WHILE PROCESSING FOR
PROCUREMENT OF P&M, WHETHER IT IS UNDER
GM’S OR OFB POWER.
 EVALUATION OF TENDERS-2

• TECHNICAL EVALUATION AT FACTORY:

• ON OPENING OF TENDERS, A COMPARATIVE
STATEMENT OF TENDERS IS MADE, ON EACH TECH.
PARAMETER. IT SHOULD RECORD IN A TABULAR
PRESENTAION THE TECH. COMPLIANCE WITH
SPECIFICATIONS, CONFIRMED IN THE TENDER AND
SUBSIQUENT CLARIFICATIONS RECEIEVED. IT
SHOULD ALSO CONTAIN THE FOLLOWING, WITHOUT
MENTIONING THE COST:
(iii) SPECIAL TECH. FEATURES
(iv) SCOPE OF SUPPLY THAT IS THE BASIC MACHINE,
ACCESSORIES, SPARES ETC.
(v) IF PRICE QUOTED IS EX WORKS OR AT DESTINATION.
(vi) IF FREIGHT IS CHARGED EXTRA
 ET-3

(i) IF PACKING AND FORWARDING CHARGES ARE

EXTRA
(ii) IF ERECTION & COMMISSIONING CHARGES EXTRA
(iii) PAYMENT TERMS
(iv) TAXES AND DUTIES ETC.
(v) PRE-DESPATCH INSPECTION TERMS OFFERED BY
THE FIRMS
(vi) FINAL ACCEPTANCE TERMS AS ACCEPTED BY THE
FIRMS
(vii) WARRANTY/GUARANTEE ETC.
(viii) DELIVERY SCHEDULE,ACCEPTANCE OF LD ETC.
(ix) VALIDITY
 ET-4

(xiv)SUBMISSION OF EMD WITH THE TENDER DOCUMENT

(xv) ACCEPTANCE OF ARBRITATION CLAUSE ETC.
IN CASE OF PROCUREMENT OF PLANT & MACHINERY
OF IMPORTED ORIGIN, FOLLOWING INFORMATION
MAY BE INCLUDED:
iv) PENALTY FOR USE OF UNDUE INFLUENCE
v) AGENT/AGENCY COMMISSION
vi) CONDITION OF ARBITRATION PROCEEDING IN INDIA
THE ABOVE IS ONLY INDICATIVE BUT ARE
REQUIRED TO BE COMPILED TO ASSIST DECISION
MAKING IN THE TEC AT FACTORIES AND OFB. IF
ANY TECHNICAL CLARIFICATIONS ARE REQUIRED
TO BE OBTAINED FROM THE FIRMS FOR PROPER
 ET-5

EVALUATION OF THE OFFER,THE SAME BE OBTAINED

AND INCLUDED IN THE CST. THEN THE DGM/ENGG
AND DGM/USER AUTHENTICATE THE CST.
FACTORY LEVEL TPC IS FORMED CONSISTING OF THE
FOLLOWING MEMBERS
GM -CHAIRMAN
AGM/ENGG. - MEMBER
AGM/USER - MEMBER
JT.GM/ENGG - MEMBER
JT.GM/USER - MEMBER
CONTROLLER OF ACCOUNTS/ -MEMBER
JT.C OF A
THE ABOVE COMMITTEE RECOMENDS THE
TECHNICAL SUITABIKITY OF OFFERS RECEIVED
 ET-6

AGAINST THE TENDER INDICATING REASONS IN

DETAILS ABOUT THE OFFERS NOT CONSIDERED
TECHNICALLY ACCEPTABLE. THE MINUTES OF
MEETING IS PREPARED AND SENT TO OFB ALONG
WITH ALL THE TECH. BIDS, TECH CST AND TENDER
SPECIFICATION AND A COPY OF TENDERS ALONG
WITH DRG, IF ANY, FOR APPROVAL OF OFB/TEC.
THE TEC AT FY. LEVEL IS EMPOWERED TO
SCRUTINISE AND APPROVE TECHNICAL SELECTION
OF FIRMS FOR P&M UNDER GM’S POWER. FOR M/CS
COSTING MORE THAN THAT ,FY/TEC
RECOMMENDATIONS ARE TO BE FORWARDED TO OFB
FOR APPROVAL.
THE CONSTITUTION OF TEC IS SAME AS TPC BOTH AT
 ET-7

FY. AND OFB LEVEL AT PRESENT.

THE TEC RECOMMENDATION OF THE FACTORY
SHOULD HAVE THE QUOTATIONS IN ORIGINAL
ENCLOSED ALONG WITH CATALOGUES IF ANY.
• THE TECH. CST s ARE PREPARED BEFORE SEEKING
CLARIFICATION OR CONFIRMING ACCEPTABILITY OF
OFFERS. THEY SHOULD BE DULY UPDATED AFTER
RECEIPT OF CLARIFICATIONS TO COMPLETE THE
TECH. CST. THE COLUMNS SHOULD NOT BE LEFT
BLANK,OR ENTRIES CONTRADICTORY TO THE FINAL
TECH RECOMMENDATIONS IN ABSENCE OF PROPER
UPDATION.A CLAUSE WISE COMPLIANCE STATEMENT,
SUMITTED BY THE FIRM, TO INDICATE
CONFORMANCE WITH TECH SPECIFICATIONS MUST
ALSO BE CONSIDERED FOR FILLING TECH CST.
 TE-8

• TECHNICAL EVALUATION AT OFB: THE RESPECTIVE

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

• TENDER PURCHASE SELECTION AT THE FACTORY:

• ON RECEIPT OF APPROVAL OF OFB/TEC, PRICE BIDS OF
TECHNICALLY ACCEPTABLE OFFERS ARE ANLY
OPENED IN PRESENCE OF TENDERS ARE FINANCIAL
CST/RANKING STATEMENT IS PREPARED ON
EQUITABLE BASIS WHICH IS AUTHENTICATED BY THE
DGM/ENGG AND LOCAL ACCOUNTS OFFICER. A
FACTORY LEVEL COMMITTEE AS MENTIONED IN TEC
IS FORMED WHO RECOMMENDS THE LOWEST OFFER
AMONG THE TECHNICALLY SUITABLE OFFERS FOR
PLACEMENT OF SUPPLY ORDER IN THE FORM OF
MINUTES OF MEETING CONFIRMING THE
REASONABILITY OF THE COST,ACCEPTANCE OF
PAYMENT TERMS ETC. MINUTES OF MEETING ALONG
WITH PRICE BIDS FINANCIAL CST ETC ARE SENT TO
 TPS-2

OFB FOR APPROVAL OF OFB/TPC. THE PRICE BIDS ARE

OF OFFERS WHICH ARE TECHNICALLY REJECTED
NEED NOT BE OPENED. THE BIDDERS, WHOSE PRICE
BIDS ARE TO BE OPENED ARE TO BE DULY INFORMED
ABOUT OPENING OF THEIR PRICE BIDS.
• FACTORIES ARE TO IMPRESS UPON THE TENDERS TO
ENSURE THAT THEIR OFFERS MUST BE KEPT VALID.
AN OFFER WHOSE VALIDITY HAS EXPIRED CANNOT BE
CONSIDERED FOR PLACEMENT OF ORDER.
• ON OPENING OF PRICE BIDS A RANKING STATEMENT
SHOULD BE PREPARED ON THE SPOT AND ALL
RELEVANT DETAILS SHOULD BE ANNOUNCED TO THE
BIDDERS ATTENDING THE TENDER OPENING.A
COMPLETE RANKING STATEMENT GIVING FULL
 TPS-2

DETAILS MAY BE PREPARED SUBSEQUENTLY TO

INCLUDE ALL RELEVANT INFORMATION NECESSARY
FOR ASSESSING THE PRICE AT DESTINATION AND
RANKING OF DIFFERENT BIDDERS.
• THE RANKING STATEMENT SHOULD BE PREPARED ON
EQUITABLE BASIS GIVING BASIC COST OF
MACHINE,ACCESSORIES, TOOLING, ESSENTIAL AND
OPTIONAL ITEMS,PACKING & FORWARDING CHARGES,
ERECTION & COMMISSIONING COSTS, TRAINING
COST,TAXES & DUTIES,FREIGHT PAYMENT TERMS,
WARRANTY AND GUARANTEE CONDITIONS ETC. THE
TOTAL COST OF PLANT & MACHINERYEXCLUDING
SPARES AS AT DESTINATION MAY BE CALCULATED IN
THE RANKING STATEMENT TO ASCERTAIN THE
RANKING OF TECHNICALLY ACCEPTABLE TENDERERS
 TPS-3

• IN CASE THE VENDOR MENTIONS THE ED VARYING

FROM ONE PERCENTAGE TO ANOTHER PERCENTAGE,
THE CST SHOULD BE SO PREPARED TAKING THE
MAXIMUM THAT COULD BE LEVIED AS PER ORDERS
ON DATE.
• THE COST OF SPARES WITH LEVIES AND DUTIES
THERON MAY BE WRITEN SEPARATELY IN THE SAME
TABULATED FORMATFOR ALL FIRMS. THE TOTAL
FINANCIAL IMPLICATION MAY BE WORKED OUT.
• THE RANKING STATEMENT, COMMERCIAL CST
SHOULD ALSO BE VERIFIED AND SIGNED BY
OFFICERS OF FACTORY AND ACCOUNTS.
• THE RANKING STATEMENT FOR IMPORTED PLANT &
MACHINRY WILL BE BASED ON THE EXCHANGE RATE
 TPS-4

ON THE DATE OF OPENING OF PRICE BID. IT SHOULD

BE MENTIONED IN THE CST.
• THE REASONABLENESS OF THE PRICES QUOTED
BY THE LOWEST TECHNICALLY ACCEPTABLE TENDER
IS TO BE ASCERTAINED BASED ON LAST PAID RATE
OR BUDGETARY QUOTATION BASED ON WHICH THE
DEMAND COST WAS ASSESED.
• IF ADDITIONAL FUND IS REQUIRED, DETAILED
JUSTIFICATION FOR THE SAME IS TO BE RECORDED IN
TPC MINUTES FOR THE APPROVAL OF COMPETENT
AUTHORITY.
• THE SOs FOR P & M TO BE PURCHASED UNDER GMs
POWER MAY BE PLACED BASED ON DECISION TAKEN
IN THE TPC MEETINGS ON APPROVAL OF GM AND
FINANCIAL AUTHORITY.
 TPS-4

• FOR THE CASES BEYOND THE FINANCIAL POWER OG

GM, FACTORYTPC RECOMMENDATION MAY BE
FORWARDED TO OFB CLEARLY INDICATING ALL THE
POINTS WHERE OFB’S DECISION ARE NEEDED.

• TENDER PURCHASE COMMITTEE AT OFB:

• FOR P&M TO BE PURCHASED UNDER OFB POWERS,
THE TPC RECOMMENDATIONS OF FACTORY MAY BE
FORWARDED TO OFB IN THE PRESCRIBED FORMAT
WITH COPIES OF CSR/RANKING STATEMENT IN
QUADRUPLICATE, ENCLOSING COPIES OF PRICE BIDS
ETC.
• THE CONCERNED SECTION IN OFB WILL SCRUTINIZE
THE RANKING STATEMENT WITH THE TPC RECOMM-
 TPS-5

RECOMMENDATIONS. THE BRIEF DULY

PREPARED,HAVNG ALL CONNECTED PARTICULARS
WILL BE SUBMITTED FOR RECOMMENDATIONS OF
APPROPRIATE TPC.
• THE TPC DECISION WILL BE COMMUNICATED TO THE
FACTORY FOR PLACEMENT OF ORDER.
• CHECK POINTS FOR SCRUTINY OF TENDERS:
• PROCEDURAL CHECK-POINTS FOR SCRUTINY OF
OFFERS RECEIVED FROM VARIOUS FIRMS AGAINST
TENDER ENQUIRY
• TECHNICAL BID: ALL OFFERS HAVE TO BE SIGNED BY
TENDER OPENING OFFICER WITH DATE.
• IT MAY BE CHECKED WHETHER EMD HAS BEEN
DEPOSITED BY THE TENDERER OR EXEMPTION HAS
 TPS-6

BEEN ASKED AS PER GOVT. ORDERS.

• ON OPENING OF THE TECHNICAL OFFERS, ONE COPY
IS TO BE SENT TO THE USE SECTION FOR THEIR
IMMEDIATE SCRUTINY.
• IN CASE THE COMPLINCE STATEMENT OF THE OFFER
HAS NOT BEEN SUBMITTED BY THE FIRM, A LETTER IS
TO BE ISSUED IMMEDIATELY.
• A TECH. CST IS TO BE PREPARED AND FORWARDED
TO THE USER SECTION WITHIN A MAXIMUM PERIOD
OF 7 DAYS.
• IN CASE THE FIRM IS REQUIRED TO GIVE SOME
CLARIFICATIONS AND MAY REQUIRE A DISCUSSION
THE FIRM SHOULD BE CALLED BY A LETTER
INDICATIG A SPECIFICA DATE BY WHICH THE FIRM
SHOULD SUBMIT THEIR CLARIFICATION.
 TPS-8

• THE USER SECTIONSHOULD BE INVOLVED IN

DISCUSSION AND IN THE RECORD OF DISCUSSION ALL
PRESENT IN THE DISCUSSION INCLUDING FIRM
SHOULD SIGNE.
• REASONS FOR REJECTION ARE TO BE RECORDED IN
THE TEC MINUTES WITH REFERENCE TO THE TENDER
SPECIFICATION AND ALSO FROM FUNCTIONAL POIT
OF VIEW.
• IN CAE OF OPEN/GLOBAL TENDER
ENQUIRY,CAPACITY/CAPABILITY OF THE TENDERERS
AND THE PERFOMANCE OF PLANT & MACHINERY
OFFERED HAVE TO BE ASCERTAINED BEFORE
DECIDING UPON THE TECH. ACCEPTABILITY OF
OFFERS OF THE TENDERERS.
 TPS-9

• THE EXCISE DUTY, SALES TAX, OCTROI ETC ARE TO

BE CLEARLY SPECIFIED BY THE FIRM. IN CASE OF NIL
DUTIES, THE SAME SHOULD ALSO BE SPECIFIED. IN
CASE THEY HAVE NOT CONFIRMED IN TECH BID THE
SAME SHOULD BE ASKED IN WRITING BEFORE
OPENING OF PRICE BID.
• THE OFFER SHOULD CLEARLY INDICATE WARRANTY,
VALIDITY AND THE DELIVERY OF THE ITEM.
• THE STANDARD ITEMS, WHICH HAVE BEEN
INDICATED BY THE FIRM IN THE OFFER, IT SHOULD
BE SPECIFICALLY STATED WHETHER THOSE ARE
BEING SUPPLIED AS ACCESSORIES.
• AFTER THE SCOPE OF SUPPLY IS FINALISED,
 Tps-10

CONFIRMATION MAY BE OBTAINED FROM THE FIRM

BEFORE OPENING OF PRICE BID THAT THEY HAVE
INDICATED ITEM WISE PRICE FOR ALL THE ITEMS
WHICH IS PROPOSED TO BE PROCURED WITHOUT ANY
EXCLUSIONS.

• PRICE BID: NO CORRESPONDANCE SHOULD BE MADE

WITH THE FIRM SEEKING CLARIFICATION, AFTER
OPENING OF THE PRICE BID.
• CST IS TO BE PREPARED BASED ON THE SCOPE OF
SUPPLY ALREADY FURNISHED BY THE ENGG. OFFICE.
 TPS-11

• THE FOLLOWING INDICATED LIST OF ENTRIES WILL

BE REFLECTED IN THE PRICE CST:
(ii) TOTAL WITHOUT SPARES
(iii) TOTAL WITHOUT SPARES BUT WITH DUTIES.
(iv) RANKING
(v) SPARES
(vi) TOTALOF SPARES AND WITH DUTIES.
(vii) TOTALWITH SPARES
(viii) PAYMENT TERMS
(ix) VALIDITY
(x) WARRANTY
REASONABLENESS OF THE PRICE QUOTED BY THE
LOWEST TECHNICALLY ACCEPTABLE TENDER IS TO
BE CHECKED BASED ON CERTAIN DATA VIZ. LPR,
 Tps-12

BUDGETARY QUOTATION BASED ON WHICH THE

ESTIMATED COST WAS ASSESSED OR RECENT
ORDERS PLACED BY SOME REPUTED FIRMS FOR
SIMILAR MACHINES ETC.
• MODEL FORMATS
• FOR PREPARATION OF MINUTES OF FACTORY’S TEC
RECOMMENDATION:
4. NOMENCLATURE AND QUANTITY OF THE
MACHINE.
5. DEMAND NO, AND YEAR. REF OF RR PLAN (FOR RR
M/CS) AND LAO’S CONCURRENCE.
6. OFB’S SANCTION/CLEARANCE,REFERENCE AND DT.
7. ESTIMATED COST FE-RE
 TPS-12

5. MODE OF TENDERING, JUSRIFICATION AND

AUTHORITY TO THE SAME ALONWITH A COPY OF
FACTORY TPC MINUTES.
2. DATE OF ISSUE OF TENDER ENQUIRY,DUE DATE OF
OPENING ,NAME OF THE FIRMS TO WHOM TENDER
WAS ISSUED.
3. DETAILS OF OFFERS RECEIVED INCLUDING FIRMS
RESPONDED,REGRETTED AND NOT RESPONDED.
4. DATE OF TEC MEETING AND DTAILS OF OFFERS
CONSIDERED TECHNICALLY ACCEPTED AND
REASON FOR ACCEPTING DEVIATION, IF ANY.
5. A) DETAILS OF OFFERS NOT CONSIDERED TECH.
ACCEPTABLE ALONGWITH REASONS DULY LINKING
WITH RELEVANT CLAUSE OF TENDER
SPECIFICATION.
 TPS-14

a) SPECIFIC COMMENTS IN RESPECT OF OFFERS NOT

CONSIDERED TECH SUITABLE AS TO WHETHER THE
SAME MAY BE MEET FY’S REQT. FROM
FUNCTIONAL PT. OF VIEW,IF NOT FIRM WISE
COMMENTS SPECIFYING THE LIMITATION OF
OFFERS VIS- A- VIS FUNCTIONAL NECESSITY.
2. WHETHER THE REQT. IS STILL EXISTS KEEPING IN
VIEW THE PRESENT & ANTICIPATED PRODUCT MIX
AND PRODUCTION LOAD.
3. CLAUSE-WISE TECH. CST IN RESPECT OF ALL THE
OFFERS ON EQUTABLE BASIS.
4. IN CASE OF LIMITED TENDER ENQUIRY, FACTORY
TO COMMENT WHETHER THE REPUTED FIRMS
HAVE BEEN ISSUED WITH TENDER ENQURY.IN THE
EVENT OF LACK OF COMPETITION/POOR
 TPS-15

13. RESPONSE FY-TEC MAY COMMENT ON WHETHER

RETENDERING/OTE WILL FETCH MORE OMPETITION.
RECOMMENDATION OF FY’S TEC BY GM DULY
ASSOCIATING LAO.

FOR PREPARATION OF MINUTES OF FY TPC

RECOMMENDATIONS:
5. NOMENCLATURE AND QUANTITY OF THE M/C.
6. DEMAND NO. AND YEAR.
7. OFB APPROVAL AND DATE REFERENCE
AUTHORISING FY FOR OPENING OF PRICE BIDS.
8. DATE OF FY TPC MEETING
9. IN CASE OF IMPORTED OFFER-
 TPC-17

i) COUNTRY OF ORIGIN
ii) RATE OF EXCHANGE TAKEN FOR ARRIVING AT FE
REQUIREMENT.
iii) WHETHER CUSTUM DUTY EXEMPTED IF NOT RATE
TO BE GIVEN.
iv) CONFIRMATION THAT ORDER WILL BE PLACED ON
FOREIGN PRINCIPAL ONLY AND THAT THERE IS NO
INVOLMENT OF INDIAN AGENT REQUIRING
PAYMENT OF AGENCY COMMISSION.
6. FINANCIAL CST IN RESPECT OF TECHNICALLY
ACCEPTABLE OFFERS TAKING SCOPE OF SUPPLY ON
EQUITABLE BASIS.
7. WHETHER THE COST OF RECOMMENDED OFFER IS
CONSIDERED REASONABLE, IF SO JUSTIFICATION
 TPS-18

THE SAME.
2. WHETHER RETENDERING OF TEM IS CONSIDERED
ADVANTAGEOUS TO GET CHEAPER OFFERS.
3. WHETHER THE SCOPE OF SUPPLY CAN BE REDUCED
TO THE BAREST MINMUM WITHOUT AFFECTING THE
INESCAPABLE NECESSITY.
4. PAYMENT TERMS ACCEPTED BY FIRM AND
RECOMMENDED BY FY. WHETHER OTHER
COMMERCIAL TERMS AND CONDITIONS ARE
ACCEPTABLE TO THE FACTORY.
5. COST COMPARISON OR RECOMMENDED OFFER
WITH THE ESTIMATED COST. IN CASE OF VIDE
VARIATION, INDICATE SPECIFIC REASONS AND SO
STATE WHETHER THERE HAS BEEN ANY REVISION
IN SCOPE OF SUPPLY.
 TPS-19

1. COST DETAILS OF RECOMMENDED OFFER VIS-À-VIS

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