INDIANOIL CORPORATION LIMITED

REFINERIES DIVISION

MATERIALS MANAGEMENT MANUAL

JUNE 2014

Contents
S. No.

Chapter heading

Page no

1
2
3
4
5

Chapter I: Introduction
Chapter II: Estimates & Purchase Requisition
Chapter III: Invitation & Receipt Of Tenders
Chapter IV: Evaluation and Acceptance of Tenders
Chapter V: Public Procurement Policy for Micro & Small Enterprises
(MSE)
Chapter VI: Central Procurement Cell (CPC)
Chapter VII: E-Tendering
Chapter VIII: Imports
Chapter IX: Material Codification & Codification Cell, RHQ
Chapter X: Inventory Control
Chapter XI: Transport, Receipt and Inspection
Chapter XII: Custody and Issue
Chapter XIII: Non-Moving Items and Disposal of Surplus and Scrap
Materials
Chapter XIV: Implementation of Integrity Pact Program (IPP)
List of Annexure to Materials Management Manual

1
5
11
37
56

6
7
8
9
10
11
12
13
14

Annexure 1 to Annexure 12
Annexure 1: Sample format for concise NIT for Press Tenders
Annexure 2: General Purchase Conditions
Annexure 3: Guidelines for splitting of orders
Annexure 4: Guidelines for Holiday Listing of Vendors
Annexure 5: Format for Tender Opening sheet in other than etenders
Annexure 6: Checklist type format for proposal requiring approval of
Director / Chairman / Committees
Annexure 7a: Standard Price Bid Opening proposal format
Annexure 7b: Standard PO proposal format
Annexure 8: Guidelines for preparing agenda items for Board /
Committees
Annexure9: Format for letter seeking for extension of validity of the
Bank Guarantee or encashment
Annexure 10: Sample format for Fax of Acceptance
Annexure 11: Chemical Testing and Sampling
Annexure 12: Procedure for Taking & Handing over Project Spares &
Leftover materials

58
59
65
80
82
85
93
97
103

CHAPTER - I
INTRODUCTION
The responsibility of the Materials Department shall be to ensure that the right materials in
the right quantity are procured from the right source at the right price and delivered in the
right condition at the right place at the right time.
1.1.

General Outline of the Materials Management Manual

1.1.1. The Materials Management manual has the approval of the Director (Refineries).
1.1.2. The Materials Management manual outlines the policies and procedures for carrying
out the Purchase, Stores and Inventory Control functions falling under the purview of
the Materials Department.
1.1.3. Circulars / guidelines on modification in these policies and procedures shall be issued
by Finance Department at Refineries Head Quarters, New Delhi.
1.1.4. Future Circulars relevant to the Materials function shall be incorporated from time to
time
and
the
updated
manual
will
be
available
online
at
http://10.18.64.116/admin/CircularFormsImgs/31112013121157_Materials_Manual.
pdf (present location, which may change at a later date). The authority to
incorporate such circulars in the manual shall be Finance Department at Refineries
Head Quarters, New Delhi.
1.1.5. Any deviation to the manual, if deemed necessary in the interest of operation, shall
be taken from the Unit Head with Finance concurrence. All such deviations shall,
however, be brought to the notice of Materials Department at Refineries Head
Quarters for review and suitable incorporation in the manual. In case, for some
reason, the deviation accepted by Unit is not approved for incorporation in the
manual, such deviation shall still be deemed as accepted for the particular case
against which it was approved.
1.1.6. All expenditure incurred on procurement of materials, capital or revenue, is to be
regulated in accordance with the procedure prescribed in this manual.
1.1.7. This manual shall be read in conjunction with the Delegation of Authority. Wherever
there is a conflict between this manual and the DOA, DOA will prevail.
1.1.8. Any discrepancy noted in the MM manual shall be brought to the notice of RHQ
Materials.
1.2.

General Outlines of Procurement Procedure

1.2.1. Tenders requiring issuance of Purchase Order for supply of materials including
associated services, if any, can be issued only by the Materials Department.
1.2.2. The power to sanction expenditure in respect of procurement is subject to provision
in the approved budget.
1.2.3. No expenditure on procurement can be incurred unless the work is administratively
approved, budget is available and a detailed estimate is prepared, checked and
concurred by Finance as per Delegation of Authority and approved by the authority

empowered to do so. Indenting Department shall be responsible to ensure availability

of requisite budget.
1.3.

Organizational Setup of Materials Department in Refineries Division

Materials Department in the Refineries Division is at two levels:

1.3.1. Unit Level:

Each Refinery Unit has a Materials Department, which comprises three Sections viz.
Purchase, Inventory Control and Stores.
Responsibilities include:
i.
ii.
iii.
iv.
v.
vi.
vii.
viii.
ix.
x.
xi.
xii.
xiii.
xiv.
xv.
xvi.
xvii.

Ordering of MRP and non MRP items

Follow up for timely delivery of materials
Facilitating payment by resolving disputes in the despatch documents w.r.t. PO,
if any
Stock Transfer Order creation and facilitating despatch to other Units
Transportation management
Receipt of materials
Insurance Claims and Settlement
Custody and Preservation
Issue of materials
Assist in physical verification and stock reconciliation
Inventory Management
Review of slow and non moving inventory
Identification and disposal of Surplus
Scrap Disposal
Disposal of condemned assets
Vendor registration and updation of Vendor Master
PO closure in SAP

There are 2 Port Offices in the Refineries Division, at Kolkata and Mumbai.
Responsibilities include:
i.
ii.
iii.
iv.
v.
vi.
vii.
viii.
1.3.2.

Customs Clearance of imported consignments

Lining up Rate Contracts for sea freight
Lining up Rate Contracts for air freight
Opening Letter of Credit for Refineries
Inland transportation of imported consignments from Port to Units
Lining up insurance for import consignments (other than Project consignments
dealt by RHQ PJ Materials group)
Local procurement
Procurement assistance to Units, wherever requested
RHQ Level:
Materials Department at RHQ has three major functions:

Central Procurement Cell & RHQ Materials

Responsibilities include:
i.
Procurement of items as per approved list
ii.
Lining up Rate Contracts for Units to place Call - Up Orders
iii.
Processing Unit proposals for approval of Director and above
iv.
Local procurements for RHQ / CO / Township etc.
v.
Vendor registration and updation of Vendor Master
vi.
Maintaining updated Vendor Holiday List
vii.
Coordinating agency on issuance of policy guidelines on Materials Management
viii.
PO closure in SAP
Project Materials
Responsibilities include:
Preparation of Project Procurement Procedure
Ordering of materials for conventional Projects
Processing and issuing Change orders
Assistance in preparation of Vendor Master for Projects
Request for Opening Letters of Credit for import orders
Request for EPCG License and Invalidation Letter
Coordination with Vendor for import materials despatch
Facilitating payment for import orders
Lining up special transports (like barge movement) for Over Dimensional
Consignments (ODC)
x.
Coordination with TRANSCHART for sea shipment of import project orders
xi.
Coordination with Port Offices
xii.
PO closure in SAP

i.
ii.
iii.
iv.
v.
vi.
vii.
viii.
ix.

Codification Cell
Responsibilities include:
i.
Materials Codification for Refineries Division
ii.
Liaising with Units nodal Materials Coordinator for codification
iii.
Removal of duplication in existing codes
iv.
Assisting Units in removal of codes for obsolete items
Apart from the above roles, RHQ Materials shall also function as the nodal office for
updation of Materials Management manual.
1.4.

Abbreviations Used in this Manual

CBA: Commercial Bid Analysis
CDD: Contractual Delivery Date or approved extended delivery date
CQ: Commercial Query
DOA: Delegation of Authority
DOP: Delegation of Power
EPCM: Engineering, Procurement and Construction Management - Consultants for
conventional projects
FOA: Fax of Acceptance
FIM: Free Issue Material
GPC: General Purchase Conditions
GRN: Goods Receipt Note

HOD: Head of Department defined as Officer in Grade F or an officer in Grade E

who is designated as HOD through an Office Order by Human Resources (HR)
Department for the purpose of exercising powers of an F Grade Officer under DOA.
MM Manual: Materials Management Manual
MR: Materials Requisition
MRP: Materials Requirement Planning (the term has been used interchangeably with
IC or Inventory Control)
M&I: Maintenance & Inspection Department
PBG: Performance Bank Guarantee
PBO: Price Bid Opening
PO: Purchase Order
PQC: Pre Qualification Criteria
PR: Purchase Requisition (the term has been used interchangeably with Indent)
RFA: Recommendation for award (or award proposal or purchase proposal)
RFQ: Request For Quotation (the term has been used interchangeably with Tender
Document
RHQ: Refineries Head Quarters, New Delhi
SAP: Refers to the Enterprise Resource Package (ERP) being used by IOCL
TBA: Technical Bid Analysis
TBE: Technical Bid Evaluation
TPIA: Third Party Inspection Agency
TQ: Technical Query

CHAPTER - II
ESTIMATES & PURCHASE REQUISITION
2.1 Estimates
Whenever a proposal for initiation of procurement is made, a detailed estimate on landed
cost basis shall be prepared. The cost estimate should be as comprehensive as possible to
provide yardstick of assessment of reasonability of quoted rates. It shall be ensured that no
item is included in the estimate without indicating the quantity.
2.1.1. Estimates for Non Inventory Control or Non MRP Items
For Non Inventory Control items (NIC / Non MRP), a report containing the following details
shall be attached as the face sheet of the estimate:
(i)
(ii)
(iii)
(iv)
(i)

Name of the material

Location
Total amount of the estimate
Justification for the materials procurement
Basis for rates considered in the estimate. Basis of estimate could be last PO price of
IOCL or other PSUs or Government organizations or budgetary offer or cost derived
through extrapolations. Budgetary offer not to be adopted as basis of estimation in
case of single tender procurement from the same vendor
(v) Suitable escalations shall be applied
(vi) Estimates shall be approved with Finance concurrence, wherever required by the
Competent Authority defined in the DOA
2.1.2. Estimates for Inventory Control or MRP Items
(i)
(ii)

Estimate shall be made considering either the last PO price or last Rate Contract price
All IC items estimate shall be approved by HOD, Materials Department with Finance
concurrence, wherever required as per DOA.
(iii) Suitable escalations shall be applied
2.1.3. Estimates for CPC (Central Procurement Cell procured) Items
CPC covered items are divided into two categories:
a) Where PRs are generated by separate indenting group and
b) Where PRs are generated by Materials Department.
For items covered under a) above, the estimate shall be prepared by indenting group and
methodology and approval as followed in Non MRP procurement shall be followed.
For items covered under b) above estimate shall be prepared by the Materials (CPC) group
and shall follow the methodology of MRP (IC items) estimate.
2.1.4. Estimates for EPCM procurement
through EPCM Consultant)

(Conventional

2.1.4.1. Estimates shall be prepared by Consultant.

2.1.4.2. Concurrence of estimate by IOCL Finance is not required.

Project

procurement

2.1.4.3. Basis of estimate could be last PO price of IOCL or other organizations with suitable
escalations or budgetary offer or cost derived through extrapolations or from
Consultants database.
2.1.4.4. Budgetary offer not to be adopted as basis of estimation in case of single tender
from the same vendor
2.1.4.5. Estimates shall be provided in sealed cover to IOCLs Project Engineering by EPCM
Consultant. Once approval is received for Price Bid Opening, Materials shall convey
to Project Engineering regarding estimate opening and review.
2.1.4.6. Estimate shall be opened in the presence of Finance by Project Engineering. The
same shall be reviewed by them and in case required, the Consultant shall be
asked to revise the same with justification.
2.1.4.7. Revised estimate, if any, shall again be opened in the presence of F. This shall
supersede the originally opened estimate.
2.1.4.8. Project Engineering shall give their recommendation regarding review and
acceptance of estimate to Materials.
2.1.4.9. After this the Price Bid Opening clearance shall be given to the Consultant as per
the coordination procedure agreed for the project.
2.1.5. General Notes on Estimates
2.1.5.1. Estimates shall be on landed cost basis for the purpose of administrative
approvals, EMD calculation, tendering procedure, applicability of Integrity Pact etc.
However, for the purpose of deciding the Pre Qualification criteria and price
justification, estimated cost on FOB / FOR Despatch point basis shall be
considered so that different taxes, duties and freight do not play any role in
justification and pre qualification checking.
2.1.5.2. It is the responsibility of the originating department to ensure that the estimate is
structurally and technically sound.
2.1.5.3. Wherever required as per DOA, estimate shall be sent to Finance for checking and
concurrence by the originating department.
2.1.5.4. Wherever required, the detailed estimates shall be scrutinized by Finance in
accordance with the instructions applicable. After the estimates are found to be in
order, financial concurrence shall be accorded and forwarded for administrative
approval of the competent authority.
2.1.5.5. Estimate must be approved by competent authority only. Approval by any lower
level officer on behalf of competent authority should not be resorted to unless the
concerned officer has been asked to officiate through an Office Order.
2.1.5.6. Purchase Requisition along with estimate should be raised by the indenting
department and tender should be invited and finalized by Purchase Section of
Materials Department. However, in case of MRP items, indent along with estimate
shall be raised by IC Section of Materials Department and tendering shall be done

by Purchase Section of Materials Department. For items procured by CPC, please

refer the Chapter on Central Procurement Cell.
2.1.5.7. If an estimate is based on rate analysis or contains items having rate analysis, the
rate analysis shall be concurred by F and approved by competent authority not
below the rank of HOD, before the same is taken as basis for the preparation of
any estimate.
2.1.5.8. In case of any change in technical specification, scope of work or change in tax
structure and variation in the prices of material having an impact on prices, the
estimate should be re-visited and duly concurred and approved by the approving
authority before opening of price bids. This revised estimate shall be used for
comparison of prices and finalization of the order.
2.1.5.9. The estimates received in Finance Department shall be scrutinized with reference
to the following points before according financial concurrence:
i.

That the general instructions regarding preparation of estimates have been

followed by the departments concerned.

ii.

That there is a budget provision in the approved budget for the work proposed to
be undertaken.

iii.

That proper justification for undertaking the procurement exists.

iv.

That the rates adopted for each item are duly supported by basis of estimate.

v.

That the proposal is administratively approved or is ultimately being submitted for

such approval.

vi.

That for emergency procurement, the circumstances leading to such emergency

are recorded in writing.

vii.

That the calculations shown in the estimate are arithmetically accurate. The
correctness of rates applied for taxes and duties shall be ensured.

viii.

That the DOA Clause and competent authority for approval is mentioned.

2.1.6. Escalation used during preparation of estimates / justification shall be as

per the following methodology:
2.1.6.1. Where referred PO is from an indigenous source, escalation shall be made
considering WPI (eaindustry.nic.in) / inflation. Wherever specific commodity is
known the WPI for that commodity shall be considered else generic data (under
all commodities) shall be considered.
2.1.6.2. Where referred PO is from a foreign source help shall be taken from price indices
websites like meps.co.uk (for steel), LME (for non ferrous), BLS etc. If nothing is
clearly available nominal escalation of 5% p.a. or part thereof shall be taken.
2.1.6.3. Where PO / Rate Contract is to be lined up for variable price, the estimate shall be
prepared considering the price variation formula for the material.

2.1.6.4. In case of crash / emergency requirement estimates shall be suitably loaded for
urgency
2.2

Indent / Purchase Requisition

2.2.1 All Purchase Requisitions (PRs) shall be prepared through SAP. PRs released online
through SAP shall not require signature on the PR. However, hard copies of PRs will
be sent to Materials Department for initiating any procurement action. Original
signed notes of approval of competent authority for single tender and proprietary
procurements shall be attached with the PR. The PR must specify the following:
i.
ii.
iii.
iv.
v.
vi.
vii.
viii.
ix.
x.
xi.
xii.
xiii.
xiv.
xv.
xvi.
xvii.
xviii.
xix.

Material Code Number

Budget head
Estimated cost
Specifications of material required with adequate number of drawings, specifications/
data sheets, wherever necessary.
Quantity to be procured
Special packing requirement wherever necessary
Scope of inspection where pre dispatch inspection is required. Normally all the M&I
approved TPI agencies shall be considered for each tender unless a limited list is
specified.
Delivery period required (Indicative / Specific).
Details of previous PO, if any or First Time Purchase certificate
In case of first time purchase, indicative vendor list with approval in case limited
tendering has to be done
End use of the items indented
Technical Pre-Qualification criteria to be issued in the NIT / tender document in case
of Open tender
Justification for the procurement
Requirement of samples, catalogue, test certificates, guarantee certificates etc.
Seeking information related to loss control such as MSDS / Shelf Life
Technical evaluation / Technical loading criteria (if any)
Non Disclosure Agreement, if any
In case of chemicals / catalysts sample testing, final testing on receipt, assay
methodology
Check for surplus availability of required materials in other plants including usability
and indicate the same in PR. For such sparable and usable items in other Units,
Stock Transfer Order (STO) shall be raised by Materials Department. STOs shall be
created by the Inventory Control or any other assigned Group.
It is advisable for Materials Department to provide a Check List to the indenting
departments for attaching with the PRs to ensure that all requirements for raising the
PR have been met.

2.2.2 PR for Inventory Control Items (IC Items / MRP Items)

2.2.2.1

Inventory control items are items with repetitive requirement for which inventory
levels (Re-order Level, Re-order quantity etc) have been fixed and the
responsibility of raising PRs, procurements, stocking and supply to the consuming
departments rests entirely with the Materials Department. Details about
Inventory Control items are given later in this manual in the Chapter on
Inventory Control.

2.2.2.2

Purchase Requisition for IC items are to be approved by HOD of Materials

Department.

2.2.2.3

Purchase Requisition for IC items required for any special jobs / shutdown should
be prepared by User Department and approved by competent authority and sent
to Materials Department. Such PRs should be routed through the IC Section who
shall forward it to the Purchase Section for taking procurement action.

2.2.3 PR for Non Inventory Control Items (NIC Items / Non-MRP Items)
2.2.3.1

All items other than the IC items are Non-Inventory Control items. User
Departments shall raise PR through SAP and shall forward to Purchase Section of
Materials Department with the approval of competent authority.

2.2.3.2

PRs for medicines and hospital items should also be raised through SAP by
hospital.

2.2.3.3

PR for vehicles, office equipments, stationery & printing, furniture, uniform,

canteen / welfare requirements shall be raised by Administration Department.

2.2.3.4

PR for periodicals, books and magazines shall be raised by the Department under
which Library functions but through SAP only.

2.2.3.5

Computer hardware / software (except stationery items) to be indented by IS

Department. However, if such PRs are raised by User Department, the same shall
be endorsed by HOD, IS Department.

2.2.3.6

Approving authority for Purchase Requisition for Non Inventory Control (NIC)
items shall be as under (ref: Finance Circular no F/12/014 dated 04.07.2008)
Value
Approving Authority
Upto Rs. 5 Lac
HOD of Indenting Department
More than Rs. 5 Lac and upto Rs 25 Lac
DGM of Indenting Department
More than Rs. 25 Lac
GM / ED of Indenting Department
Note: Finance release in SAP (i.e. Finance concurrence) shall be required for PRs
with estimated value exceeding value limit indicated in DOP for estimate
concurrence

2.2.3.7

Concurrence for PR which consists of both materials and services, has to be made
in line with guidelines applicable to materials PR

2.2.4 PR for EPCM based project procurement

IOCLs Project Engineering shall provide PR in SAP to Materials within 7 days of submission
of Recommendation for Award (RFA). This SAP PR is not required to be approved and
considered only as regularization PR. This shall be used by Materials to create SAP Purchase
Order.

2.3

Proprietary Items

2.3.1.1

Procurement of any spare from the original vendor or the original manufacturer
of the sub assembly / component shall be deemed as a proprietary purchase.
Apart from this, where the User Department is of the opinion that there is no
technically feasible alternative but to procure the material from a particular single
source, such items shall be considered as proprietary.

2.3.1.2

List of proprietary catalysts and additives shall be compiled by RHQ Technical in

coordination with Refinery & Petrochemical Units and got approved from Director
(R) for the entire division with Finance concurrence every year.

2.3.1.3

List of all proprietary items except those mentioned above in Cl. 2.3.1.2, shall be
approved by GM of the User Department with Finance concurrence every year for
addition / deletion / no change.

2.4

Tendering when
procurement

budget

has

not

been

approved

in

case

of

Capital

Where budgets have not been approved but in view of urgency a need is felt to
initiate tendering prior to budget approval, the indenting department shall take
specific approval for initiating procurement action pending budget approval. Approval
note shall give justification for tendering without budget and approving authority
shall be Unit Head. SAP PR shall be prepared by using the investment scale that
blocks creation of SAP PO.
In such cases only technical bids shall be opened and evaluated prior to budget
approval. Price Bids shall be opened only after approval of budget. Indenting
Department shall mention the likely date of budget approval to the Materials
Department for seeking appropriate validity. Validity of not more than 6 months shall
be asked in such cases initially.
The tender documents should state that on any account, in case bids have to be
revalidated before PBO beyond the originally sought validity, the same may be
allowed with or without change in prices. However, IOCL reserves the right to cancel
such tender and refloat the same.
Such price implications may be allowed only with the approval from HOD of Materials
Department with justification. However should the situation warrants, the tender can
be cancelled and refloated with approval from competent authority.
2.5

Closing of open PRs in SAP: PRs for items dropped for procurement to be closed in
SAP by the respective Indenting Department.

10

CHAPTER - III
INVITATION & RECEIPT OF TENDERS
3.1.

Tender Document

3.1.1. Materials Department (Purchase Section) shall generate enquiry / Request for
Quotation (RFQ) document through SAP for issuance to the prospective bidders.
3.1.2. In case of press tenders and complex items, detailed tender documents shall be
prepared preferably with the following list of documents, which is illustrative only:
i.
ii.
iii.
iv.
v.
vi.
vii.
viii.
ix.
x.
xi.
xii.
xiii.
xiv.
xv.
xvi.
xvii.
xviii.
xix.
xx.

Index
Notice inviting tenders / Letter inviting tender with PQC and EMD requirement
Covering letter for tender
General Purchase Conditions & Formats for Bank Guarantees
Technical specifications along with technical evaluation and loading criteria
Quality Assurance Plan
Time schedule
General instructions to the bidder
Special instructions to the bidder (SITB)
Agreed Terms and Conditions (ATC)
Price Schedule format for materials supply, site services, site work, AMC, mandatory,
commissioning and O&M spares, training, taxes, duties and freight
List of Board of Directors (or reference link to web address may be given)
Format for declaration of Holiday List
Integrity Pact Agreement
Commercial Evaluation & Loading Criteria
Deviation List proforma separately for commercial and technical.
Proforma for contact details of bidder (normally a part of the ATC)
Proforma for Permanent Establishment Certificate, Permanent Account Number (PAN)
issued by Indian Authority and Tax Residency Certificate, Form 10 F (for Foreign
bidders, in case site activities are also involved)
Bank Mandate details
In case of e-tendering bidder shall declare: The bidder declares that none of the edocuments have been tampered with. In case of tampering of e-documents, the bid
shall be rejected outright and EMD forfeited without prejudice to any other rights or
remedies available to IOCL.
Standard commercial tender document shall be developed by Materials Department
and approved by the HOD of the Materials Department as a one-time exercise for
open and complex tenders. Any changes to the standard documents shall be
approved and changed in the standard documents.
Any deviations proposed in the tender document w.r.t. General Purchase Conditions
(GPC) and evaluation methodology indicated in this manual shall be concurred by
Finance and approved by GM.

11

3.2.

Tendering In case of EPCM based project procurement

3.2.1. General Commercial Tender Document (including Special Instructions to the Bidder,
ATC, GPC, General Notes, covering letter, evaluation, loading methodology, Price
Format etc.) shall be provided by Materials to the Project Coordinator. This
document shall be prepared by Materials, concurred by Finance and approved by an
officer not below the rank of GM heading Materials function.
3.2.2. This shall be a one-time exercise for the complete project. Unless written
instructions are received from Materials, the Consultant shall not be allowed to
change these tender documents and use the same for all Tenders for the Project.
Price Format shall be suitably modified from case to case basis but any major
changes in the same shall again require IOCLs approval. However, unless changed,
individual tenders shall not be sent to Materials for approval of commercial portion.
3.2.3. Revisions, if any, arising out of circulars, change in interest rates, policies etc. shall
be communicated to Project Coordinator with copy to Consultant and Finance.
Correspondence over e-mails shall be acceptable.
3.3.

Notice Inviting Tenders

The detailed notice inviting tenders shall contain the following particulars:

i.
ii.
iii.
iv.
v.
vi.
vii.
viii.

Name of the item

Amount of earnest money to be deposited by the bidders
Place and date for sale of tenders
Due date, time and place for submission and for opening of tenders
The authority with whom tender should be submitted (in case of physical tenders)
Instruction that the offer shall be sealed and super scribed with tender number and
details of tender and the due date of opening (in case of physical tenders)
The notice will contain a provision with regard to the right to reject any or all of the
tenders or any part of a tender so received without assigning any reasons
Pre-Qualification criteria
The concise version of NIT should be published in the newspaper requesting bidders
to visit our website for detailed NIT and complete documents / details. A sample
format for concise NIT for Press Tenders is placed at Annexure - 1

3.4.

Pre Qualification Criteria

3.4.1. Financial Criteria

The annual turnover of the bidders during any of the preceding three financial years
should be at least 60% of the annualized estimated value of procurement under
consideration where completion period is more than a year.
In other cases, where the completion period is upto a year, the annual turnover of
the bidders during any of the preceding three financial years should be at least 60%
of the estimated value of the procurement.

12

3.4.2. Commercial Experience Criteria

For experience, the order(s) executed by the bidder, during the last five years ending
on the last day of the month immediately preceding the month in which the last date
of bid submission falls, should be considered as under:
Three completed orders of similar item each costing not less than the amount equal
to 30% of the estimated cost
OR
Two completed orders of similar item each costing not less than the amount equal
to 40% of the estimated cost
OR
One completed order of similar item costing not less than the amount equal to 50%
of the estimated cost
Similar item to be defined by the Indenting Department.
Estimated cost for this purpose shall be as defined in Cl 2.1.5.1 of this manual.
3.4.3. General notes on Pre Qualification criteria
3.4.3.1.

The pre qualification criteria indicated above can be modified for specific cases,
after recording reasons, with Finance concurrence and the approval of GM.
Prescribed criteria should form part of NIT.

3.4.3.2.

If more than one agency is to be lined up, pre qualification criteria shall be
calculated based on the maximum amount of order to be awarded to any single
agency.

3.4.3.3.

In case of requirement of any technical pre qualification criteria, the same shall
be got approved from an authority not below GM of Indenting Department.

3.4.3.4.

In case there is a specific technical experience criteria which is directionally

meeting the commercial experience criteria specified in Cl. 3.4.2 above then
there will be no need to have a separate commercial experience criteria (given in
Cl. 3.4.2 above) and approval for the same shall be taken from GM giving
reasons and with due vetting of Finance.

3.4.3.5.

Indenting Department shall ensure that the technical pre qualification criteria,
like membership of any body or institution should not create any discrimination
or restriction for any bidder(s) with regard to eligibility even though they
otherwise satisfy all the technical / statutory requirements.

3.4.3.6.

The criteria once fixed should not be relaxed or changed.

3.4.3.7.

In case a foreign bidder submits any of the Pre Qualification support documents
in any language other than English, then it will be the responsibility of such
foreign vendor to also provide the English translation copy of the same duly
certified, stamped and signed by their Local Chamber of Commerce.

13

3.4.3.8.

For fulfilling the commercial experience criteria any one of the following
documents may be considered as valid proof for meeting the criteria:
(i)

Purchase Order copy along with Invoice(s) with certification that supplies
against the invoices have been executed.
(ii) Purchase Order copy along with Bank Certificate indicating payment against
the PO
(iii) Execution certificate by client with order value
(iv) Goods Receipt Note (GRNs) in case where IOCL is a client
(v) In case any other document is submitted by bidder in support of execution,
the same shall be properly checked by the concerned officers before
acceptance.
3.4.3.9.

For fulfilling the financial criteria, normally an audited balance sheet of the bidder
shall be considered as acceptable proof. Published Annual report shall also be
acceptable.

3.4.3.10. In case the balance sheet is available in the public domain the same shall be
accepted.
3.4.3.11. The requirement for submission of audited financial statement is sometimes not
accepted by some foreign bidders due to their internal / local regulation
(particularly in case such bidders are subsidiaries of other foreign company).
Instead of this they prefer to submit CEO / CFO certificate (the parent company
for itself or for its subsidiary) for their turnover or the financial statement.
In such case CEO / CFOs certificate in original from the company or from the
parent company (in case bidder is a subsidiary) stating the turnover of the
bidding entity along with a declaration that the bidding company is not in a
position to submit its financial statement as per the local / internal regulation
(clearly specifying the applicable regulation) with an endorsement by Chartered
Accountant / Statutory Auditor / Certified Public Accountant (not being an
employee or a Director or not having any interest in the bidder(s) company /
firm) may be accepted.
Wherever Chartered Accountant / Statutory Auditor / Certified Public Accountant
(not being an employee or a Director or not having any interest in the bidder(s)
company / firm) is not in a position to endorse such CEO / CFOs certificate due
to local regulations, CEO / CFOs certificate in original without endorsement may
be accepted provided a reference of the local regulation restricting this
endorsement is given in the CEO / CFO certificate.
3.4.3.12. Similarly in case where the bidder cites the reasons of Non Disclosure Agreement
(NDA) for its inability to submit necessary documents in support of meeting the
experience criteria, a certificate, in original, certifying all the required
information, issued by CEO / CFO of the company along with a declaration that
the bidding company is not in a position to submit the required documents owing
to the NDA with an endorsement by Chartered Accountant / Statutory Auditor /
Certified Public Accountant (not being an employee or a Director or not having
any interest in the bidder(s) company / firm) may be accepted.

14

Wherever Chartered Accountant / Statutory Auditor / Certified Public Accountant

(not being an employee or a Director or not having any interest in the bidder(s)
company / firm) is not in a position to endorse such CEO / CFOs certificate due
to local regulations, CEO / CFOs certificate in original without endorsement may
be accepted provided a reference of the local regulation restricting this
endorsement is given in the CEO / CFO certificate.
3.4.3.13. A Company (bidder) shall not be allowed to use the credentials of its parent or
any group company to meet the Experience Criteria.
3.4.3.14. The bidding document shall clearly specify the following:
(i) Submission of authentic documents is the prime responsibility of the bidder.
(ii) Wherever IOCL has concern or apprehension regarding the authenticity /
correctness of any document, IOCL reserves the right of getting the
documents cross verified from the document issuing authority.
3.4.3.15. Notwithstanding any other condition / provision in the tender documents, in case
of ambiguity or incomplete documents pertaining to PQC, bidders shall be given
only one opportunity with a fixed deadline after bid opening to provide complete
and unambiguous documents in support of meeting the Pre Qualification Criteria.
In case the bidder fails to submit any document or submits incomplete
documents within the given time, the bidders tender will be rejected. This
provision shall also be incorporated in the tender documents.
3.4.3.16. The responsibility of checking and verifying the Technical Experience criteria shall
lie with the Indenting Department and shall form part of the technical
recommendation. Similarly the responsibility of checking and verifying the
Financial criteria and Commercial Experience criteria shall lie with the Materials &
Finance Departments and shall form part of the Price Bid Opening (PBO) proposal
and Recommendation for Award (RFA). In case of commercial experience criteria
if any clarification is required w.r.t. similar item the same may be sought from
Indenting Department.
3.4.3.17. In case of Rate Contracts lined up by Central Procurement Cell (CPC) commercial
experience and financial criteria shall be based on total contract value divided by
the number of quarters for which the Rate Contract is being lined up.
3.5.

Earnest Money Deposit

Earnest Money Deposit is prescribed with a view to ensure that the bidder / vendor does not
fail to honour the tender /offer terms. The amount of earnest money shall be fixed on the
following lines (ref. Finance Circular no F/12/018 Dated 06/10/2008):
Amount of EMD

Estimated Tender Value

Up to Rs. 5 Lakh
From Rs.5 Lakh to Rs.500 Lakh
From Rs.501 lakhs to Rs.2500 Lakh
Above Rs.2500 Lakh

Nil
1%
Rs.5 Lakh plus 0.5% on additional value of
Tender over Rs.500 lakh
Rs.15 lakh plus 0.25% on additional value
of Tender over Rs.2500 lakh

15

3.5.1. If EMD amount is upto Rs. 1,00,000.00, EMD shall be accepted in the form of a Pay
Order or Demand Draft or through Electronic Clearance System (ECS). In case of
ECS, the details of the deposit (Name of the Bank, Transaction details etc.) shall be
furnished by the bidder in the technical offer.
3.5.2. If EMD amount is more than Rs. 1,00,000.00 EMD shall be accepted in the form of
Demand Draft / Pay Order / Banker Cheque or Bank Guarantee or through Electronic
Clearance System (ECS). In case of ECS, the details of the deposit (Name of the
Bank. Transaction details etc.) shall be furnished by the bidder in the technical offer.
Validity of BG in lieu of EMD shall be 3 months beyond bid validity.
3.5.3. EMD is not required in case of:
3.5.3.1. Purchase of spares / critical equipment of proprietary nature from original
equipment manufacturers / distributors / sole agents / authorized dealers on Single
tender proprietary item basis.
3.5.3.2. In Limited Tender Enquiries with estimated values upto Rs. 50 Lac.
3.5.3.3. Micro & Small Enterprises (MSE) registered with agencies as mentioned later in this
manual in the Chapter on MSE vendors, only for the items for which the MSE is
registered.
3.5.3.4. Government organization & Public Sector Undertaking of the Central / State
Government
3.5.3.5. JV companies of IOCL
3.5.4.

In case of foreign bidders, the EMD shall be in equivalent US Dollar. Based on

authorization by foreign bidder, their Indian associates may be allowed to submit
EMD in INR in form of only Demand Draft / Bankers Cheque. This shall be a part of
tender terms.

3.5.5.

EMD from the foreign bidder shall be obtained in the form of Demand Draft / Bank
Guarantee / ECS / wire transfer. SWIFT and bank details of IOCL shall be
mentioned in the tender to facilitate ECS / wire transfer.

3.5.6.

In case where more than one agency is to be lined up, EMD shall be calculated
based on the maximum amount of order to be awarded to any single agency.

3.5.7.

Offers received without EMD as per tender requirement shall be liable for rejection.
In cases where the rejection on account of non submission of EMD is resulting in 2
or less offers; bidder(s) who have not submitted EMD, shall be given only one
chance to submit EMD within a given deadline.

3.5.8.

If required and there are sufficient reasons for the same, approval for EMD waiver
shall be taken from the Competent Authority for approval of tender as per DOP but
not above the rank of GM. This shall be done at the time of tendering.

3.5.9.

Release of EMD: Following shall form part of the tender documents:

16

3.5.9.1.

EMD of bidders disqualified during techno-commercial bid evaluation shall be

released immediately after approval of Price Bid Opening.

3.5.9.2.

EMD of bidders qualified in the techno-commercial bid but unsuccessful in the

price bid stage shall be released immediately after final approval of the ordering
proposal by the competent authority.

3.5.9.3.

EMD of the successful bidder shall be released after receipt of an acceptable PBG.

3.5.10. Forfeiture of EMD: Following shall form part of the tender documents:
Earnest Money shall be forfeited in the following circumstances:

3.6.

i.

In case the bidder alters / modifies / withdraws the bid suo-moto after opening the
bids (Technical bids in case of two bid system) within the validity period. In such a
case, the tender submitted by the bidder shall be liable for rejection.

ii.

In case the tender is accepted and the vendor fails to deposit the PBG or to
execute the contract within the stipulated period.
General Purchase Conditions (GPC)
An approved General Purchase Conditions (GPC) shall be applicable in case of
purchase tenders (for the present GPC please refer Annexure 2). The GPC shall be
made available in the web site also. GPC may be reviewed from time to time.

3.7.

Special Technical Conditions

3.7.1. Special Conditions pertaining to technical part, if any, shall be drafted by the
Indenting Department taking into consideration the special requirement and shall
usually indicate evaluation criteria, safety, health & environment requirements, and
other special formalities required to be considered / complied with by the bidder
while submitting offer and / or after award of purchase order.
3.7.2. Special technical conditions having commercial implication like technical loading
shall be included in the tender document after indenting department takes approval
of the same from an authority not below the rank of GM.
3.7.3. The following penalties may also be considered with a view to improve the safety
aspects of execution of POs involving site work based on the job requirements:
Penalties for Violation / Non-adherence of safety procedures and practices:
1. Violation of applicable Safety, Health and Environment related norm a penalty of
Rs.5,000.00 per occasion
2. Violation as above resulting in any physical injury, a penalty of 0.5% of the contract
value (maximum of Rs.2,00,000.00) per injury in addition to Rs.5,000.00 per
occasion as in item 1.
3. Fatal accident, a penalty of 1% of the contract value (maximum of Rs.10,00,000.00)
per injury in addition to Rs.5,000.00 per occasion as in item 1.

17

3.7.4. The vendor should be advised to take appropriate insurance policy for the effective
implementation of the above penalty provision.
3.7.5. In case of accidents depending on the seriousness of injury etc. in addition to the
hospitalization / treatment charges and group insurance amount, compensation shall
be paid by the vendor to the affected person / his family members in presence of
Engineer-in-charge as per Workmen Compensation Act.
3.8.

Other miscellaneous points

3.8.1. Tender document should contain a clause indicating that any legal dispute shall be
within the jurisdiction of local court of the Purchasing Office / Authority.
3.8.2. The technical specifications of the procurement shall be prepared by the User /
Engineering Services / Technical Department to indicate the tolerance, applicable
standards and specifications conforming to the procurement.
3.8.3. Consortium bids shall not be normally accepted unless specific approval of GM has
been taken by indenting department due to nature of job. In such case, Pre
Qualification Criteria and Umbrella Agreement between the consortium partners shall
be prepared and approved by indenting department. The same shall be included in
the tender document with F Concurrence. Tender document should contain a clause
indicating acceptance / non acceptance of Consortium bids.
3.8.4. The NIT should contain a clause that IOCL reserves the right to allow purchase
preference to MSEs as per Government policy and to JV Companies as per IOCL
policy in vogue. Provisions relating to purchase preferences and royalty inflow (in
case of IOCL R&D formulations) should be specified in the NIT. For the purpose of
Purchase Preference, the total net of cenvat landed cost of the lowest bidder (s) shall
be considered to decide applicability of the Purchase Preference and not the
estimated value of the tender. Purchase preference is to be given in respect of 102
medicines produced by IDPL (ref Finance Circular F/12/16 dated 29.07.2008).
3.8.5. The following conditions are to be incorporated in NIT / Tender documents for
conventional tenders invited through www.indianoiltenders.com
3.8.5.1. Bidders are advised to download the documents from Indian Oil website i.e.
www.indianoiltenders.com, after due registration. This is to ensure that the bidder
downloads proper / complete tender documents. This also enables the bidder to visit
the website for any corrigendum / correction which is essential for submitting proper
tender. However, tenders from bidders who have not downloaded the documents
from IOCL website may also be accepted, provided the bidder submits the EMD along
with the Techno Commercial Bid. Such Bidders are also advised to visit the official
website from time to time for any corrigendum or correction. Failure of bidder to
submit tenders without taking cognizance of corrigendum / amendment issued by
IOC are liable for rejection.
3.8.5.2. Bidders submitting documents downloaded from other than official website should
give an undertaking to the effect that they shall abide by all the terms and
conditions as per documents hosted in official website, should there be any
discrepancy observed in the submitted tender, at a future date. Also they should
undertake to agree for all decisions confirmed in pre-bid meeting, if any, conducted
by IOCL irrespective of whether the bidder attended the same or not. A standard

18

undertaking in this regard may be included as a part any declaration that is

normally obtained from the bidders.
3.8.5.3. It is also clarified that the above is not applicable for e-tendering
3.8.6.

Sufficient time shall be allowed for the bidders to submit their tenders from the
date of issue of tender notice. The following timetable may be adopted for the
purpose of issue of tenders.
Nature of Tender

Limited - Only Indian bidders for non package / non

equipment purchase
Limited - Global bidding (all cases) and for packages /
equipments (all cases)
Open Only Indian bidders for non package / non
equipment purchase
Open - Global Tender (all cases) and for packages /
equipments (all cases)

Minimum Time Period

(e-tender / physical
tender)
2 weeks / 3 weeks
3 weeks / 4 weeks
3 weeks / 4 weeks
4 weeks / 5 weeks

Based on the circumstances of each case, time limit may be modified by taking
approval of HOD of Materials Department.
3.8.7. Where delivery is of prime consideration, the maximum delivery period should be
indicated in tender clearly indicating that offers not meeting the delivery requirement
shall be rejected. In other cases indicative delivery period shall be given in tender
and bidders shall be asked to quote their best possible delivery.
3.8.8. In case where an order has been placed on the ground of early delivery on other
than lowest basis, a special delivery clause besides the GPC to be incorporated in
the Purchase Order indicating that delivery period is the essence of the Purchase
Order and for failure on the vendors part to complete supplies within the specified
contractual delivery period, the vendor shall be liable to pay to the Corporation the
difference over the rates of the lowest acceptable tender along with the price
adjustment on account of delayed delivery in accordance with IOCL GPC. This can be
operated only after taking the bidders consent and shall be added in the PO.
3.8.9.

The bidder shall be asked to quote in words and figures for packages and
equipments. For bulks and tagged instruments running into more than 10 line
items, only rates in figures shall be taken. In case of a conflict between figures and
words, value indicated in words shall prevail. Total amount need not be asked to
avoid the possibility of mathematical error creeping in.

3.8.10. Wherever applicable, tender document should stipulate the treatment of the
Statutory Duty Variation viz. Excise Duty / Sales Tax / VAT / Service Tax, Works
Contract tax and FE Variation as per details given below:
Excise Duty / Sales Tax / VAT / Service Tax will be paid / reimbursed extra at actual
within the contractual delivery date. Any increase in the rates of Excise Duty and
Cenvatable Service Tax beyond the CDD [contractual delivery date or approved
extended date] will be borne by IOCL to the extent Cenvatable documents are
passed on to IOCL and IOCL is in a position to get the CENVAT claim from the

19

Excise authorities. The benefit of any reduction beyond CDD must be passed on to
IOCL.
In case of Sales Tax / VAT and other non Cenvatable taxes / duties any increase
beyond the CDD shall be borne by the vendor but reduction shall be passed on to
IOCL.
3.8.11. Customs Duty rate variation can be agreed subject to the following conditions:
CIF value should be indicated in the offer. Materials to be imported covering the
above CIF value should also be clearly spelt out. The rate of Customs Duty and the
Tariff Number under which the item is covered should be clearly spelt out.
Any increase in price due to increase in Customs Duty rates beyond two thirds of
the CDD in respect of items which require further fabrication after import and for
bought out imported items beyond the CDD, will be to vendors account. Increase in
Counter Veiling Duty (CVD) portion of Customs Duty can be reimbursed to the
vendor to the extent Cenvatable documents are passed on to IOCL and IOCL is in a
position to get the Cenvat claim from Excise authorities. However, any decrease in
the prices due to decrease in Customs Duty rate at the time of actual clearance of
imported materials, shall be passed on to IOCL. For all such claims necessary
documentary evidence shall be provided by the vendor to IOCL along with their
claim request.
3.8.12. FE variation shall normally not be allowed. In (global tenders) cases where Foreign
Exchange (FE) involvement is envisaged, tender documents shall contain a clause
indicating that in case the bidders are quoting for FE rate variation, the details of
item wise maximum CIF value (indicating quantity) of each currency should be
indicated in the offer. This list shall be vetted by the indenting department / PMC at
the time of giving technical recommendation to the effect that the listed items are
required for the tendered material.
Any increase in price due to increase in FE rates beyond two thirds of the CDD in
respect of items which require further fabrication after import and for bought out
imported items beyond the CDD, will be to vendors account. However, any
decrease in the prices due to decrease in FE rate at the time of actual clearance of
imported materials, shall be passed on to IOCL. FE variation shall also include
recovery if the actual exchange rate is less than the quoted rate.
While seeking the maximum CIF value in the tender documents, the bidder shall be
asked to separately indicate the imported bought out items and their maximum CIF
value. In case order stipulates FE variation clause, the vendor shall furnish Bill of
Entry documents along with the invoice and raise invoice accordingly.
3.8.13. In case of any variation in tax or duty rate or introduction of new tax / duty after
submission of bid, the offers shall be evaluated considering the rate / tax / duty as
applicable on the date of price bid opening.
3.8.14. In case any new tax / duty is introduced after placement of order but within the
contractual delivery period the same shall be to IOCLs account against submission
of relevant documents.

20

3.8.15. If advance is to be given, it should be expressly stated in the Tender documents,

indicating the amount clarifying whether it is interest free or interest bearing, rate
of interest, and submission of BG of equal amount. Tender document should clearly
indicate the payment terms applicable and also state that in case bidders take
deviations to the specified payment terms, loading for interest implication shall be
done. This loading shall be indicated in the tender document as equivalent to 1%
(one percent) per annum above the Cash Credit Rate of IOCL with the State Bank of
India.
3.8.16. Tender document should contain a clause for forfeiture of EMD and debarring future
enquiries as per applicable procedure.
3.8.17. Intention of splitting the contract
3.8.17.1. Splitting of orders shall be done as per guidelines vide CO/PAG/23 dtd
15.03.2000(Annexure-3).
3.8.17.2. Approval of Unit Head shall be taken in all cases where tender is to be issued with
splitting of quantity.
3.8.17.3. In the event no bidder is willing to match the price of the lowest bidder then the
balance quantity shall be re-tendered including the lowest bidder against the
earlier tender.
3.8.17.4. Further splitting of leftover quantity, if required, will also require approval of
competent authority as defined above.
3.8.18. It should be ensured that pre-qualification criteria, performance criteria and
evaluation criteria are incorporated in the bid document in clear and unambiguous
terms as these criteria are very important to evaluate bids in a transparent manner.
In order to avoid confusion and to provide transparency in the bid evaluation, a
clear cut pre-qualification criteria, performance criteria and evaluation criteria
should be decided and the same should be included in the tender documents.
Evaluation criteria should include all commercial condition generally put forward by
the bidders and loading procedure should be specified in the tender document.
3.8.19. Indenting Department shall ensure that PR is raised only after completion of
detailed engineering with unambiguous and firm technical specifications, PQC and
technical evaluation criteria etc. so as to avoid issue of amendments and seeking
revised price bid from bidders.
3.8.20. The terms of the contract shall be precise and definite and there shall be no room
for any ambiguity or misconstruction thereof.
3.8.21. No condition involving uncertain or indefinite liability or of unusual nature shall be
incorporated.
3.8.22. Further, third party inspection shall be carried out for procurement of equipment /
materials wherever necessary.
3.8.23. A clause should be inserted in all tender documents whereby the bidder is required
to state Whether any of the Directors of BIDDER is a relative of any Director of
IOCL or the BIDDER is a firm in which any Director of IOCL or his relative is a

21

Partner or the BIDDER is a private company in which any director of IOCL is a

member or Director.
3.8.24. Wherever no deviation is desired from the specific terms and conditions, the bidders
should be informed in the tender documents itself that their offer shall be rejected if
they take deviations.
3.8.25. Tender document should contain a clause that advance payments, if any as per
tender conditions, shall be made against bank guarantee only. Standby LC shall also
be acceptable in lieu of Advance Bank Guarantee and Performance Bank Guarantee.
3.8.26. Tender documents should contain the clause indicating the bidders to quote
competitive prices considering the fact that price negotiations, if required, to be
held with the lowest bidder only.
3.8.27. Tender document should contain a clause seeking acceptance of IOCLs GPC.
3.8.28. The tender document should cover owners intention of availing Cenvat benefit
against ED / CVD / Service Tax. Evaluation of bid shall be done after taking into
account the Cenvat benefit available. Necessary details required from the bidders
should be specified in the tender document.
3.8.29. The tender document should stipulate wherever site work is involved, the provision
regarding water and power availability at the site and whether the same shall be
provided free of cost or at cost. Rate chargeable, if any, should be specified. All
these shall form part of the technical portion of the tender document.
3.8.30. Tender document should contain a clause stating that cutting and corrections in the
bid document should be avoided and if it is unavoidable, it should be kept at the
bare minimum and it should be neatly cut and re-written without over-writing and
use of erasing fluid. All corrections should be duly signed by the bidder. Use of
white / erasing fluid is not allowed. IOCL reserves the right to accept or reject the
offer either in part or full wherever white / erasing fluid is used.
3.8.31. Tender document should contain a clause indicating that the bidders should respond
to the tender either by submitting their bids or by explaining the reasons for nonsubmission of the offer.
3.8.32. Tender document shall categorically state the incentives applicable to manufacturers
offering the items based on IOC R&D formulations to the extent of royalty inflow net
of prevailing taxes / surcharges, if any (to be mentioned) which will be deducted
from the quoted price of such Vendors. To facilitate this, the tender document
should contain suitable provision for the Vendor to declare that the offered item is
based on IOC R&D formulation and the agreement of royalty payment with IOC is
valid.
3.8.33. Tender document should seek information from bidders regarding power
consumption of the equipment to be installed by them along with other technical
details, and operating cost of the plant, wherever required, in case loading to be
done for the variation in power consumption, and operating cost. The basis of
evaluation including the rate power to be spelt out in the tender documents. All
these shall form part of the technical portion of the tender document

22

3.8.34. Tender document should contain a clause that in case of involvement of foreign
Vendors, tenders can be submitted either by the Vendor directly or through their
Indian Agent / representative on behalf of them, but not both. The Indian Agent /
representative should represent only one Vendor and he should not be allowed to
quote on behalf of another Vendor for the same tender.
3.8.35. Standard specification for each type of job should be developed to the extent
possible. Uniformity shall help the bidders in understanding the specifications and
will lead to avoidance of queries and clarifications later.
3.8.36. Tender document should stipulate that tendering can be abandoned without
assigning any reason. No compensation shall be paid for the efforts made by the
bidder.
3.8.37. Tender document should stipulate that IOCL reserves the right to reject, accept or
prefer any tender or to abort the bidding process without assigning any reason
whatsoever.
3.8.38. Tender document should stipulate that although normally the lowest responsive bid
amongst the bids submitted by bidders and considered by IOCL to be qualified and
competent shall be preferred, IOCL reserves the right not to accept the lowest bid if
in its opinion this is not in the interests of IOCL.
3.8.39. However, it shall be ensured by IOCL that any rejection, acceptance, preference etc.
is done only after thorough evaluation and there are ample and unambiguous
reasons for the same.
3.8.40. In order to compare prices and to avoid placement of order at higher cost on
agents, attempt should be made to obtain quotation from Original Equipment
Manufacturers (OEMs) also in addition to their authorized agents at the time of
floating of enquiries for the procurement of spares for proprietary equipments.
3.8.41. Procurement tenders shall be invited and award proposals raised only by officers of
Materials Department.
3.9.

Methods of Tendering

Generally procurement of materials and associated services, if any, shall be made by any of
the following modes of tendering:

Open Tender (Press tender: National or Global)

Open Tender (non Press)
Limited Tender
Single Tender

3.9.1. Open Tender (Press Tender: National or Global)

3.9.1.1. Press Tenders shall be invited for tenders with estimate above Rs. 50 Lac.
3.9.1.2. For items of regular consumption nature where source of supply has already
been established and where the list of approved vendors is maintained duly
updated from time to time, press tenders need not be invited even if the
estimated value is more than Rs 50 Lac but approval of competent authority for

23

waiver of press tendering is to be taken. The competent authority for waiver of

press tender shall be the approving authority as per DOP for Limited Tender Lowest
basis for the estimated value of the Purchase Requisition but not beyond GM.
3.9.1.3. Press Tender may be issued in case of items where reliable sources of supply are
not known and Press Advertisement is considered necessary for development of
additional sources of supply or to procure the material at more competitive terms.
3.9.1.4. Press Tenders shall be invited through Press Advertisement. However, approval of
HOD Materials Department is to be obtained for NIT for issuance of Press
Notification and / or distribution to other agencies, as the case may be.
3.9.1.5. All Press Tenders shall be uploaded on IOCLs e-tender website iocletenders.gov.in
3.9.1.6. Complete tender document shall be hosted on the web site to enable intending
bidders to download the tender documents and participate in the tender.
3.9.1.7. Web site address must be given in the advertisement / NIT.
3.9.1.8. The NIT shall indicate Any Addendum / Corrigendum / Sale date extension in
respect of above tender shall be issued on our website: 'https://iocletenders.gov.in'
only and no separate notification shall be issued in the press. Bidders are therefore
requested to regularly visit our website to keep themselves updated.
3.9.2. Open Tenders non Press (upto Rs. 50 Lac)
3.9.2.1. In case where an approved Vendor Master is not available for particular item(s),
open tenders may be issued for value even less than Rs. 50 Lac. Such tenders
shall be issued on IOCLs e-tendering portal, which will automatically show them
on the Central Public Procurement Portal of Government of India
(https://eprocure.gov.in/). These tenders shall be treated at par with Open
Tenders. However, in this case no advertisement shall be given in Press against
each tender. Periodic notification to this effect shall be given in the local press by
respective Refinery Units and in the national press by RHQ.
3.9.2.2. For tenders up to Rs. 5 Lac, pre qualification criteria is not required. However for
tenders above Rs. 5 Lac and upto Rs. 50 Lac only experience criteria (in
accordance with Cl. 3.4.2 of this manual) will be applicable.
3.9.3. Limited Tender
3.9.3.1. Limited tenders may be invited in the following circumstances after recording the
reasons in writing and obtaining the approval of the administrative authority within
whose power the approval of award of job lies (based on estimated value) but not
above the rank of GM:
3.9.3.1.1. For jobs involving specialized know-how and patented processes where the
sources are known and the possibility of developing fresh reliable sources by
open tendering / press advertisements are remote.
3.9.3.1.2. Where there are sufficient reasons to indicate that it is not in the public interest
to call for open tenders.

24

3.9.3.1.3. When the Indenting Department certifies that the procurement is to be taken on
an urgent basis and there is no sufficient time for getting tenders through Open
Tendering.
3.9.3.1.4. Wherever an approved Vendor Master exists and sufficient numbers of vendors
are available in the Vendor Master, limited tendering can be resorted in cases
where estimate is less than Rs. 50 Lac. No approval shall be required to float
tender if all vendors approved in the Vendor Master are considered to issue LTE.
In cases where estimate is more than the threshold limit, limited tendering can
still be done in cases where Vendor Master with sufficient vendors is available,
but in such cases waiver for press tender shall be taken from the competent
authority as per Cl. 3.9.1.2 of this manual.
3.9.3.1.5. For items of critical nature where bulk contracts with manufacturers / suppliers
located at faraway places are likely to cause transport bottlenecks resulting in
disruption in operation, it will be permissible to restrict limited tendering to local
and nearby sources after obtaining specific approval of not less than GM.
3.9.3.2. Vendor Master
3.9.3.2.1. Vendor Master shall be prepared and approved based on empanelment /
registration process carried out through a press advertisement.
3.9.3.2.2. Vendor Master shall be got approved from an authority not below the rank of
GM.
3.9.3.2.3. Vendor Master shall be reviewed and updated periodically but at least once
every 3 years.
3.9.3.2.4. Press notification for new enlistment shall be published at least once every 3
years. Press notification shall be published in newspapers and also on the IOCL
website.
3.9.3.2.5. New vendors suggested by the indentor, with justification, and approved by
respective GM shall also be considered for limited tendering for the specific case
in question. In such cases where the estimate is more than threshold limit for
Press Tender but Indenting Department wants to go for limited tendering the
Indenting Department shall also take approval from the GM for waiver of Press
Tender along with vendor approval.
3.9.3.2.6. In cases where Indenting Department requires enquiry to be floated only to
suggested vendors, approval shall be taken with justification by Indenting
Department from respective GM for issuance of tender only to suggested
vendors for specific case.
3.9.3.2.7. The vendor who participates in an earlier open tender and is found techno
commercially acceptable shall be considered as approved vendor in the Vendor
Master.
3.9.3.2.8. In case of Projects, the Project Consultants shall suggest vendors based on their
previous experience and also after assessing the vendors. Such suggested
vendors shall be submitted to IOCL for approval and once approved shall form

25

part of the Project Master Supplier List (MSL). Project MSL shall be internally
recommended by a Committee and approved by the GM (Projects).
3.9.3.2.9. List of approved vendors may be put on IOCLs website along with all the
relevant information.
3.9.3.3. Holiday Listing of Vendors
3.9.3.3.1. A list of vendors put on Holiday list shall be maintained by Materials Department
at Refineries HQ and made available online on the Intranet. All such vendors'
name will be entered in the alphabetical order as and when communications are
received from the Ministry / Regions / Departments. The database will contain
the following information:
i.
ii.
iii.
iv.

Name & address of the vendors put on Holiday list.

Period for which the firm is put on Holiday List.
Reference No. vide which the action was taken to put on Holiday list.
Any other relevant information.

3.9.3.3.2. The list of vendor put on holiday list should be updated regularly. It must be
ensured that no debarred/ banned/ blacklisted vendor gets order / Enquiry.
3.9.3.3.3. Action to debar/ ban / Holiday Listing of a firm / bidder shall be taken as per
guidelines with due approval of competent Authority. Guidelines for Holiday
Listing is given in Annexure-4.
3.9.3.4. Vendor name change
3.9.3.4.1. In case of any change of vendor name or contact details, vendor shall inform the
same to IOCL and shall regularize the changes in IOCL records / SAP system
with relevant supporting documents.
3.9.3.4.2. Following documents shall be submitted by indigenous vendors for the purpose:
a) Formal request for change of name and / or contact details in vendors letter
head, preferably in the letter head of preceding company on whom Purchase
Order is issued.
b) Vendor code(s) for which changes are requested, if available with the vendor.
c) Copy of Certificate of Incorporation for change of name issued by Registrar
of Companies.
d) Copy of PAN card and other documents as per Bank Mandate details to be
uploaded in SAP. Documents shall be in the name of new entity.
e) Vendors declaration that the new entity is not black listed by IOCL in the
prescribed format.
3.9.3.4.3. In case of foreign vendors following documents shall be submitted to regularize
the changes:

26

a) Formal request for change of name and / or contact details in vendors letter
head preferably in the letter head of preceding company on whom Purchase
Order is issued.
b) Vendor code(s) for which changes are requested, if available with the vendor.
c) Any legal document in the vendors country which can be used as
documentary evidence towards changes made with notary certificate.
3.9.3.4.4. Documents submitted by vendors shall be reviewed and put up for approval of
HOD of Materials Department.
3.9.3.4.5. Approval of competent authority and all supporting documents shall thereafter
be provided to Information System (IS) Department in scanned copies to
regularize the name change in SAP. Changes made by IS shall be confirmed by
Finance in SAP.
3.9.3.5. General notes on Limited Tenders
3.9.3.5.1. Limited Tender Enquiry (LTE) shall be issued to all the approved vendors. In
case for some specific reasons enquiry has to be issued to less vendors, the
same shall have to be justified and approval taken from GM.
3.9.3.5.2. Limited tender enquiry shall be issued by registered post / speed post / courier /
e-tendering only. In case e-mail tenders have to be issued, specific approval of
HOD of Materials Department with proper justification shall be taken. In case
tenders are issued by e-mail, purchasing official shall ensure that the tender is
issued to the correct e-mail id.
3.9.3.5.3. Proof of despatch shall be maintained.
3.9.4. Single Tender
3.9.4.1. Single tender should normally be avoided for non proprietary items.
3.9.4.2. Purchase of non proprietary items on single tender basis, will be resorted to only
in the following cases:
3.9.4.2.1.
3.9.4.2.2.
3.9.4.2.3.
3.9.4.2.4.
3.9.4.2.5.

Situations of natural calamities and emergencies declared by the Government

Emergencies like fire, civil disturbances, war, cyclones, blow out etc.
Operational break down or exigencies threatening operational disruptions
Where procurement is possible from a single source only
Where supplier has exclusive rights in respect of goods and reasonable
alternatives do not exist
3.9.4.2.6. Standard brand items are also permissible on single tender basis provided there
are strong justifications, which shall be recorded in writing. (Please refer the
relevant clause given below).
3.9.4.2.7. Where an item has been identified or specified by Process Licensor the nature of
item is proprietary of single manufacturer and no other substitute material is
acceptable for technical reason.
3.9.4.2.8. Items where procurement needs to be done on selection basis through
committee purchases

27

3.9.4.3. All single tender non proprietary procurement PRs should give proper justification
in line with the above. In order to exercise control on single tender procurement,
approval for single tender shall be taken from GM. All single tender procurement
cases shall be brought to the notice of Unit Head in the form of monthly MIS or in
the form of presentation during monthly reviews.
3.9.4.4. In case it is decided by the indenter to restrict their procurement to a single make
/ model out of various makes / models available in the market, following
procedure will be followed:
3.9.4.4.1. Standardization of that specific Brand / Make has to be approved by Unit Head
not below the rank of GM / ED with proper justification for the same. This will be
a onetime exercise and will be valid for next two years from the date of approval.
3.9.4.4.2. Subsequently such standardization items can be procured like any other item and
approval for placement of order for standardized item can be taken based upon
the mode of tendering (Single / Limited) and number of technically acceptable
offers received under relevant DOA.
However, the above shall not be applicable for smaller, low cost, branded items
like Odonil, Liquid soap, Toilet rolls, Harpic, Vim powder, Duster etc. that are
being used on day to day basis. (Exception given vide Finance Circular F/12/039
Dated 06.09.2010).
3.9.4.5. Those items that cant be substituted by any other items but to go to the same
manufacturer only for procurement shall be considered as proprietary items e.g.
equipment spares, additives etc.
3.9.5. Repeat Order
3.9.5.1.

Repeat Order on same terms and conditions may be allowed provided it fulfills
the following conditions:

3.9.5.1.1. That the original order against which Repeat Order is being considered was not
placed earlier than six months.
3.9.5.1.2. That the quantity proposed to be purchased against the Repeat Order is less
than or equal to the quantity originally ordered.
3.9.5.1.3. That there has been no reduction in the market rates of similar material since
the original order was placed.
3.9.5.1.4. That the original order was placed as a result of regular tender enquiry and the
order was placed on techno commercially acceptable lowest offer basis.
3.9.5.2.

Repeat Order should be issued only from the original file.

3.9.5.3.

More than one Repeat Order can be placed against the same file as long as
aggregate quantity of all Repeat Orders does not exceed original order quantity
for a certain line item.

3.9.5.4.

Where assigned orders placed on competitive basis are treated as single tender
(as per Circular F/12/025 dtd 8.2.10 and F/12/33 dtd 7.6.10), repeat ordering

28

can be made. However, approval for repeat order shall follow the single tender
DOP after considering the earlier order also.
3.9.5.5.

In case of repeat order proposals, the aggregate value of original order and
Repeat Order shall be considered for determining the approving authority and
Finance Concurrence.

3.9.6. Purchase where tendering procedure is not required

3.9.6.1. For value upto Rs. 1,00,000.00 in each case, regular tendering procedure is not
necessary and such items can be procured by the respective department from the
market.
3.9.6.2. This option shall not be applicable in case of procurement of asset items.
3.9.6.3. Such procurements can be made by respective departments for direct
consumption without the assistance of Materials Department. In case such
materials are required to be kept in Stores, normal procurement procedure shall
be followed by Materials Department against receipt of PR from the User
Department.
3.9.6.4. In procurements directly by User Departments a procedure shall be firmed up with
the approval of respective Unit Head, which will clearly indicate the financial limits
upto which the same is allowed but not beyond Rs. 1,00,000.00.
3.9.6.5. It shall be ensured by the Officer responsible for purchasing that the items are
being purchased at reasonable prices prevailing in the market.
3.9.6.6. The items should be purchased, preferably, from Govt. owned / state owned
department stores / cooperative stores.
3.9.7. Committee Purchases
Committee purchases shall be resorted to only in exceptional cases such as urgent
procurement, procurement of items like uniforms, shoes, furniture, utensils, curtain
accessories etc. Committee Purchase may also be done for cases where it is difficult
to prepare and compare specification and involves selection by the Indenting
Department.
The approved Purchase Requisitions for Committee Purchase should be forwarded by
Indenting Department to Materials Department along with duly approved note for
Committee Purchase.
Approval for Committee Purchase shall be taken by Indenting Department from their
GM. A separate note to this effect containing justification for resorting to Committee
Purchase and time period for placement of order shall accompany the PR. The
approval note shall also contain nomination of members from Indenting, Finance and
Materials Departments. The members shall be nominated by respective HODs and
shall form part of the approval note. Committee members shall be as under:
Estimate
Upto Rs. 10 Lac
More than Rs. 10 Lac

Committee Members
Officers in Grade A - C in Materials, User and
Finance
D Grade and above Officers in Materials, User and
Finance

29

The Committee shall collect quotations preferably from minimum three vendors.
In case of urgency or as per requirement, order can be placed by the Committee by
taking decision on the spot and the same shall be regularized by taking approval
from Competent Authority after the Committee returns to the Headquarters.
Alternatively, the order may be finalized after returning to Headquarters and taking
approval from Competent Authority as per DOP.
If the order is not finalized within the originally envisaged period, fresh approval of
the Competent Authority would be necessary with proper justification/explanation.
3.9.8. Purchase against DGS&D rate/running contracts
It is not mandatory to procure items under DGS&D rate contract. However, the
bidder should be asked in the tender to confirm whether the quoted items are
covered under the DGS&D rate contract. The following clause shall be included in the
tender document (Agreed Terms and Conditions)
(A) The bidder is requested to advise whether they have a Rate Contract for the
same item with DGS&D and if so whether the same could be extended to IOCL.
(B) If response to (A) is YES, a copy of the extract of the Rate Contract showing
the prices and other terms and conditions including validity of the same should
be submitted along with the bid.
Else the bidder undertakes that the price quoted by them is the lower of the
DGS&D Rate Contract and the market price.
For obtaining the copies of the Rate Contract, Regional Officers in Mumbai / Chennai
/ Kolkata or Directorate of DGS&D at New Delhi may be contacted by the various
Units of Refineries Division or the details can be downloaded from the Govt. of India
official web site (http://dgsnd.gov.in/).
3.9.9. Two Bid System
3.9.9.1. In case where detailed engineering specifications are not worked out by the
Engineering Department or the specifications are not comprehensive / well
defined, or the scope involves design work also by the bidder, or the tender
estimate is above a threshold value, two bid tendering system shall be adopted.
Two bid system of tendering shall be followed where estimated value of the
procurement is more than Rs. 50.00 lac. However, two bid system can be followed
irrespective of any value limit in case the Indenting / Materials Department deem
it in the interest of the procurement.
3.9.9.2. Under two-bid system, the tender enquiry shall clearly specify that the quotations
shall be received in two separate covers one containing all details of the tender
viz. specifications, delivery schedule and other commercial terms and conditions
except price and the other containing the price. The "Un-priced Bid" should not
contain any prices or indication thereof in any manner whatsoever. Both the
sealed covers shall be super scribed "Un-priced Bid" and "Priced Bid" as the case
may be, along with the tender enquiry number and both the envelopes shall be
placed in one single sealed cover super scribed with the tender number. Unpriced Bid may also be referred as the Technical Bid

30

3.9.9.3. Bidders should be asked to submit EMD along with Un-priced Bid. In case of BG, if
these are sent directly by the Bank, a certified copy of the said BG shall be
enclosed along with the techno-commercial offer.
3.9.9.4. Price Bids should not be opened until evaluation of the Un-priced Bid has been
completed. Price bid of only techno-commercially acceptable bidders should be
opened after seeking approval from the Competent Authority. Approval shall be
taken from the authority who can approve ordering but not above the rank of GM.
3.9.10. Single Bid System
In single bid system, offers are invited in single part in a sealed envelope, i.e. both
the priced and un-priced parts are clubbed and submitted together by the bidder in
a single envelope.
Single bid system of tendering shall generally be followed where estimated value of
the procurement is less than Rs. 50.00 Lakh and technical specifications are
comprehensive and deviations not envisaged.
3.9.11. Tender Fee
Since majority tenders come under the purview of either Press or e-tendering, soft
copies of tender documents shall be downloaded by the bidders hence tender fee
shall not be applicable for all tenders.
In case of EPCM procurement also since tendering is done by Consultants on behalf
of IOCL, tender fees shall not be applicable.
3.9.12. Issue of Tender documents
3.9.12.1. A Register / record should be maintained for issue of Tender Documents (other
than e-tendering). The names of the parties to whom the Tender Documents are
issued will be entered in this Register. The Register will contain the following
information:
Tender number with due date
Name & address of the party to whom Tender Documents are issued Remarks
3.9.12.2. No tender papers shall be issued after the last date prescribed for the issue, as
given in the tender notice, unless the same is extended.
3.9.12.3. Tender document can be issued in electronic format in order to avoid printing and
handling of voluminous tender document. However the document to be submitted
should be printed set duly signed by the bidder.
3.9.12.4. In case of Open Tender, which consists of document of classified / secret nature,
pre-qualification of the bidders should be done in the first stage of the tender.
Along with the Pre Qualification criteria the bidder shall also be required to submit
a signed copy of the Secrecy / Non Disclosure Agreement before the tender
document is issued. Once the bidders are pre-qualified and signed NDA / Secrecy
Agreement received, complete tenders including classified / secret documents
which form part of the tender can be made available to them for submitting their
bid.

31

3.9.12.5. All tenders are to be mandatorily hosted on the Central Public Procurement Portal
of Government of India (please refer Finance Circular no F/12/050 Dated
03.01.2012)
3.9.13. Receipt of Tenders (in case of hard copy bidding)
3.9.13.1. A sealed tender box with two separate locks shall be maintained in a prominent
place in the office in which sealed tenders can be dropped by the bidders. Keys for
one lock shall be in the custody of the Purchase Section, while key for another
lock shall be in the custody of Finance Department.
3.9.13.2. For voluminous tenders, there should be a separate room with locking facilities for
keeping the tenders since tender box may not have space to contain such
voluminous tender documents.
3.9.13.3. Tender received by post upto the prescribed time for closing of tenders as and
when received shall be dropped immediately into the tender box. In case of single
tenders / proprietary items, due date can be manually modified to read as .or
earlier and can be opened on receipt.
3.9.13.4. The tender box shall be sealed after the time appointed for receipt of tenders. Any
tender received after the prescribed time shall be marked with the time and date
of receipt by the officer receiving the same and shall be distinctly super scribed as
"LATE" or "DELAYED" as the case may be. Delayed tenders are defined as tenders
posted on the date prior to the opening of tender but received after tender cut off
time. Late tenders are tenders posted on or after the date of tender cut off time.
3.9.13.5. It shall not be necessary for the bidder to return the complete tender document
(big Volumes) duly signed as a token of their acceptance of the same while
submitting their bid. Instead, the bidder may submit an undertaking along with
the Index Page of tender document duly signed to the effect that he has fully read
and understood the tender requirements and accepts all terms and conditions of
the tender (except for the ones mentioned in the deviation statement) and his
offer is in confirmation to all terms of tender.
3.9.13.6. In general, the receipt of tender should be through tender boxes as stated above.
However, in cases where the tenders are required to be submitted by hand, it may
be ensured that the names and designation of at least two officers are mentioned
in the bid documents. The information about these officers should also be
displayed at the entrance / reception of the premises where tenders are to be
deposited so as to ensure convenient approach for the bidders.
3.9.14. Opening of Tender (in case of hard copy bidding)
3.9.14.1. On the date and time fixed for opening of tenders, the tender box w ith tw o
s e p ar a t e l o c k s shall be opened by the representatives of Purchase Section &
Finance Department.
3.9.14.2. After the tender box is opened, all the tenders shall be marked serially. The serial
number shall be given as numerator and the total number of tenders received
shall be shown as denominator. For example, if ten tenders have been received
the first tender shall be marked as 1/10 and the last tender shall be marked as
10/10. All the envelopes shall be initialed by the officers opening the tender duly
marking the serial number.

32

3.9.14.3. On opening, the tender papers shall be initialed by the tender opening team in
ink. The number of tenders shall be noted on all the pages of the tender. All
corrections and cuttings shall be initialed and dated. The corrections and cuttings
shall be circled and the total number of corrections on each page shall be noted
down at the end of the page. In case there is no correction, the word "no
corrections" shall be written at the end of the page. Whenever the bidder has not
quoted the rates both in figures and words (as per requirement), this fact shall be
mentioned in the face of the Price Schedule while initialing the tender. In case
white fluid is used for correction, the same should be recorded at the time of
opening of tender along with corrected matter.
3.9.14.4. Vendors present for witnessing of tender opening shall be informed of the names
of participating bidders and EMD details during Techno-commercial bid opening.
3.9.14.5. The procedure to be followed in case any tender received is found in open / torn
condition is given below:
In case tender is opened inadvertently by any IOCL personnel during handling of
the tenders or the tender has been received in torn / open condition, the tender
should be put immediately in another envelope and sealed by putting signature on
the fresh envelope along with old envelope with date and designation, also super
scribing the fact on the new envelope. This fact should also be brought to the
knowledge of the HOD of Materials Department in writing.
3.9.14.6. However to avoid opening the tender by mistake, all concerned to strictly adhere
to the instructions by keeping the Tender Box wherever possible (it may not be
possible where size of the tender documents are quite big).
3.9.14.7. In case Tender Opening team finds at the time of opening of tender box that the
submitted tender is in open / torn condition, the members of the Tender Opening
team should record and sign on the envelope with date and their designations.
3.9.14.8. Tender opening team shall incorporate the above fact in the tender opening
register and inform all the bidders witnessing the tender opening.
3.9.14.9. In case of two bid system on opening of techno-commercial bid the committee
finds that the price bid envelop is in open / torn condition, the committee should
immediately put the price bid in another envelope and seal the new envelope by
recording the above fact and the tender opening team should sign on the new
envelope as well as old envelope and also mention date with their designations.
3.9.14.10. In case of two-bid system, on the due date of opening, the sealed covers
containing the "Un-priced bid" shall be opened by the Tender Opening team from
Purchase Section and Finance Department. The envelope containing the Price Bid
should be signed on the top by the Tender Opening team as a token of having
received the cover containing the Price Bid. The attending bidders shall be
allowed to be present at the time of opening of Un-priced Bid. All other provisions
regarding opening of tender shall be applicable in case of tenders under two-bid
system also. The sealed price bids shall be kept in a separate box in two locks.
The keys for one lock shall be in the custody of Purchase Section while the key
for the other lock shall be in the custody of Finance Department. On the day of
opening of the Price Bid, representatives of Purchase Section and Finance
Department shall follow the stated procedure.

33

3.9.14.11. After the tenders have been opened, a statement of offers received shall be
prepared and shall be signed by the tender opening team and kept in the file.
3.9.14.12. In case of Single bid system, EMD cover to be opened first. The demand drafts /
BG received from the bidders against earnest money shall be detached from the
tender papers and kept safely by Purchase Section till it is forwarded to Finance
Department.
3.9.14.13. In case tenders are invited on behalf of IOCL by Project Consultant, other than
PSU Consultant, opening of price bids to be witnessed by Finance representative
of IOCL.
3.9.14.14. Date and time of opening of Price Bid shall be intimated to parties concerned (for
tenders with estimated value more than that specified for public opening) so that
the bidders may be present at the time of opening if they so desire.
3.9.14.15. On due date and time of opening of Price Bid, original price bid along with
implication, if any, shall be opened by observing all the procedures of tender
opening.
3.9.14.16. The rates as well as the special terms and conditions related with price evaluation
shall be read out in the presence of attending bidders.
3.9.14.17. Price Bids of techno-commercially acceptable bidders shall only be opened. In
case of partially acceptable bids, prices of only acceptable line items shall be read
out.
3.9.15. Witnessing of Tender opening
In case of e-tendering witnessing bid opening has no relevance since bidders can
view the same online from anywhere. Wherever bids are invited through hard copies
(physical form) for tenders with estimated value above the threshold limit for etendering, witnessing of such tenders shall be allowed. Witnessing of tender opening
is not required below the e-tendering threshold limit.
Bidders' authorized representative (one representative for each bidder) only shall be
allowed to be present at the time of opening tenders. A statement of such bidders
shall be prepared and their names and signatures shall be obtained thereon (please
refer Annexure-5 for Tender Opening Sheet in case of physical tenders).
3.9.16. Constitution of Tender Opening Team
Tenders shall be opened by the representatives of Materials and Finance Department
irrespective of grades.
3.9.17. Tenders received by fax / e-mail / single bid in case of two bid (in case of
hard copy bidding)
3.9.17.1. Offer by fax / e-mail sent by bidder of their own (i.e. against our tender
stipulation of submitting in sealed envelope) and received before due date and
time shall be opened by tender opening authorities as per the following procedure:

34

3.9.17.2. The tenders so received, in case of single bid system, shall be signed by an officer
of Purchase Section and sealed in an envelope super scribing tender number and
due date and e-mail offer/fax offer as the case may be, and kept along with
other tenders.
3.9.17.3. In case of two bid system the offer so received shall be signed by an officer of
Purchase Section and a photocopy of the offer with price portion blank shall be
taken and sealed in an envelope marked Unpriced Bid and the original shall be
sealed in another envelope marked Price Bid. Both the envelopes shall be sealed
in another envelope super scribing tender number and due date and e-mail offer
/ fax offer as the case may be and kept with other offers.
3.9.17.4. Similar procedure shall be followed for Un- super scribed offers or offers received
in single bid system as against our requirement of two bid system.
3.9.17.5. Fax or e-mail offer can be considered in case of proprietary and single tender
procurements.
3.9.18. Late Tenders
3.9.18.1. Delayed Tenders / Late Tenders will not be opened but will be kept intact and
should be indicated in the Tender Opening Register / record and also incorporated
in the proposal leading to approval.
3.9.18.2. In case the bidder whose offer has been received late, has attached any Bank
Draft or original Bank Guarantee towards EMD with his tender, the unopened
tender envelope may be returned intact to the bidder, against request of the
bidder, after recording on the envelope the date and time of receipt of the tender,
without waiting for finalization of tender. A photocopy of the envelope cover
should be kept in the file and necessary evidence of having returned the envelope
should also be maintained in the file.
3.9.18.3. In all other cases even without request from the bidder(s), Late Tenders shall be
returned to the respective bidders in as received condition after finalization of the
tender, after recording on the envelope the date and time of receipt of the tender.
A photocopy of the envelope cover should be kept in the file and necessary
evidence of having returned the envelope should also be maintained in the file.
3.9.19. Invalid Tenders and tenders liable for rejection
A Tender is liable for rejection in the following circumstances:
i.
ii.
iii.
iv.
v.
vi.
vii.
viii.

Does not pay the EMD before deadline

Does not fulfill minimum pre qualification criteria as per the Tender Documents
Submits the tender late i.e. after due date and time
Unsolicited tenders
Stipulates the validity period less than what is stated in the Tender Documents
Stipulates his own conditions and does not agree to withdraw the deviations,
rendering his bid unacceptable
Does not disclose the full names and addresses of all his partners or Directors as
applicable wherever called for in the tender.
Does not fill in and sign the required annexures, specifications, etc. as specified in
the tender.

35

ix.
x.
xi.

Does not submit bid in the prescribed format making it impossible to evaluate the bid
Indulges in tampering of tender documents
Does not conform to any tender condition which stipulates non-conformance of
tender conditions as a rejection criteria

3.9.20. Cancellation of Tender

In order to maintain uniformity in the procedure, whenever any tender is to be
cancelled / annulled, approval to be taken for such cancellation indicating the
reasons. Finance concurrence should be obtained for such cancellations. In case
cancellation is on account of commercial issues the approving authority should be
the same authority who has approved the proposal for floating of tender. In case
cancellation is on account of technical issues (including inability to justify quoted
prices compared to estimate), the approving authority shall be PR approving
authority.
Cancellation note shall be duly concurred by Finance.

36

CHAPTER - IV
EVALUATION AND ACCEPTANCE OF TENDERS
4.1.

Purchase File
A Purchase File shall normally consist of two parts namely notes portion and
correspondence portion. The notes portion shall contain internal (IOCL) notings
pertaining to the case and correspondence portion shall contain all the issued and
received correspondence including tenders. Every page in the notes portion of the
file shall be consecutively numbered.

4.2.

Technical & Commercial Queries

4.2.1. Procedure in case of Single Bid System:

No techno commercial clarification having direct or implied financial implication
shall be permitted with bidders. It is advisable to issue Single Bid Tenders as Zero
Deviation bids.
4.2.2. Procedure in case of Two-Bid system:
4.2.2.1. After opening of the un-priced bids, the offer shall be scrutinized technically by the
Indenting Department and commercially by the Purchase Section.
4.2.2.2. Techno-commercial clarifications shall be obtained from the bidders and, wherever
necessary, offers shall be brought at par through discussions and correspondence.
Technical and / or commercial clarification shall normally be taken not more than
two times and decision will be taken based on the documents and information
available with IOCL. If the clarifications are still not clear or there are
unacceptable deviations, the offer may be rejected.
4.2.2.3. Reasonable time should be given to the parties depending upon the nature of
items involved for seeking technical details / clarifications. To expedite evaluation,
normally the correspondence shall be done via electronic media.
4.2.2.4. In case of e-mail correspondence, the queries and clarifications should be on the
body of the e-mail (and not as attachments). In case of attachments, only signed
and scanned attachments shall be accepted.
4.2.2.5. Before giving final technical recommendation, all technical points to be sorted out
from vendor through Purchase Section. Indenting Department shall not directly
take up the matter on technical clarification with the vendor. However, in the
interest of faster finalization of the technical recommendation, with the specific
approval of DGM, Indenting Department may take-up with vendors on technical
points keeping copy of communications / MOM / reply etc. in the file. In such
cases Indenting Department shall ensure that no price implication is sought from
bidders. Price implication, if required, shall be communicated to Purchase Section
and taken by them.
4.2.2.6. If there are at least three technically and commercially acceptable bids without
the need of seeking any clarifications from them on opening the Un-Priced Bid
then there shall be no need to raise TQ/CQ to the non compliant bidders and the
file may be processed based on available information.

37

4.2.2.7. In case of any substantial change, re-bidding is desired. For minor clarifications
after Un-Priced Bid opening, communication may be sent to all the bidders who
have submitted their offers. However, the same should be clearly brought out in
the recommendation for Price Bid Opening / Award proposal.
4.2.2.8. Changes in the material specification / scope of work etc. should be minimized as
far as possible and should be totally avoided after opening of the price bid.
4.2.2.9. TQ / CQ shall indicate whether price implication is permitted or not. Supplemental
letters for revision in prices received from bidders shall be considered for
evaluation only in those cases where the revision in the price is asked for by IOCL
based on changes in specification / scope of work / commercial terms and
conditions.
4.2.2.10. Normally, wherever required, bidders shall be asked to submit price implications.
However, in case it is imperative to take revised price bid instead of price
implication, approval shall be taken from order approving authority not above the
rank of GM and both the original and revised price bids shall be opened.
4.2.2.11. Rejection of offer on techno-commercial basis should be got approved from the
competent authority with whom the approval of the tender rests but not above the
rank of respective GM.
4.2.2.12. Where there is no technical rejection, technical recommendation duly endorsed by
concerned HOD can be accepted. Technical Bid Analysis or Evaluation (TBA / TBE)
shall be signed by an Officer of Indenting Department and form part of the
technical recommendation. A list of acceptable deviations shall be indicated.
4.2.2.13. Normally the payments on account of statutory levies i.e. Excise Duty, Sales Tax
etc. are payable extra based on documentary evidence for which existing
applicable rates should be indicated by the bidders.
4.2.2.14. Offer can be rejected on grounds other than technical reasons, in case some facts
have come to the light of the capability of the party after the issue of the tender,
prior to issue of order with the approval of GM.
4.2.2.15. In case of procurement of items through Buy-Back offers following procedure
should be followed:
i.
ii.
iii.

Approval for the procurement of the item should be taken on gross value without
considering the deduction/discount allowed for taking back the old condemned
item and delegation of authority to be decided accordingly.
Approval for disposal of old items and consequential write off value for the losses
on the disposal to be taken from the competent authority.
Cenvat credit availed on the goods disposed to be reversed as per rule 3(5) of
Cenvat Credit Rules.

4.2.2.16. Whenever a bidder make a request for assigning the Purchase Order in favour of
its sister firm or associate partner the offer should be considered as single tender
and approval taken accordingly. However assigning of orders shall not be allowed
where specific PQC has been called for in the tender and the assignee (sister firm
or associate partner) is not meeting the PQC.

38

4.2.2.17. Suo moto changes shall be treated as per the following matrix. The same should
be included in the tender document also
Stage

Price Increase

Price Decrease

After opening of
un-priced bid

Not Acceptable. Bid shall

be liable for rejection.
Action regarding Holiday
Listing may be taken. EMD
shall be forfeited

In case of suo moto price

decrease:
1. Tender evaluation shall be
done without considering
suo moto price decrease.
2. Ordering shall be done
considering
suo
moto
price decrease.

4.2.2.18. No finance concurrence is required for administrative approval like waiver of EMD,
extension of due date, waiver of press tendering etc.
4.2.2.19. Commercial Bid Analysis (CBA), which is a tabulation of commercial terms and
conditions, shall be signed by an officer of Purchase Section. Finance official shall
also sign the CBA for cases requiring Finance Concurrence as per DOP.
4.2.3. Additional Procurement Procedure for case with estimated value Rs.5 cr
and above: The following procedure will be followed in case of tenders with
estimated value of Rs.5 cr and above:
4.2.3.1. In case of tenders with estimated value of Rs.5 cr and above, there will be a preprice bid conference with technically acceptable bidders wherein all the commercial
aspects will be fully clarified to the technically acceptable bidders. However, in case
there is no commercial deviation, approval for waiver of Pre Price Bid meeting shall
be taken from GM.
4.2.3.2. No technical issues shall be raised / discussed by either side during Pre Price Bid
meeting.
4.2.3.3. Based on discussions in the pre-price bid conference, deviations, if any, from tender
terms and conditions shall be communicated in writing to all the bidders and they
shall be asked to submit price implication when substantial changes are made after
taking into account the modified terms and conditions including deviations, within
stipulated period. It should be clearly mentioned to the bidders that if they take any
further deviations, their offer shall be rejected outright. Price implications received
after the stipulated date are not to be considered. Bidders unable to comply with
IOCLs terms and conditions including proposed deviations will be allowed to
withdraw.
4.2.3.4. If a bidder takes any further deviations other than those agreed, while submitting
the revised price bids, its bid shall be rejected outright without any reference. In
case it is found after opening that any deviation is incorporated in the revised price
bid, bidder is also liable to be placed on holiday for a period of one year for future
tenders in IOC after following the laid down policy in this regard.
4.2.3.5. These terms and conditions should be made known to the prospective bidders as
part of Tender Document.

39

4.2.4. Procedure for loading deviations to tender conditions

4.2.4.1.

Loading and evaluation criteria shall form part of the tender document.

4.2.4.2.

The commercial conditions put forward by the bidders in case of single bid
system and after CQs in case of two bid system shall be loaded as indicated in
the tender document.

4.2.4.3.

Loading and ordering shall be done on FOT Despatch Point basis for Indian
vendors and FOB Port of Exit basis for Foreign vendors.

4.2.4.4.

Foreign bids shall be compared considering Bill Selling Rate released by SBI on
the date of PBO.

4.2.4.5.

Price Variation Clause (PVC)

Bidders asking for Price Variation Clause (PVC) have to quote a ceiling for the
same. Ceiling shall be loaded for evaluation purpose. Offers received without
any ceiling shall be rejected unless all the bidders have asked for the same PVC
without ceiling. If well defined and workable PVC can be established, the same
should be made part of the tender documents, wherever required. Where IOCL
gives PVC in the tender it may be with or without ceiling. Reasons for not
indicating ceiling shall be indicated in approval note for such tenders.

4.2.4.6.

Price Adjustment clause on account of delay in delivery

This clause shall be as per Cl. 12 of IOCLs GPC. The exceptions are given in a)
and b) below:

a)

In case of package items (ordered as a complete system), the price adjustment

shall be applicable on the entire order value of that package and not on the
value of the undelivered portions (even though a billing breakup has been
approved for the package).

b) In case of purchase of bulk items where tolerance limit is specified (e.g. pipes,
cables, steel etc.), price adjustment clause shall be applicable on the actual
quantity supplied, within the tolerance limit, instead of Purchase Order quantity.
The difference between the quantum as per GPC and that offered by the bidder
shall be loaded. For non-acceptance of this clause or for accepting Liquidated
Damage, loading of 5% shall be done. In case the clause as per IOCL GPC is
accepted but with maximum limit indicated as 5% of undelivered order value,
loading of 2.5% shall be done.
4.2.4.7.

Payment Terms
The applicable payment terms should be clearly indicated in the tender
documents and bidders should be informed that if they take deviations to the
specified payment terms, loading for interest implication at 1% higher than
IOC's cash credit account rate applicable on the date of issuance of tender
document which shall be mentioned in the tender documents.
Following period shall be considered for loading in case of deviations:

40

i.
ii.
iii.
4.2.4.8.

Drawing approval 80% of the delivery period.

Receipt of raw materials at Suppliers works 50% of the delivery period.
Final 10% payment also against dispatch 30 days

Specific Discount
This option should be considered while preparing comparative statement. Suo
moto discount shall be treated in line with the guideline given in this manual.

4.2.4.9.

Discount for prompt payment

This should be ignored.

4.2.4.10.

Variation in operating cost

Wherever operating costs are required to be assessed while evaluating the offers
of the parties, the basis of evaluation of operating cost must form part of tender
documents. Wherever variation in the power consumption to be loaded,
incremental cost of power consumption to IOC to be considered.
The
incremental power consumption should be based on cost sheet of previous year
for fuel and other utilities. Maximum Limit should be prescribed.
In all cases of technical loading, there shall be a corresponding clause on penalty
in case of not meeting the guaranteed parameters. The parameters used for
calculating the loading component shall be the same as those used in calculating
the penalty amount. Technical loading and penalty shall ordinarily be limited to
maximum of 10% of the capital cost.
This document shall be prepared by the indenting department along with the PR.
Loading shall be done only in cases where parameters can be clearly measured.

4.2.4.11.

CENVAT benefit
For the purpose of evaluation of offers, Cenvat benefit on account of Excise Duty
/ CVD / SAD / Service Tax is to be considered. No VAT benefit shall be
considered for evaluation of offer.

4.2.4.12.

Evaluation of tender for procurement of common chemicals / catalysts

supply (please refer Finance circular F/12/28 dated 05.04.2010)
While evaluating the offers of common chemicals / catalysts which are meant for
use of manufacture of both dutiable and exempted products (LPG for domestic,
SKO for PDS, LSHS / Naphtha / FO for fertilizer) CENVAT credit admissibility
should be considered in comparative statement while evaluating the tender. As
CENVAT credit on these common chemicals / catalysts are admissible on pro
rata basis, any evaluation without considering CENVAT credit may lead to
incorrect evaluation if one party is giving Cenvat invoice while others are not
giving on the same common chemical /catalyst.
Further since the percentage of dutiable goods clearance vary from month to
month in each refinery; overall percentage of last financial year (to be provided
by Finance) can be used for pro-rata credit on these chemicals / catalysts in the
year of evaluation of bids.

41

4.2.4.13.

Royalty Inflow
In case of any benefit to IOC R&D for the usage of IOC R&D formulations by the
bidder in the form of royalty, such royalty inflow net of prevailing taxes /
surcharges, should be deducted from the quoted price as specified in the tender
documents.

4.2.4.14.

Freight components
Bidders shall be asked to furnish firm freight charges in their offer. In case
bidder does not submit the same and mentions Freight to pay, freight loading
shall be done considering the higher of the following two options:
a) fixed reasonable percentage / absolute value that shall be decided by
individual units
b) maximum prorated (on the basis of distance) freight quoted by any other
bidder against the same tender
After Loading, if the same Bidder becomes L1 (lowest) then the order will be
placed based on Freight Charges payable extra at actual subject to maximum
freight charges by which the prices of the L1 bidder has been loaded.
When a bidder does not mention anything about the freight component, the
same shall be considered as nil and to this extent, a clause shall be indicated
in the Agreed Terms and Conditions or elsewhere in the tender document, as the
case may be.
Where bidder has quoted firm freight charges, documentary evidence of freight
is not required. Vendor shall be paid as per the percentage / lump-sum freight
quoted by them.

4.2.4.15.

Taxes & Duties

When a bidder does not mention Taxes & Duties, the same shall be considered
as Borne by vendor and to this extent, a clause shall be indicated in the
Agreed Terms and Conditions or elsewhere in the tender document, as the case
may be.

4.2.4.16.

Inspection charges
When a bidder does not quote inspection charges in spite of having been
stipulated in the tender document to indicate inspection charges, the same shall
be considered as nil and to this extent, a clause shall be indicated in the
Agreed Terms and Conditions or elsewhere in the tender document, as the case
may be.
Documentary evidence of Inspection Charges is not required. Vendor shall be
paid as per the percentage / lump-sum charges mentioned in the Order.

42

4.2.4.17.

Components / spares / accessories

If a vendor does not quote for some components / spares / accessories
specifically indicated in the tender for consideration along with the main
equipment, the same shall be considered as free supply and to this extent, a
clause shall be indicated in the tender document.

4.2.4.18.

Performance Bank Guarantee (PBG)

4.2.4.18.1. Performance Bank Guarantee shall be normally furnished for 10% of order value
unless otherwise specified in the tender documents.
4.2.4.18.2. In case of Rate Contracts lined up by Central Procurement Cell (CPC), PBG shall
be applicable as under:
Part-1) 2% of the value of rate contract shall be submitted at RHQ valid for
ARC period + delivery period + six months
Part-2) 8% of the individual call up order value shall be submitted at Ordering
Unit valid as specified in the tender.
4.2.4.18.3. In case of Rate contracts lined up by CPC if the vendor offers to submit one time
single PBG of 10% of the Rate contract value at RHQ, the same shall be
acceptable and treated at par with distributed PBG (2% RHQ and 8% Unit).
4.2.4.18.4. In case of change in the order value due to an amendment, the PBG value shall
be proportionately changed.
4.2.4.18.5. For the Rate Contract items where prices are variable, PBG shall be submitted
by vendor for the amount of Call-Up PO. Quantity tolerance and escalation due
to price variation clause shall not be considered for PBG.
4.2.4.18.6. In case bidder does not agree to submit PBG as per tender requirement, 10%
loading shall be done. In case PBG is agreed for less than 10%, loading shall be
done for the differential amount.
4.2.4.18.7. Performance Bank Guarantee need not be taken for spares of proprietary nature,
stationery and computer consumables.
4.2.4.18.8. PBG shall not be applicable in case tender estimate is less than Rs. 25 Lac.
However, this exemption shall not be applicable for equipments and packages.
The requirement of PBG shall be clearly indicated in the tender document.
4.2.4.18.9. Mobilization and Milestone Advance payments shall be released to the vendor
only after submission of PBG, if applicable.
4.2.4.19.

Transit Insurance
In case insurance charges are extra and to be covered by IOCL, a nominal
loading of 0.5% shall be done for evaluation. In case the bidder quotes
insurance charges inclusive, its bid shall still be loaded by this amount for
evaluation purpose.

43

4.2.5. Price Negotiation

4.2.5.1. Price Negotiations with the bidders shall not be conducted as a matter of routine.
4.2.5.2. It should be clearly mentioned in tender documents for information of bidders that
Negotiations will not be conducted with the bidders as a matter of routine.
However, IOCL reserves the right to conduct negotiations.
4.2.5.3. Negotiation shall be done with Finance concurrence and approval of at least GM
4.2.5.4. Negotiations can be done in any of the following cases:
4.2.5.4.1. In case of open or limited tenders, where number of technically acceptable
offers received is less than three and where quoted price of L1 bidder is more
than 10% of estimate after review of estimate.
4.2.5.4.2. In case of single tender (proprietary and non proprietary) procurement where
the estimate is based on budgetary offer and in other cases where the offer is
more than 10% of the estimate.
4.2.5.4.3. In cases where number of parties is limited and estimate is not based on inhouse data viz. selection of licensor / technology
4.2.5.4.4. In case rates quoted by the lowest bidder (L-1) are Abnormally High rate (AHR)
for certain items
4.2.5.4.5. In case of high value tenders (even if quoted price is within 10% of
departmental estimate)
4.2.5.4.6. Negotiation can also be conducted in case of items where procurement is
sourced from more than one source for reasons of continuity in supplies in case
one party fails or due to the fact that L-1 cannot meet entire requirements etc.
In this case negotiations can be held with L-2, L-3 etc. for matching rates of L-1.
4.2.5.5. In case of negotiation, the party should be asked to give the revised reduced rate
or a percentage reduction from the original amount. No new condition by the
bidder should be permitted during negotiation.
4.2.5.6. Unless otherwise specified in the note leading to approval for holding price
negotiation, negotiation shall be conducted by Tender Committee considering the
value of the order and level of officials shall be as per TC constitution based on
value of procurement.
4.2.5.7. All communications to bidders for negotiations should be sent by Registered Post /
Speed Post / Fax / Courier / Email. In case of local bidders, the same can be
delivered by hand after obtaining dated signatures of the bidders. Reasonable
time should be given to the bidders to attend the negotiation.
4.2.5.8. The record of negotiations at all stages shall be kept and shall be signed by all the
participants.
4.2.5.9. In case lowest party backs out before the Purchase Order is placed or before the
execution of the work order, there should be re-tendering in a transparent and fair

44

manner. In such cases, negotiation should not be held with the next lowest party.
The Authority may, in such a situation, call for a limited or short notice tender if
so justified in the interest of the work and take a decision on the basis of the
lowest tender.
4.2.5.10. In order to avoid delays, negotiations through email / teleconference / video
conference shall also be acceptable for agencies who are stationed at a distant
place or from abroad with specific approval of GM. In such case, negotiation
committee shall prepare a discussion note and signed by all committee members.
The discussion should be confirmed over fax / letter from the bidder before
finalizing the contract.
4.2.5.11. If the lowest bidder fails to reduce the price to an accepted level, re-tendering is
to be done if time permits. Otherwise, order may be placed by recording
justifications.
4.2.6. Validity of offer
4.2.6.1. Sufficient period for the validity of the rates quoted by the bidders shall be
prescribed in the tender documents. Normally a validity for four months shall be
sought which can be modified depending upon specific tender requirement.
4.2.6.2. In case of items where prices are normally varying at a faster pace, long validity
period is not desirable.
4.2.6.3. It must be ensured that validity is as per tender documents and the issue should be
sorted out along with the commercial terms and conditions before opening of price
bid. If the party does not give validity as desired, his price bid need not be opened.
However, based on merits of the case, such as single offer or poor response, the
same may be considered but the justifications for such consideration should be
recorded in the approval note.
4.2.6.4. The tender documents should state that on account of exigencies, in case bids have
to be revalidated before PBO beyond the originally sought validity, the same may be
allowed with or without change in prices. However, IOCL reserves the right to
cancel such tender and refloat the same.
Such price implications may be allowed only with the approval from HOD of
Materials Department with justification. However should the situation warrants, the
tender can be cancelled and refloated with approval from competent authority.
4.2.6.5. After opening of the price bids, in cases where validity extension is required, the
same may be sought from only the lowest bidder.
4.2.7. Recommendation for placement of order
4.2.7.1. After opening of the Price Bids, Price Comparative Statement (CS) shall be made
by Purchase Section. Price evaluation shall be done based on the defined
evaluation and loading philosophy.
4.2.7.2. CS shall be signed by an officer of Purchase Section and Finance concurrence shall
be done for cases requiring Finance Concurrence as per DOA.

45

4.2.7.3. For all cases falling within Tender Committee (TC) purview, the CS will be first
forwarded in file to Finance Department for checking. The officer of Finance
Department shall check and, if found correct, sign the CS and return the file to
Purchase Section for submitting for TC consideration.
4.2.7.4. While recommending the acceptance of tenders, apart from other relevant points
mentioned elsewhere in this manual Purchase Section shall also consider the
following points over and above the comparative rates of the bidders:
4.2.7.4.1.

In case it is recommended by the Tendering Department to accept a tender

which is other than the lowest, reasons & justification for rejecting each of the
lower tenders shall be recorded in writing.

4.2.7.4.2.

In case the prices quoted by the lowest bidder are below our estimates by more
than 20%, estimate to be reviewed first and workability certified.

4.2.7.4.3.

If the indenting Department considers the L1 prices workable, then the quoted
price may be considered for placement of order.

4.2.7.4.4.

If certified unworkable by Indenting Department, bidder shall be called for

justification and workability of quoted rates by Materials Department on the
recommendation of Indenting Department following the approval process as in
the case of price negotiation. Bidders response shall be reviewed by the
Indenting Department for workability. In case the price is then considered
workable, order shall be placed on the lowest evaluated price. In case the price
is found unworkable, approval of the Competent Authority of Indenting
Department with whom the powers for the approval of the contract rest not
above the rank of GM should be obtained for rejecting such line item. Bidder
will still be considered for other items in its offer. In case a line item is declared
unworkable the next lowest bidder for that line item shall be considered to be
lowest or single as per DOP clause considering the number of remaining offers
for that line item.

4.2.7.4.5.

The TC recommendation / Recommendation for Award (RFA) shall be made as

per the approved proposal format to ensure that none of the points is missed
while making the proposal.

4.2.7.4.6.

Supply and site work should be separately identified and ordered as separate
line items for clarity and taxation purpose.

4.2.7.4.7.

It should be ensured that wherever the proposal requires the approval of

Director / Chairman / Board of Directors, a checklist type proposal is sent along
with a brief write-up / summary of the proposal to be enclosed while forwarding
the proposals for approval. It is better to follow such checklist in all cases.
Please refer Annexure-6 for check list for forwarding proposals required
approval of D (R) / Chairman / Contracts Committee of Board of Directors /
Board of Directors.

4.2.7.4.8.

Please refer Annexure-7 a for Price Bid Opening format and Annexure-7 b
for PO proposal format.
Wherever the proposal requires the approval of Board / Committees, the
guidelines for preparing the agenda items shall be as per Annexure-8.

46

4.2.7.4.9.

Review of already approved techno-commercial evaluation should be avoided.

However, in exceptional circumstances, the review may be taken up with full
justification with the approval of Unit Head.

4.2.7.4.10. In case the vendor has been put on Holiday List of the Corporation, the bid of
such vendor shall be rejected, even if the vendor had been declared qualified
in the techno-commercial evaluation.
4.2.7.4.11. GPC deviations taken by the bidder can be accepted with the approval of GM
with Finance Concurrence.
4.2.7.4.12. Comparisonwithestimateshallbedoneonlyincasewherethenumberoftechno
commerciallyacceptableoffersislessthan3.
4.2.7.4.13. In case a bidder does not accept Part Order condition or gives conditional
acceptance of Part Order, its price bid shall still be opened. In case the bidder is
lowest for all items or meeting the part order condition, order shall be proposed
on that bidder. In case not meeting the part order condition, the bidders offer
shall be commercially rejected for the entire tender or specific line item
depending on the part order condition. DOP shall be taken accordingly. In such
case the next lowest bidder shall become the lowest bidder.
4.2.7.4.14. Sometimes the per diem charges quoted by vendor for installation are very
high, in such cases efforts should be made by IOCL / its representatives to
verify and confirm reasonability of per diem charges.
4.2.8. Finance Concurrence:
4.2.8.1. After the proposal is scrutinized and found acceptable, finance concurrence shall
be recorded for the proposal having value above the limits specified as per DOA.
4.2.8.2. After the tender papers along with the recommendations have been received in
Finance, the same shall be scrutinized with a view to see that the procedural
instructions have been complied with in general. Particular attention shall be paid
to the following points:
4.2.8.2.1.

That the work has been administratively approved and detailed estimates
sanctioned by the competent authorities.

4.2.8.2.2.

That the mode of tendering adopted is in accordance with the general

instructions in this regard or any specific relaxations made by the competent
authority.

4.2.8.2.3.

That the tenders have been opened as per guidelines and (in case of hard copy
tenders) are signed by the officers having opened these tenders. There should
be no unattested cuttings and alterations.

4.2.8.2.4.

To ensure that all tenders received in time are incorporated in the comparative
statement correctly and the additional conditions quoted by the tenders have
been evaluated in financial terms so as to bring the tenders at par for the
purpose of comparison.

47

4.2.8.2.5.

That the proposal is made for the lowest acceptable tender and in cases where
it is proposed to accept a tender other than the lowest, reasons are recorded
for ignoring the lower offers and the same are justifiable.

4.2.8.2.6.

That the proposed terms and conditions are clear, unambiguous and with
adequate financial safeguards.

4.2.8.2.7.

In cases where negotiations have been carried out, the same have been done
after the approval of the competent authority and record of negotiations at
various stages as signed by the participants has been kept.

4.2.8.2.8.

That the value particulars shown in the CS are correct. The value put up for
the approval should include all costs, duties, taxes, freight, etc payable by
owner.

4.2.8.2.9.

It is to be ensured that wherever any decisions are taken by overriding the

comments already available on record, the appropriate clauses of the Manual
and the Circular reference shall be given by the authority who is overriding or
revising the earlier findings available on the record especially where issues
deserve retendering but due to paucity of time, the tender is to be finalized
without any retendering.

4.2.8.2.10. It is to be ensured that no unsolicited loading in the price bid is done without
the proper approvals and documentation.
4.2.8.2.11. It is to be ensured that cost estimation should be as comprehensive as possible
to provide proper yardstick for assessment of reasonability of quoted rates.
4.2.8.2.12. It is to be ensured that the instructions issued by Government of India from
time to time regarding the purchase preference available to MSEs are adhered
to.
4.2.8.2.13. It is to be ensured that rules regarding the splitting of the contract are followed
4.2.8.2.14. It is to be ensured that wherever Indian agents are involved, registration of the
agent should be ensured before finalizing the order.
4.2.9. Tender Committee (TC)
4.2.9.1. Proposals above Rs.10 Lac shall be put up for consideration by the Tender
Committee. Tender Committees will consist of three members i.e. the Convener
from Materials Department, Finance member and a member from the Indenting /
User Department.
4.2.9.2. TC consideration and recommendation is not required in following cases:
i.
ii.
iii.
iv.

In respect of proposals received from consultants for projects

Single tender procurements
Repeat Order proposals
Lone offer received against limited or open tender enquiry

4.2.9.3. In case of Lone techno commercially acceptable offer, despite having received more
than one offer, TC recommendation shall be required

48

4.2.9.4. Financial limit, set forth for constitution of Tender Committee, is as under:
Sl.
No
1

Estimate in case of PBO

and Total Landed Cost in
case of RFA
Rs.10 Lac to Rs.20 Lac

Above Rs.20 Lac to Rs.250

Lac

Above Rs.250 Lac to Rs.500

Lac

Above Rs.500 Lac

Designation of TC signatory

Accounts Officer
Officers in Grade B from Materials
Department and Indenting / User
Department
Sr. Accounts Officer
Dy Manager from Materials Department and
Indenting / User Department
DFM
Manager from Materials Department and
Indenting / User Department
FM
Senior Manager from Materials Department
and Indenting / User Department

4.2.9.5. Wherever particular grade officer is not available, the next higher grade officer will
represent the Tender Committee.
4.2.9.6. The recommendations of the tender committee shall be concurred by Finance (by
an authority not lower than the Finance representative in T.C.) irrespective of the
fact that the T.C. member happens to be the concurring authority for approval of
the proposal.
4.2.9.7. For tenders requiring TC consideration (based on estimated value) PBO approval
shall also require TC recommendation, Finance Concurrence and approval of
competent authority.
4.2.9.8. TC meeting minutes shall be prepared and signed by all the TC members. The TC
minutes shall be recommendatory in nature and the proposals shall be put up to the
competent authority for approval with signature of all TC members on all the pages.
4.2.9.9. TC shall make conclusive recommendations for the approving authority and all
members of the Committee shall be jointly responsible for the recommendations
made. Difference of opinion, if any, will be specially recorded and brought out in
the proceedings.
4.2.9.10. Standard TC formats for Price Bid Opening proposals and Purchase proposals shall
be as given in Annexure-7 a and Annexure 7 b respectively.
4.2.9.11. The following are the specific responsibilities of the TC Members:
4.2.9.11.1. To ensures that tenders are evaluated as per laid down procedure
4.2.9.11.2. To ensure that the Comparative Statement has been prepared, checked and
signed by officials of Purchase Section and Finance Department
4.2.9.11.3. To recommend the proposal for the approval of competent authority as per DOA.

49

4.2.9.11.4. To sign all the pages of TC minutes

4.2.9.11.5. To ensure that TC minutes are in proper format and all the relevant information
are given in the TC Minutes.
4.2.10. Bank Guarantees (BG)
4.2.10.1.1. Bank Guarantees shall be as per IOCL format. These formats should be made
part of the tender documents so that deviations, if any, can be resolved prior to
placement of order.
4.2.10.1.2. BGs less than Rs. 1 cr may be accepted from any scheduled bank (including
nationalized banks, other scheduled commercial banks, scheduled cooperative
banks and scheduled regional rural banks) as appearing in the Second Schedule
to the RBI Act 1934.
4.2.10.1.3. BGs of Rs. 1 cr and above may be accepted, which is issued by any of the
following Banks:
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
28.
29.
30.
31.
32.
33.
34.

Allahabad Bank
Bank of Baroda
Bank of India
Bank of Maharashtra
Canara Bank
Central Bank of India
Corporation Bank
Indian Bank
State Bank of Bikaner & Jaipur
State Bank of Hyderabad
State Bank of India
State Bank of Mysore
State Bank of Patiala
State Bank of Travancore
UCO Bank
Union Bank of India
United Bank of India
Vijaya Bank
Andhra Bank
Dena Bank
IDBI Bank
Indian Overseas Bank
Oriental Bank of Commerce
Punjab & Sind Bank
Punjab National Bank
Syndicate Bank
ICICI Bank
HDFC Bank
Kotak Mahindra Bank
South Indian Bank
Federal Bank
Exim Bank
ING Vysya Bank
Axis Bank

50

35.
36.
37.
38.
39.
40.
41.
42.
43.
44.
45.
46.
47.
48.
49.
50.

Yes Bank
Citi Bank n.a.
HSBC Bank
Deutsche Bank ag
Bank of America n.a
Royal Bank of Scotland
BNP Paribas
Bank of Nova Scotia
Bank of Tokyo-Mitsubishi UFJ Ltd.
Mizuho Corporation Bank Ltd
Barclays Bank Plc
ANZ Bank
JP Morgan Chase Bank
Standard Chartered Bank
DBS Bank
First Rand Bank

4.2.10.1.4.

BGs from any bank other than above can be accepted only if the same is
counter-guaranteed by any of the above 50 banks.

4.2.10.1.5.

The rating of bank sanctioning the BG should not fall below the rating of 'A'
from Moody's or equivalent (from other rating agency) in case of foreign bank
and rating of at least 'AA' from CRISIL or equivalent (from other rating
agency) in case of Indian banks during the tenor of the BG. In case the rating
falls below threshold level at any time during the tenor of BG, the party will
arrange to replace the BG, at its own cost, through any of the bank acceptable
to IOC.

4.2.10.1.6.

In case there is failure on the part of the vendor and it is intended to encash
the BG or extension is otherwise necessary, the concerned personnel in
Materials Department shall write by registered post / speed post / courier to
the Bank for extension of validity of the BG or encashment thereof as the case
may be at least 30 days before the expiry date of the relevant BG as per the
enclosed proforma (Annexure-9). Local Finance Department shall be
consulted and kept informed.

4.2.10.1.7.

In case a BG whose validity is to expire within 30 days, no payment due to the

vendor on any account of that order shall be released by Finance unless the
BG is extended / encashed except with the approval of the Head of the Unit in
exceptional cases, the reasons for which will be recorded by the concerned
Materials Department for making such payment.

4.2.10.1.8.

When the BGs are no more required in terms of contractual stipulation, the
expired BG shall be returned within 90 days by Finance to the Bank under
intimation to the vendor and Materials Department.

4.2.10.1.9.

Finance shall maintain record of BGs with them and inform the concerned
department regarding BGs that are due for expiry within the next 3 months.

4.2.10.1.10. In case it is decided to encash BGs of PSU due to non-performance / poor

performance, matter should be taken up with the concerned PSUs indicating
clearly our intention for encashment of the BG. Pending settlement of dispute,

51

it is to be ensured that the concerned PSUs should keep the BG adequately

valid.
4.2.10.1.11. Please refer Finance Circular F/12/56 dtd 06.09.2012 for other provisions
regarding Bank Guarantees.
4.2.11. Letter of Acceptance (LOA) / Fax of Acceptance (FOA)
4.2.11.1. After a tender is accepted by the competent authority, Purchase Section shall
issue an LOA / FOA. The letter of Acceptance shall indicate a reference to the
vendors offer. This should be concurred by Finance before issue for more than the
amount specified in DOA.
4.2.11.2. LOA / FOA is issued to covey our acceptance of the selected vendors offer within
validity and it shall be a firm commitment. Salient terms shall be indicated in
addition to the amount.
4.2.11.3. Issuing of FOA / LOA is not mandatory and instead SAP Purchase Order can
straight away be issued.
4.2.11.4. A sample format is enclosed as Annexure 10
4.2.12. Free Issue of Materials (FIM)
The issue of materials to the contractors / vendors shall be governed by the
provisions of General Purchase Conditions and special conditions (if any). The
materials can be issued to the contractors / vendors under following conditions:
When it is provided in the order that the materials for the execution of PO shall be
supplied by IOCL as FIM.
Whenever any material is issued to a vendor / contractor, their acknowledgment
along with date shall be obtained on the material issue vouchers giving full
particulars of the material and quantity issued.
Proforma of Bank Guarantee to be obtained from vendor for material issued to them
is annexed to GPC. Bank Guarantee shall be issued for the total landed cost of Free
Issue Materials. In case the materials are issued from inventory, then the book value
of the FIM appearing in SAP shall be taken for the Bank Guarantee amount.
4.2.13. Purchase Order:
4.2.13.1. FOA / LOA shall be regularized through a Purchase Order (PO). All POs shall be
prepared through SAP as per PO release strategy and shall be issued under the
signature of authorized officer of Materials Department as per DOA.
4.2.13.2. No department other than Materials Department is allowed to sign and issue
Purchase Orders.
4.2.13.3. FOA / Order should specifically ask for order acknowledgement. No further
acceptance is required since the order has already been issued in accordance with
the vendors offer and mutually agreed terms and conditions.

52

4.2.13.4. Wherever POs are placed with reference to any agreement (like Licensor
Agreement involving supply part), the same can form an attachment to purchase
order.
4.2.13.5. Record of Purchase Orders will be maintained by Materials Department. Manual
registers shall be dispended with wherever the information are maintained in SAP.
For purchase orders released through SAP on line release system, signed hard
copy of PO is not required for further processes of GR and Payments. Accordingly,
copy of POs will not be distributed amongst any internal users.
4.2.14. Billing Breakup
4.2.14.1.

In some packages or equipments where it is not possible for the vendor to

despatch all the materials as a single consignment and Indian Oil has agreed to
make prorata payments to facilitate part despatch and / or part payment the
vendor shall submit a billing breakup within a specified time for approval of
Indian Oil.

4.2.14.2.

Maximum number of invoice, for payment purpose, against a billing breakup

shall be fixed while taking approval for billing breakup. Payment against Billing
Breakup shall be made upto 90% of the payment due against dispatch. Beyond
that, payment shall be made only after completion of the entire supply. The
same shall be indicated in the tender document and also in the approval note of
the billing breakup.

4.2.14.3.

Billing breakup shall indicate item-wise or lot-wise dispatch plan consistent with
site requirement. The Billing breakup shall be reviewed by Indenting / User
Department for despatch schedule and rate breakup.

4.2.14.4.

User / Indenting department shall give their recommendation to Materials

Department.

4.2.14.5.

Materials Department shall ascertain that the billing breakup is consistent with
any earlier partial breakup indicated by the bidder in its offer. Totaling shall also
be checked and ensured that it matches with the order amount.

4.2.14.6.

Billing breakup shall be concurred by Finance and approved by the order

approving authority but not above the rank of GM.

4.2.14.7.

Wherever site work is part of purchase order, billing breakup for site work shall
be submitted to Engineer In-Charge who shall take approval of the same without
routing through Materials Department. A copy of the approved billing breakup
issued to the vendor shall be sent to Materials Department for record.

4.2.14.8.

Billing breakup shall not be approved after expiry of the Contractual Delivery
Date (CDD).

4.2.14.9.

Wherever CDD has expired, billing breakup can still be approved only to
facilitate part despatch from vendors works and for taxation purpose only.
Prorata payment shall not be applicable in such case. Such billing breakup
approval do not require Finance Concurrence and can be approved by the order
issuing authority since this approval is without any financial implication on
IOCLs part.

53

4.2.14.10. In case of any deviation to the above procedure, approval shall be taken from
GM.
4.2.15. Amendments to Purchase Orders
4.2.15.1. Any amendment to the purchase orders necessitating changes in specifications,
quantity, price and delivery shall be examined with utmost prudence.
4.2.15.2. Minor changes in specifications shall be agreed if the quality of the material is not
affected from utility angle. However, major changes in the specifications affecting
utility value of the material ordered shall not be accepted if it is possible to obtain
fresh competitive quotations for the materials of the changed specification.
4.2.15.3. In case of lack of competition, such changes shall be agreed upon only after
ensuring that they do not result in acceptance of less favorable terms and if such
changes justify any reduction in price, negotiations shall be conducted to obtain
price reduction and amendment to purchase order can be processed for approval
of the tender approving authority as per DOA.
4.2.15.4. Delivery period amendment shall not be allowed where interest of the Corporation
is adversely affected.
4.2.15.5. Amendment in quantities to accommodate lot sizes, variation in random lengths or
volumes of containers etc., shall be agreed as per the percentage limits of the
value prescribed in the delegation of powers after obtaining approval of the
competent authority.
4.2.15.6. Where alternate mode of transport becomes necessary due to exigencies of
demands, the additional expenditure to be incurred shall be got approved from the
competent authority and amendment shall be issued.
4.2.15.7. Change Order requests, in terms of cost and / or time implications, received on
account of engineering / technical changes / reasons shall require
recommendation from the Indenting / User Department. Such recommendation
shall be sent to Materials Department after taking in principle approval of the
authority who is empowered to approve the Change Order but not above the rank
of ED. Materials Department shall, then, based on such in principle approval, take
approval of Change Order as per DOA.
4.2.15.8. For reduction in order quantity / value no separate approval shall be required.
Necessary amendment in SAP shall be made as per the SAP release strategy
including Finance release (wherever required). This shall be based only on
Indenting / Engineering / User Department recommendation giving reasons for
reduction in scope / quantity. Such recommendation shall be sent to Materials
Department with the approval of DGM of Indenting / User / Engineering
Department. However before exercising such change in the order, Materials
Department to ensure that there is no pending PR for the items for which the
quantity is being reduced.
4.2.15.9. All amendments against a particular Purchase Order shall be assigned a serial
number in proper sequence before issue for identification purpose and distribution

54

of copies may be done as in case of Purchase Order to all concerned for appending
to the original Purchase Orders for easy reference.
4.2.16. Short Closing of Purchase Orders in SAP
4.2.16.1. All unexecuted POs whose contractual delivery date expired one year back shall be
reviewed by taking report from SAP on half yearly basis.
4.2.16.2. In case of Short Supply from the vendors limited to an extent of 10% of item wise
quantity against ordered quantity in case of bulks like pipes, cables, structural
items, bulk chemicals, etc., the concerned Purchase Officer may short close the
relevant item(s) of the Purchase Order provided no concern has been raised by
the Indenting / User department in the interim period. No approval shall be
required to short close such orders.
4.2.16.3. In case of non execution of Purchase order for bulks for more than 10% of
ordered item-wise quantity, indenting department shall be asked to review the
requirement for unexecuted quantity. In case indenting department confirms that
pending quantity is still required, vendor shall be persuaded for delivery of
unexecuted quantities & further actions will follow.
4.2.16.4. In case HOD of indenting department confirms that pending quantity can be short
closed, approval to short close these POs shall be taken from the approving
authority who originally approved the proposal for award of PO but not above the
rank of HOD, Materials Department.
4.2.16.5. In case of purchase orders wherein advance payments have been made to
vendors & the same are still unexecuted in full / part, for more than a year
beyond CDD, the indenting department shall be asked to review the requirement.
In case indenting department confirms that unexecuted quantity is still required,
vendor shall be persuaded for delivery of the pending quantities. In case the HOD
of indenting department confirms that unexecuted quantity can be short closed,
approval to short close such POs shall be taken from the approving authority only
after recovery / adjusting the advance payments. The approval to short close
these POs shall be taken from the approving authority who originally approved the
proposal for award of PO but not above the rank of HOD, Materials Department.
The above procedure shall apply to other non bulk orders also even where
advance is not paid.
4.2.16.6. Before closing any PO for Proprietary items, consent of User shall be taken.
4.2.16.7. In case of Projects, short closure of PO shall be done only after the completion of
the project and with the approval of DGM of Project Engineering.
4.2.16.8. For short closing, POs shall be de-released in SAP and delivery completion
indicator ticked in Delivery tab against each item to be short closed. After short
closing, the PO shall be kept de-released only. However, if there is any specific
requirement related to pending GRVs or pending payments, etc. POs can be again
released in SAP after getting request from concerned section.

55

CHAPTER - V
PUBLIC PROCUREMENT POLICY FOR MICRO & SMALL ENTERPRISES (MSE)
5.1. Circular No. F/12/67 dtd 20.12.2013 shall be applicable for procurement policy for
MSE Vendors.
5.2. Illustrative Tender Conditions for Benefits / Preference for Micro & Small
Enterprises (MSEs)
I. As per Public Procurement Policy for Micro & Small Enterprises (MSEs) Order, 2012 issued
vide Gazette Notification dated 23.03.2012 by Ministry of Micro, Small and Medium
Enterprises of Govt. of India, MSEs must be registered with any of the following in order to
avail the benefits/preference available vide Public Procurement Policy MSEs Order, 2012.
a. District Industries Centers (DIC)
b. Khadi and Village Industries Commission (KVIC)
c. Khadi and Village Industries Board
d. Coir Board
e. National Small Industries Corporation (NSIC)
f. Directorate of Handicraft and Handloom
g. Any other body specified by Ministry of MSME
II. MSEs participating in the tender must submit the certificate of registration with any one
of the above agencies indicating the details of the particular tendered item along with their
bid.
III. The registration certificate issued from any one of the above agencies must be valid as
on close date of the tender. The successful bidder should ensure that the same is valid till
the end of the contract period.
IV. The MSEs who have applied for registration or renewal of registration with any of the
above agencies / bodies, but have not obtained the valid certificate as on close date of the
tender, are not eligible for exemption/preference.
V. The MSEs registered with above mentioned agencies / bodies are exempted from
payment of Earnest Money Deposit (EMD).
VI. Purchase Preference Subject to meeting terms and conditions stated in the tender
document including but not limiting to prequalification criteria, twenty percent of the total
quantity of the tender is earmarked for MSEs registered with above mentioned
agencies/bodies for the tendered item. Where the tendered quantity can be split, MSEs
quoting a price within a price band of L1 + 15 percent shall be allowed to supply up to 20
percent of total tendered quantity provided they match L1 price. In case the tendered
quantity cannot be split, MSE shall be allowed to supply total tendered quantity provided
their quoted price is within a price band of L1 + 15 percent and they match the L1 price. In
case of more than one such MSEs are in the price band of L1 + 15% and matches the L1
price, the supply may be shared proportionately.

56

VII. Out of the twenty percent target of annual procurement from micro and small
enterprises four percent shall be earmarked for procurement from micro and small
enterprises owned by Scheduled Caste & Scheduled Tribe entrepreneurs. In the event of
failure of such MSEs to participate in the tender process or meet the tender requirements
and L1 price four percent sub-target so earmarked shall be met from other MSEs.
VIII. To qualify for entitlement as SC/ST owned MSE, the SC/ST certificate issued by District
Authority must be submitted by the bidder in addition to certificate of registration with any
one of the agencies mentioned in paragraph (I) above. The bidder shall be responsible to
furnish necessary documentary evidence for enabling IOCL to ascertain that the MSE is
owned by SC/ST. MSE owned by SC/ST is defined as:
a. In case of proprietary MSE, proprietor(s) shall be SC /ST
b. In case of partnership MSE, The SC/ST partners shall be holding at least 51% shares in
the enterprise.
c. In case of Private Limited Companies, at least 51% share shall be held by SC/ST
promoters.
NOTE:
1. In case where tender quantity can be split and MSE vendor is already getting order
for more than 20% of the tender value, no additional purchase preference is required
to be given in that tender.
2. In case MSE vendor is already getting order for less than 20% of the tender quantity,
purchase preference to this and other MSE vendors (together) shall be given only up
to the differential quantity to make total as 20% to MSE vendor.

57

CHAPTER - VI
CENTRAL PROCUREMENT CELL (CPC)
6.1.CPC was formed in 2007 to procure materials centrally for all the Refinery Units. As per
the revised scope in 2009, CPC lines up Rate Contracts (Annual / Long Term) for
materials which are commonly used by the Refinery Units. These Rate Contracts will be
used to place Call-Up Purchase Orders by all the Refinery Units as and when required.
6.2.Refinery Units will use the Rate Contracts for their revenue requirements only.
6.3.Estimate and PR for CPC items shall be prepared as under:
Sr.
No.
1

2
3

Item
All Catalysts and Chemicals e.g. MFA, Stadis450, Liquid Anti Oxidant, Cetane Improver,
Lubricity Additive, Butane -1, Morpholine, Tri
Sodium Phosphate (TSP), Perchloroethylene, N
MDEA, Orange Dye, Tetra Ethylene Glycol
(TTEG), Anti-oxidant for ATF, Demulsifier,
Corrosion Inhibitor, Hydrazine Hydrate, Rock
Salt etc. etc.
All Safety items including AFFF where HSE is
responsible for technical specifications.
Pipe, Pipe-fittings, flanges, Bearings, Mech.
Seals, Cable etc. etc where M&I is responsible
for technical specifications

Department responsible for

furnishing approved PR &
Estimate
RHQ-Technical / CPC (with
vetting of RHQ Technical)

RHQ HSE / CPC (with vetting of

RHQ HSE)
M&I / CPC (with vetting of M&I)

6.4.Rate Contracts lined up by CPC

1. Re-allocation of Quantity / Value after placement of Purchase Order or Rate
Contract shall be done by CPC. Re-allocation of contract value shall be done with
approval of approving authority not above the rank of GM. No finance concurrence
shall be required since there is no additional financial implication.
2. Validity: Extension of validity of Rate Contract without financial implication shall be
done with the approval of the authority who has approved the proposal but not
above the rank of GM with Finance vetting.
3. Issuance of call up orders by Units: Once a Rate Contract has been approved
and outline agreement created in SAP, no further approvals shall be required at the
time of placement of call up order. However, the dealing Purchase Officer shall
ensure that the call up order is being issued against a properly approved Purchase
Requisition duly released in SAP.
The above shall also be applicable for Rate Contracts lined up by Units for which
outline agreement has been created in SAP.

58

CHAPTER - VII
E-TENDERING
7.1.

Introduction

7.1.1. Indian Oil Corporation Ltd. is using the e-tender portal (https://iocletenders.gov.in)
developed by NIC, which is a secured and user friendly system to enable bidders to
search, view, download and participate in tenders directly. All interested bidders are
required to register themselves with the portal indicated above and enroll their
Digital Signature Certificate (DSC) with the user id for participation in the tender.
7.1.2. e-tendering shall be done in all cases where estimate value is Rs. 5 lakh or more
(please refer Finance Circular F/12/72 dtd 17.06.2014).
7.2.

Approved Vendor List

7.2.1. All the approved vendors shall be considered for e-tendering.

7.2.2. In case an approved vendor does not have a Digital Signature Certificate (DSC) or is
not registered / does not get registered on the portal within a specified time, tender
specific approval for exclusion of the vendor in the e-tender may be obtained from
GM explaining reasons thereof. However, the vendors name shall continue to
remain in the approved vendor list.
7.2.3. In case some vendors refuse to participate in e-tendering citing reasons of
confidentiality, the case shall be reviewed and, if required, approval taken from GM
for hard copy tendering.
7.3.
7.3.1.

Tender Document
The e-tender documents may consist of any or all of the following:
Sl
No
(i)
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
(viii)
(ix)
(x)
(xi)
(xii)
(xiii)

Document

Type of file

Index
Cover Letter of tender indicating among other things the
EMD amount, time schedule for sale period, tender
submission, pre bid meeting and tender opening
Notice Inviting Tender / Letter Inviting Tender with PQC
Special instruction to Bidders
Instructions to bidders for participation in E-Tendering
Agreed Terms and Conditions (Questionnaire) for
indigenous and foreign bidder
General Instruction to the Bidder
General Purchase Conditions
Technical specifications
Proforma of Declaration of Black Listing / Holiday Listing
Un-priced Schedule for mentioning quoted / not-quoted
List of Board of Directors (or reference link to web
address may be given)
Integrity Pact document in case of tender having
estimated cost of Rs 10 Cr or more

pdf
pdf

59

pdf
pdf
pdf
xls
pdf
pdf
pdf
xls / pdf
xls
pdf
pdf

(xiv)
(xv)
7.4.

Format for quoting technical and commercial deviations

Price Schedule format (Bill of Quantity or BOQ) for
quoting prices

pdf / xls
xls

Miscellaneous points

7.4.1. In case of limited tenders, the e-tendering portals auto e-mail to the bidder shall be
considered as sufficient Proof of Despatch (POD).
7.4.2. The responsibility of downloading the tender documents including corrigenda, if any,
and subsequent uploading of offer shall rest with the bidder.
7.4.3. Vendors can also view the tender at the Central Public Procurement Portal of
Government of India (https://eprocure.gov.in/)
7.4.4. When any tender is hosted on the IOCL e-tender website, it automatically gets listed
on
the
Central
Public
Procurement
Portal
of
Government
of
India
(http://eprocure.gov.in/). This satisfies the Office Memorandum No. DPE/3(3)/10-Fin
dated 20th December from Department of Public Enterprises (DPE) conveying the
mandatory applicability of the instructions issued by Department of Expenditure
(DoE) on the subject vide its Office Memorandum No. 10/1/2011-PPC dated 30th
November,2011.
7.4.5. In case of press tenders the concise version of NIT should be published in the
newspaper requesting bidders to visit our website https:\\iocletenders.gov.in for
complete details.
7.4.6. It is the vendors responsibility to ensure that a valid DSC has been registered on the
portal and the same has sufficient validity.
7.4.7. Bids will be accepted only through the e-tender portal. However, it should be clearly
mentioned that tender issuing authority is not responsible for the delay / nondownloading of tender document by the recipient due to any problem in accessing
the e-tender website. The tender issuing authority is also not responsible for delay in
uploading bids due to any problem in the e-tender website.
7.4.8.

The scanned copy of the EMD (bank draft / bank guarantee / ECS details) has to be
uploaded in the un-priced bid.

7.4.9.

The summary of un-priced bid opening can be viewed by all bidders. The complete
offer, techno-commercial queries and their subsequent clarifications are visible only
to the respective bidder.

7.4.10. Tender can be cancelled at any stage by uploading a corrigendum for cancellation in
the e-tender website without assigning any reason. The cancellation of tender shall
be taken in accordance with the relevant clause of the Materials Management
manual.
7.4.11. Tender document fees will not be applicable.
7.4.12. In case of limited tender, the name of the approved bidders shall be selected while
uploading the tender. The bidders shall be informed beforehand to ensure that they
are registered in the e-tender portal with a valid DSC. After publication of the tender

60

in website, a system generated email will be sent to the registered email id of the
bidders informing them about the tender.
7.4.13. Notwithstanding any other condition / provision in the tender documents, in case of
ambiguity or incomplete documents pertaining to PQC, bidders shall be given only
one opportunity with a fixed deadline after bid opening to provide complete and
unambiguous documents in support of meeting the Pre Qualification Criteria. In case
the bidder fails to submit any document or submits incomplete documents within the
given time, the bidders tender will be rejected. This provision shall also be
incorporated in the tender documents.
7.5.

Resubmission and Withdrawal of Bids

a. As per standard feature, a bidder is allowed to submit and withdraw / replace
bids before the bid due date.
b. System does not allow withdrawal of offer after the expiry of final date & time of
submission of bids.

7.6.

Receipt of Tenders

7.6.1.

Late and delayed bids is not permitted in the e tendering portal. No bid can be
submitted after the due date and time of submission. No bid can be modified after
the dead line for submission of bids.

7.6.2. The system time (IST) displayed on e-tendering web page shall be the reference
time and no other time shall be taken into cognizance.
7.6.3. No manual bids shall be permitted along with electronic bids.
7.6.4. The Un-priced and Price Bids have to be submitted online only. However, documents
like EMD and any other documents mentioned in the tender which need to be
submitted in hard copy have to be submitted offline.
7.6.5. In case of limited tender, bids can be uploaded by only those bidders who have been
invited to bid through e-tender website and through the same User ID as per the
invitation
7.6.6. Before the bid is uploaded, the bid comprising of all attached documents should be
digitally signed using digital signatures issued by an acceptable Certifying Authority
(CA) in accordance with the Indian IT Act 2000.
7.7.

Opening of Tender

7.7.1. The un-priced and priced bids shall be opened in the portal by two officers
irrespective of grades from Materials and / or Finance departments.
7.7.2. These representatives shall log in the website through their separate User ID,
password and DSC. After opening by both the representatives, the bids can be
downloaded from the website for techno-commercial evaluation.

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7.7.3. Materials Department representative will assign the name of Finance and Technical
evaluators.
7.7.4. Wherever required, price implication has to be taken in hardcopies in sealed cover
since the feature to include price implication in the portal is presently not available.
7.7.5. In case where Price implications are also taken against a tender, then the same
along with price bids on the portal shall be opened by one representative each from
Finance and Tendering departments.
7.7.6. A printout of bid opening summary shall be placed in the file. The same shall contain
the following information:
i.
Bid Opening date & time
ii.
Name of bid openers
iii.
Number of total valid bids
iv.
Tender reference number, tender ID and tender title.
v.
Name of bidders whose price bid is being opened.
vi.
Price Implication, wherever applicable
7.8.

Witnessing of Tender opening

Tender opening can be witnessed by bidders by logging into the e-tender website.
Tenders shall, however, be opened irrespective of whether the bidders witness it or
not.

7.9.

Techno-commercial Evaluation

7.9.1. Techno - commercial queries are raised and clarifications sought on the portal.
7.9.2. The Technical Bid Analysis (TBA) shall be prepared by indenting department in hard
copy. Signed copy of the same shall be sent to Tendering department with due
approval of competent authority.
7.9.3. Technical evaluation results of bids (acceptance / rejection) shall be entered in the
website by Indentor / Technical Evaluator.
7.9.4. Commercial Bid Analysis (CBA) shall be prepared by Tendering department in hard
copy. Signed copy of the same shall be kept in the file and sent for Price Bid opening
(PBO) approval.
7.9.5. Finance will enter the commercial evaluation results of bids (acceptance / rejection)
in the website after checking the PBO proposal. This shall be required only in case
where Finance concurrence is required. In all other cases Materials representative
shall enter this information.
7.9.6. On receipt of PBO approval, the Tendering department representative will enter the
final techno-commercial evaluation details in the website.
7.9.7. The bid evaluation and further processing shall be done as per procedure laid down
in the Materials Management Manual for physical tender.

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7.10. Price Bid opening

The price bids of techno-commercially acceptable bidders are opened after
completion of techno-commercial evaluation. The price bids are downloaded from
website to prepare Comparative Statement.
7.11. Digital Signature
This is a unique digital code which can be transmitted electronically and primarily
identifies a unique sender. The Controller of Certifying Authorities of India (CCA) has
authorized certain trusted Certifying Authorities (CA) who in turn allot on a regular
basis Digital Certificates, Documents which are signed digitally are legally valid
documents as per the Indian IT Act (2000).
In order to bid for Indian Oil e-tenders, all the bidders are required to obtain a
legally valid Digital Certificate as per Indian IT Act from the licensed Certifying
Authorities (CA) operating under the Root Certifying Authority of India (RCAI),
Controller of Certifying Authorities (CCA) of India. The Digital Certificate is issued by
CA in the name of a person authorized for filing bids on behalf of her Company. A
bidder can submit bids online only after digitally signing the bid documents with the
above allotted Digital Signatures.
Bidders have to procure Digital Certificate (Class 3) on their own from any of the
Certifying Authorities in India.
7.11.1. Scope of e-Tender
a. Inclusions: Issue of tender, Pre-bid meeting, corrigendum, receipt of bids,
opening of bids, Technical query, commercial query, entry of techno-commercial
evaluation results, pre price bid meeting and price bid opening.
b. Exclusions: Price implication, price negotiation, Technical Bid Analysis,
Commercial bid analysis, tender committee minutes, price comparative
statement, order proposal and ordering.
7.11.2. Requirement Of Physical Documents
Following physical documents shall be kept in the Purchase file:a. Duly approved Purchase Requisition with Estimate.
b. Tender details downloaded / emailed from e-tender website
c. Intimation for the limited tender published (Emails forwarded to Tender inviting
Authority from website, in case of limited / single tender)
d. Hard copy of all approvals taken for the subject tender.
e. Limited Bidders Details (List of bidders to whom tender enquiry was issued)
f. Corrigendum Details (if corrigendum issued)
g. Number of bids submitted against the tender enquiry.
h. Bid Opening statement

63

i.
j.
k.
l.
m.
n.
o.
p.

EMD details / documents (if applicable).

Signed Technical Bid Analysis (TBA) and Commercial Bid Analysis (CBA)
Duly approved technical recommendation from indenting department.
Price bid opening proposal / TC minutes.
Signed and concurred (wherever applicable) Price Comparative Statement.
Award proposal
Fax of Acceptance (FOA) or SAP Purchase Order reference.
Post order correspondence, if any

7.12. Important Note

7.12.1. Audit trails and system logs to be maintained for all transactions on the e tendering
portal during complete tendering process. Historical records for required number of
years to be maintained in soft form with adequate data backup, recovery and
archival.
Processes not explained here are same as conventional tendering.

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CHAPTER - VIII
IMPORTS
8.1.

Ordering
All imported orders will normally be placed on FOB / FCA port of exit basis. However,
order is placed indicating IOCLs right to convert it into a CFR order later at the
freight charges quoted by the vendor. In rare cases tender itself may state ordering
on CFR basis (in such cases also clearance from TRANSCHART needs to be taken).
These orders shall be governed by the relevant INCOTERMS (present INCOTERMS
2010) published by the International Chamber of Commerce (ICC) that are widely
used in International commercial transactions.

8.2.

Mode of Payment: Payment may be made through any of the following:

8.2.1. Letter of Credit or L/C

Most foreign vendors insist on payment through L/C. In order to save time and
avoid post PO hassles, L/C draft should be discussed and mutually agreed with the
bidders prior to price bid opening. Approval should be taken from the authority
approving the order for any specific deviation to the standard terms. Unless specific
dates or milestones for opening of L/C have been mutually agreed, L/C shall
normally be opened on receipt of PO acceptance from the vendor and receipt of
Performance Bank Guarantee, if any (these terms should be indicated in the tender
documents itself). IOCL normally opens irrevocable, unconfirmed L/C. However,
some vendors may insist on confirmed L/C. This can be agreed with specific
approvals. Confirmation charges, in such case, shall be to vendors account. L/C
expiry date is considered as 30 days from the Contractual Delivery Date (B/L or
AWB date) Item description in the L/C shall be the same as the Purchase Order and
EPCG License, if any. Port of loading and port of discharge have to be clearly
indicated in the L/C. All documents required for release of payment (considering the
payment terms of the original order) shall be clearly indicated in the L/C along with
the details of Price Adjustment clause in case of delay in shipment. Documents are
made to the order of the L/C issuing bank. On receipt of payment advice, the Bank
releases the original documents and endorses them in the name of IOCL. In case
L/C has been opened by Units and payment made from there, these documents will
then be sent to the Port Office for clearance of consignment.
8.2.2. Wire Transfer / Telegraphic Transfer (TT)
Wire Transfer payment may be used in case of small value items or when the
consignments are of very small size, weight and can be transported by Air. In case
of DDP (deliver duty paid) shipments also, payment may be made through Wire
Transfer. Acceptance of Shipper regarding any change in mode of payment shall be
taken in advance before the booking of the vessel for shipment or before the air
freight. The despatch documents are made to the order of Indian Oil Corporation
Ltd. as the original documents are not routed through the bank. These originals are
sent directly to IOCL. On finding the documents in order, payment clearance is given
to Finance for releasing the payment to the vendor.

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8.2.3.

Cash against Documents (CAD)

Here all the documents are finalized with the shipper prior to submission of the
documents to the bank. Immediately on shipment these documents are submitted
by the Shipper to IOCLs nominated Bank for payment. On getting the original
documents, Bank intimates IOCL for payment.

8.2.4.

Any change in mode of payment after placement of order will require approval of
HOD Materials with Finance concurrence.

8.3.

Sea Freight

8.3.1.

Vessel Booking
Imported consignments are despatched either as Containerized Cargo or as BreakBulk Cargo (which cannot be shipped in containers). IOCL, Mumbai Office lines up a
Rate Contract with Shipping Corporation of India (SCI) for arrangement of
transportation from all the major international seaports in the world to the Indian
Seaports (Nhava Sheva, Mumbai & Kolkata).
There is no contract for USA and transport has to be lined up on case to case basis
through TRANSCHART. For containerized cargos coming from USA, case to case
freight charges are being sought from SCI and OPT (M/s Overseas Project Transport
Inc) through TRANSCHART. Similarly for all break-bulk cargos, details are mailed to
TRANSCHART who inform the rates quoted by their freight forwarders. The freight
thus obtained is compared with the vendors original quoted freight charges for
finalization of the transportation on lowest basis by IOCL. In case the freight charges
obtained through TRANSCHART is more than the quoted freight charge of the
vendor, then either TRANCHART negotiates with its freight forwarders and asks them
to match IOCLs rates or gives a No Objection Certificate (NOC) to IOCL to import
the material on CFR basis. No Finance concurrence is required for such change in
order.
A 30 days advance intimation of readiness of cargo for shipment shall be given by
the Shipper to the nominated Freight Forwarder in case of Containerized cargos and
45 days for Break-Bulk cargos. In case of Containerized cargos, nominated freight
forwarders are asked for arrangement of transportation of the total order up to India
within the contractual rates. The Vendor shall furnish the details of consignment such
as outside dimensions, weights (both gross and net), number of packages, type and
number of containers required, technical description and drawings, name of the
supplier, port of loading etc. to enable the nominated freight forwarder arrange the
shipment.
In case of Break Bulk consignments of ODC (over dimensional consignments) nature,
port of destination in India is finalized before the intimation of shipment so that any
last moment change can be avoided since in India all seaports are not equipped to
handle ODCs. In case discharge has to be taken at the Ro-Ro Jetty, it will be clearly
informed to the bidders to quote for Ro-Ro Jetty discharge during tendering stage
and arrange for the same during arrival of the consignment at the destination port.
In case the same could not be finalized during tendering stage, separate tender
should be floated for arrangement of transportation upto the destination port or
arrangement of Barge for discharge upto Ro-Ro Jetty.

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8.3.2.

Documentation details
Following documents will be required for making the payment in case of foreign
shipments. To avoid last minute problems and delays, the draft documents shall be
taken from the Shippers well in advance and corrections made and sent back to the
Shipper for submission of correct documents to IOCL. The documents shall be in
English language only. Following documents are mentioned in case of L/C payment.
Minor changes, as required, are to be made in case of wire transfer / CAD.

a.

b.

c.
d.
e.
f.
g.

h.

i.
8.4.

Original full set (3/3) + 3 Copies of Signed 'clean on board' Bill of Lading made
out to order of L/C Issuing Bank, notify Applicant, marked Freight to pay (FOB
shipment) / Freight pre-paid (CFR shipment); indicating the Letter of Credit No,
Date of Issuance and Purchase Order no. Ultimate consignee with the Refinery
details, container details, total Gross Weight and Volume of the cargo. FOB port of
shipment, Destination port and Vessel Name is a must in the B/L. B/L without any
date is considered invalid for payment.
Original signed commercial Invoice in 1 original + 3 Copies indicating Letter of
Credit No., Item Description and quantity on the invoice. This should match exactly
with the item description on L/C and EPCG License (if any). Ultimate consignee
(Refinery Name) and details with total invoice value should be indicated on the
invoice. In case of partial shipments, actual invoice value of the partial part should
be mentioned, clearly indicating Partial Shipment on the invoice.
Original Packing List (PL) in 1+ 3 Copies. Item Description on the PL shall match
exactly with the description as in L/C, EPCG License and Invoice.
Original Certificate of Origin (CO) in 1 original and 2 copies certified by local
chamber of commerce.
Original copy of beneficiary's fax / e-mail sent to applicant informing shipment
details.
Original Inspection Release Note (IRN) from the Third Party Inspection Agency
certifying acceptance of goods.
Original Seaworthy Certificate issued by the Shipping Company or their Agent (In
Duplicate) stating that the carrying vessel named in the B/L is a seaworthy vessel
and is not more than 25 years old and that it is approved under institute
classification clause (class maintained equivalent to Lloyds 100 A1) and has been
registered with an approved classification society.
Copy of Letter from IOCL for the acceptance of Performance bank Guarantee for
10% of the order value valid till Guarantee period + 3 Months. In absence of this
letter, 10% of FOB value shall be retained while making payment.
Copy of Dispatch clearance (DCC), if any.
Air freight
In case of urgency of material, the same may have to be air freight. Approval has to
be taken from competent authority (with Finance concurrence) with proper
justification. In case the air freight charges are more than the approved freight of
the purchase order, the same is put up for approval for the acceptance of extra
freight charges. There may also be cases where the Purchase Order itself calls for air
freight (usually, in case of consignments with very small weight and size where there

67

is a possibility of misplacement of the consignment in sea transportation and also in

case of urgency).
For Air freight, Port Office at Mumbai lines up a Rate Contract for arrangement of air
freight from all the major international airports worldwide. On getting the packing
details (L x W x H), volumetric weight should be calculated and compared with the
Gross weight of that cargo and whichever is higher will be considered for calculation
of air freight charges. Weight above 0.5 Kg will be considered as 1 Kg and less than
0.5kg as 0.5kg for determining the freight charges. All other terms will be as per the
Rate Contract terms and conditions. In order to avoid payment of ODC charges, the
cargo should be broken up into smaller pieces, if possible.
8.4.1. Air Freight: Important Note
Following clauses should be incorporated in all import PO especially for airfreight so
that IOCL can save on air freight charges. The same are also incorporated in the Air
Import Consolidation Contract as well to take care of this before accepting the
cargo. However, it is desired that shipper must also ensure this.
8.4.1.1. ODC CARGO
Shipper will ensure that the goods are properly packed to withstand the sea / air
and Road Journey and the markings for gross weight, net weight, material
description, IOCL material code, safety precautions are boldly and legibly put on at
least two sides of the packages. Packing of the individual boxes should be done in
such a way that the consignment does not become an ODC (Over Dimensional
Consignment) for Air Transport.
When the size of the package exceeds the standard pallet (PIP) dimensions (for Air
Transport) which are given below, they will be treated as ODC:
Length
Width
Height
Maximum Gross Weight
Maximum Net Weight
Floor Load Limitations

121 inches
84 inches
60 inches
4626 Kg
4508 Kg
90.7 Kg /Sq Ft

In case of ODC consignments, Shipper to inform IOCL (PO Issuing Authority) to

settle the freight rates & only after receiving IOCLs confirmation, the goods must
be handed over to the overseas forwarding agents.
8.4.1.2. Dangerous Goods Clause
The Shipper has to arrange shipment / air freighting of the dangerous and normal
consignment separately in two different air way bills instead of air freighting both
the consignment on a single air way bill. The necessary shipping documents like
invoice etc. must be prepared separately by the shipper (Not to exceed PO Order
Value) and handed over to the overseas freight forwarding agents of IOCL. The
Shipper has to ensure that the that DGR and normal cargo are air freighted by
overseas freight forwarding agents of IOCL under two separate HAWB / MAWB.

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8.4.2. Documentation for air freight

Since the air consignment will reach the destination Air Port in India maximum within
2-3 days and getting the originals within this period through L/C is not possible, the
vendor is advised to issue the Airway Bill (AWB) in the name of Indian Oil
Corporation Ltd, with the Refinery Name only (along with the copies of other
shipping documents made to the order of Indian Oil Corporation Ltd, Refinery
Name). For Customs clearance, scan copies of shipping documents made to the
order of Indian Oil Corporation Ltd, with the Refinery Name is used. However at a
later stage, original AWB has to be submitted to the Customs Authorities for formal
regularization.
Hence, vendors should be advised to send all original shipping documents directly to
the concerned Port Office of IOCL (vendor is requested to follow up with the Freight
Forwarder for issue of Airway Bill) so that documents can be submitted to the
customs at the earliest possible time. Payment is usually made through Wire
Transfer.
8.5.

Submission of documents and Payment release

8.5.1. L/C Mode

In case of L/C payment, vendor will be required to submit the original shipping
documents to their bank within 21 days from the date of Bill of Lading (15 days in
case of shipment from nearby countries whose vessel normally reaches India within
21 days of B/L date).
Immediately on issue of original B/L to the Shipper, regular follow up should be
made with the Shipper to submit all the documents to the bank so that original
documents can be retired in time (after payment) and can be produced to the
Customs Authorities in time to avoid any demurrage and detention of the cargo and
cleared within the free period given by the vessel owner.
If documents are found correct, Beneficiary Bank forwards the documents to the L/C
Issuing Bank for payment. On receipt of documents, L/C Issuing Bank forwards
them to IOCL Finance along with copies of the documents received by them. These
documents are checked and payment advice given to the Issuing Bank in case the
documents are checked and found compliant. Payments shall be released as per
timeline defined in UCP 600.
The bank may also refer some discrepancies in documents to IOCL. If IOCL accepts
such discrepancies without reference to the Supplier, then also the document shall
be considered compliant.
In cases where discrepancies are required to be referred to the vendor for
resolution, Materials Department shall take up with the vendor for resolution. A copy
of such communication is sent to Finance so that the bank can be suitable informed.
Such cases shall not fall under the timeline defined in UCP 600.
Details of EPCG license (if any) shall be informed to the concerned Port Office. In
case of Customs clearance of any partial shipments of package item, Port Office
shall ensure the use of EPCG License proportionately.

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8.5.2.

Wire transfer / CAD

Minor changes, as required, are to be made in case of wire transfer / CAD.

8.6.

Export Promotion Capital Goods (EPCG) Scheme

Export Promotion Capital Goods (EPCG) scheme under the new Foreign Trade Policy
2009-14, allows import of Capital goods for pre-production, production and post
production at zero Custom Duty, subject to an export obligation of 6 times of duty
saved on capital goods of FOB basis imported under EPCG scheme, to be fulfilled
within a period of 6 years reckoned from Authorization issue date.
Block year for export obligation shall be, 1st to 4th year- 50% and 5th to 6th year
50%. IOCL can discharge the export obligation by way of direct export as well as
through third party export.
"Capital Goods" means any plant, machinery, equipment or accessories required for
manufacture or production, either directly or indirectly, of goods or for rendering
services, including those required for replacement, modernization, technological upgradation or expansion. It also includes packaging machinery and equipment,
refractories for initial lining, refrigeration equipment, power generating sets, machine
tools, catalysts for initial charge plus one subsequent charge, equipment and
instruments for testing, research and development, quality and pollution control.
Import of second hand goods is not allowed.
"Spares (including refurbished / reconditioned spares), moulds, dies, jigs, fixtures,
tools, and refractory for initial lining; for existing plant and machinery (imported
earlier, under EPCG or otherwise), is allowed to be imported under the EPCG scheme
subject to an export obligation equivalent to 50% of the export obligation as
mentioned above to be fulfilled in 6 years for zero duty EPCG. This would however be
subject to the condition that the CIF value of import of the above spares etc. will be
limited to 10% of the value of plant and machinery imported under the EPCG
scheme. In case of plant and machinery not imported under the EPCG scheme, CIF
value of import of the spares etc. will be limited to 10% of the book value of the
plant and machinery
In case, IOCL fails to fulfill prescribed export obligation, it has to pay the custom
duty plus interest for the period of delay.

8.6.1. Invalidation Letter

IOCL can also authorize indigenous suppliers to import capital goods under
invalidation letter. Here, IOCL shall make a request to the licensing authority (DGFT
- Directorate General of Foreign Trade) for invalidating the EPCG license for direct
import by the indigenous supplier. IOCL informs the DGFT office regarding the name
and address of the organization from which IOCL intends to source the capital goods.

70

On receipt of such request, either at the time of issuance of license or subsequently,

the licensing authority shall make the license invalid for direct import and issue an
invalidation letter, in duplicate. The licensing authority shall simultaneously grant
permission to IOCL to procure the capital goods indigenously in lieu of direct import.
The indigenous manufacturer then applies for the issuance of Advance License to the
licensing authority for deemed exports for import of inputs including components
required for the manufacture of capital goods to be supplied to IOCL.
8.6.2. Procedure for Applying EPCG License / Invalidation Letter
Immediately on placement of order, Purchase shall forward the request for issue
of EPCG Import License / Invalidation Letter to Finance. Purchase shall provide all
details like Item description, Quantity, Unit of Measure (UOM), Customs Tariff /
HS Code, Country of Origin, Port of Discharge, CIF value, nature and primary use
of capital goods to the concerned Finance Department. IOCL Finance applies to
DGFT office for grant of EPCG License / Invalidation Letter.
For the purpose of applying Invalidation Letter under the EPCG License, along with
the above details following documents received from indigenous supplier are also
required:

Import Export Certificate

Copy of valid RCMC (Registration-cum-Membership Certificate) issued by FIEO
(Federation of Indian Exports Organizations)
Industrial License
SSI Registration, if any
DGFT office takes at least 15 days for issue of EPCG License and another 15 days for
issue of invalidation letter from the date of receipt of application from Finance along
with all required documents. Hence, application of EPCG License / Invalidation letter
should be sent to Finance well in advance of the delivery period. Approximately 2
months time is required from sending application to Finance to receiving the
Invalidation Letter.
An EPCG License is issued with a specific duty saved amount and corresponding
export obligation. EPCG authorization is issued with a single port of registration for
imports. However; this can be transferred to any of the registered Indian Port having
the facility of Customs clearance.

8.6.3. Activities after clearance of Imported Consignments against EPCG License

Along with the EPCG license, IOCL submits a Nexus Certificate from an
independent Chartered Engineer to the Customs authorities at the time of clearance
of imported capital goods for availing the Zero duty benefit.
A copy of the Nexus Certificate has to be submitted to the concerned Regional
Authority (RA) along with copy of the Bill Of Entry, within 30 days from the date of
import of the Capital Goods. Reasonable wastage, if any, anticipated at the time of
installation of capital goods will also be certified by the Chartered Engineer in the
Nexus Certificate.

71

RA shall, thereafter, forward a copy of the EPCG authorization to the concerned

Jurisdictional Central Excise Authority. The wastage so permitted at the time of
issuance of authorization would be allowed to be sold on payment of applicable duty
on sale of scrap / waste.
IOCL shall produce to the concerned RA a certificate from the Jurisdictional Central
Excise Authority, confirming installation of Capital Goods at factory / premises of
authorization holder or his supporting manufacturer(s) / vendor(s) within six months
from date of completion of import for capital goods. In the case of import of only
spares, the installation certificate shall be submitted by IOCL within a period of three
(3) years from the date of import.
8.7.

Customs Clearance Procedure

All goods imported into India have to necessarily pass through the procedure of
customs for proper examination, appraisal, assessment and evaluation. This helps
the Customs authorities to charge proper duties and also check the goods against
illegal import. No import is allowed in India if the importer does not have the IEC
number issued by DGFT (except personal use).

8.7.1. Bill of Entry

A Bill of Entry, also known as Shipment Bill, is a statement of the nature and value of
goods to be imported or exported, prepared by the Importer or its representative
and presented to a Custom House. The importer clearing the goods for domestic
consumption has to file Bill of Entry in four copies; original and duplicate are meant
for Customs, third copy for the importer and the fourth copy is meant for the bank
for making or adjusting remittances.
If the goods are cleared through the EDI system, no Manual Bill of Entry (BE) is filed
as it is generated in the computer system, but the importer is required to file a cargo
declaration having prescribed particulars required for processing of the BE for
customs clearance.
In the non-EDI system & EDI System along with the bill of entry filed by the importer
or his representative the following documents are also generally required:

Signed Commercial invoice (Pro Forma, Shipping Invoice etc not accepted)
Packing list
Bill of Lading or Delivery Order / Airway Bill
GATT declaration form duly filled in
Importers / CHAs declaration
License wherever necessary
Letter of Credit / Bank Draft wherever necessary
Insurance Policy
Import License
Industrial License, if required
Test report in case of chemicals
Duty Entitlement Pass Book (DEPB) / Focus Marketing (FM) scrips in original
Catalogue, Technical write up, Literature in case of machineries, spares or chemicals
as may be applicable
Separately split up value of spares, components machineries
Certificate of Origin. (Original is Mandatory in case of Preferential duty benefit to be
claimed)

72

8.7.2. Amendment of Bill of Entry

Whenever mistakes are noticed after submission of documents, amendments to the
bill of entry is carried out with the approval of Deputy / Assistant Commissioner.
8.7.3. Green Channel facility
Some major importers have been given the green channel clearance facility. It
means clearance of goods is done without routine examination of the goods. They
have to make a declaration in the declaration form at the time of filing of bill of
entry. The appraisement is done as per normal procedure except that there would be
no physical examination of the goods.
8.7.4. Payment of Duty
Import duty may be paid in the designated banks or through TR-6 challans. Different
Custom Houses have authorized different banks for payment of duty and it is
necessary to check the name of the bank and the branch before depositing the duty.
Duty payments are normally done online by way of RTGS through ICEGATE
(Customs) site and SBI E-Payment / Online site by IOCL.
8.7.5. Prior entry for Shipping Bill or Bill of Entry
For faster clearance of the goods, provision has been made in section 46 of the Act,
to allow filing of bill of entry prior to arrival of goods. This bill of entry is valid if
vessel / aircraft carrying the goods arrive within 30 days from the date of
presentation of bill of entry.
8.7.6. Specialized Schemes
Import of goods under specialized scheme such as EPCG etc is required to execute
bonds with the Customs authorities. In case failure to fulfill commitments as per the
terms of bond, importer is required to pay the actual duty leviable on those goods
with interest. The amount of bond would be the difference of actual duty being paid
and the actual amount of duty leviable on merit basis.
8.7.7. Bill of Entry for Bond / Warehousing
A separate form of bill of entry is used for clearance of goods for warehousing.
Assessment of this bill of entry is done in the same manner as the normal bill of
entry and then the duty payable is determined at the time of removal of goods from
bonded warehouse.
8.7.8. Procedure for import clearance
Prior to issue of Purchase order by units, they should check the import provision as
to whether import is free or restricted. If restricted, units should obtain specific
License & forward it to Port Office for clearance prior to establishment of LC or arrival
of goods as the case may be. For this, units can request the suppliers to indicate the
HSS classification number in their offer at the time of tendering. This will also ensure

73

proper loading of duties as well at the time of comparative evaluation. Further the
Purchase order item description should also match the item being imported. The
invoice should be as per purchase order only.
Immediately on receipt of dispatch details from overseas supplier, Purchase order
print out is taken by the Liaison offices directly from SAP. Thereafter, Invoice is
checked to be in line with PO for value, type of material, quantity, transport
arrangement required and any special condition of PO. Also copy of LC is obtained.
As soon as these details are checked, X Form is prepared & the cargo is insured &
simultaneously, message is sent to unit for Non Negotiable documents, Originals &
as well as Technical Write up for specialized items / chemicals. It should be ensured
by units that overseas supplier informs dispatch details to Port Office immediately
after dispatch. Immediately on berthing of vessel & discharge of Cargo, insurance
survey is carried out on specific instructions for Break Bulk, ODC.
The shipment is tracked for its arrival including transshipment, if any, by port office
either through website of shipping companies or EXIM News Bulletin or through their
agents at Mumbai. The Prior Entry IGM is filed by shipping agents once the vessel
arrives in Indian Waters & the details of our shipments can be checked. The Vessel
after arrival waits for allotment of berth in stream. After berthing of vessel, date of
berthing is given in the shipping news (EXIM Paper) or can be known from the
steamer agent. When the vessels two thirds of the cargo is discharged, General
Landing Date (GLD) for that vessel is declared. Also the final IGM is filed. Three
working days are allowed free by Port after GLD. Last date of free delivery (LFD) is
called Last Free Date. After discharge of containers from the vessel, the same is
moved by road to the designated container freight station (CFS). All subsequent
clearance activity is to be carried out from the CFS.
Prior to or on arrival of vessel, freight bill is obtained & compared with the contract
prices. In case the same is not under the contract, units are requested to inform the
agreed freight rate to pass the freight bill and thereafter Check list Bill of Entry is
prepared by CHA & forwarded for checking & approval by IOCL. The BE is completely
checked & if found in order for Assessable Value, HS Code, Custom Tariff rate, BL
Number, No of Packages, IGM Number, Container Numbers, License number etc,
CHA is advised to file the BE immediately after final IGM is filed. Once the BE is
passed in the Customs system, the CHA communicates the BE & TR 6 challan
Number to IOCL for making Customs Duty payment. The BE & TR 6 challan numbers
are visible online on ICEGATE (Customs) site for payment purposes online. The BE &
TR 6 challan number and the amount of duty available online is matched with the BE
& TR 6 challan provided by CHA telephonically and the amount of duty as per
approved Check list Bill of Entry. On finding no discrepancies, duty payment through
online/e-payment mode is done through ICEGATE (Customs) and SBI site by RTGS.
The payment details are thereafter provided to CHA by E-Mail.
In the meanwhile Original documents endorsed by bank are received either at port
office for those shipments where LC has been opened by port office or from units. It
must be ensured that all pages of BL & invoice are endorsed by bank with seal.
Further the bank should endorse on the reverse side of page of BL to deliver the
consignment to IOCL with signature & seal where the consignee is to the order of the
bank. These must be checked by units prior to forwarding the originals as well as
road permits to port office. The originals should also consist of Packing List,

74

Certificate of Origin, copy of Inspection Certificate, Phytosanitary certificate in case

of wooden packing.
After receipt of original documents, Delivery order is obtained from the agents of the
shipping company & other payments such as THC, CFS Charges, Wharfage Charges,
Stamp Duty charges etc are made. Further clearance, if required, from Assistant
Drug Controller is also obtained for some listed chemicals only. The transporter is
simultaneously informed to place the truck. During the interim period, examination
of the cargo is carried out & out of charge of Customs is obtained & material
dispatched to units. Thereafter, units are informed of dispatch details. Prior to
dispatch of shipment, survey is conducted by Insurance Surveyor. Once the material
is unloaded at units, the containers are deposited back at the designated yards of
shipping agency as agreed & thereafter the container bond issued by port office is
got cancelled from Customs.
Some chemicals are being imported by Units in Shippers own containers. In such
cases also the containers are to be exported back within six months from the date of
IGM since no duty is being paid on such containers after following all formalities for
export failing which Customs Duty with interest is liable to be paid. Therefore units
must have control over such chemicals for use on FIFO basis to ensure that they are
exported back within the time frame allowed by customs.
After dispatch of materials, the CHA provides all the documents back to Port Office
along with copies of BE. The exchange control copy is sent to Units in case LC has
been established by Units to hand it over to Bankers & in cases where LC has been
opened by Liaison Office, the same is forwarded to Bank directly. The Cenvat copy of
BE is forwarded to Units under intimation for availing Cenvat Credit.
8.7.9. Project Import under 9801 chapter
For Setting up of Grass Root Refinery or for substantial expansion or other projects
(Vide Mini Budget Notification No 7/2004-Custom dated 8/1/2004), imports can be
done under this chapter availing concessional rate of duty as specified from time to
time. In this case the project is to be registered with Customs by providing the
following details:
1. Application for Registration of contract in the prescribed Form A
2. Details of the project with plot plan.
3. Copy of approval of the Board Of Directors
4. Essentiality certificate with list of Goods to be imported for the Project.
5. Continuity Bond in Duplicate.
6. Undertaking Duly Signed & Notarized in Duplicate.
7. Copies of Purchase orders
8. Copy of Industrial License.
9. Brief Technical Write Up.
10. Copy of Environmental Clearance Certificate
11. Agreement copy, Boards approval copies of the project.
Further every Purchase Order has to be registered with the Contract Cell of Customs.
Once these documents are received, application is made with the Contracts Cell of
Customs for registration of the Project. At the time of registration of the Project, an
Indemnity Bond is submitted (for Govt. Undertakings only) for the differential value
considering the normal rate of duty & Project Rate of Duty. This is required since all

75

BEs are provisionally assessed at the time of import under this chapter. The
procedure for Customs clearance is the same as already explained above.
After completion of all imports, Installation Certificate is obtained from the unit Head
& final documentation covering all imports made against the project with each BE
with supporting invoice, payment certificate & other related import documents are
submitted to Customs for Final assessment of all Bills of Entry & closure of Project.
After Final assessment of all imports & closure of the project by Customs, the
Indemnity Bond is cancelled & redeemed from Customs.
The Installation Certificate is to be provided within six months from the date of last
import against the project failing which Customs can deny the benefit of concessional
rate of duty & raise demand for payment of differential duty considering Merit Rate
of Duty with interest.
8.7.10. Export Promotion Capital Goods (EPCG) License clearance Procedure
On receipt of EPCG License issued by DGFT, Port Office forwards the same for
registration supported by following documents:
1.
2.
3.
4.
5.
6.
7.

EPCG License in original (Customs Copy)

EPCG Bond duly endorsed & notarized.
Affidavit.
Copy of Power of Attorney for signing EPCG Bond.
Copy of Central Excise registration Certificate.
Copy of IEC (Importer Exporter Code).
Copy of Status Holder- Trading House Certificate.
At the time of registration of EPCG License, Indemnity Bond is issued to Customs
towards fulfilling the export obligations within the time frame mentioned & furnishing
of installation certificate within six months from the date of last import against the
subject License. The value of Indemnity Bond to be submitted (for Govt.
Undertakings only) is for the differential value considering the normal rate of duty &
Project Rate of Duty. The Installation Certificate is to be provided within six months
from the date of last import against the license & export obligation is to be
completed as per time frame provided, failing which Customs can deny the benefit of
concessional rate of duty & raise demand for payment of differential duty considering
Merit Rate of Duty with interest.
After registration of License, Customs clearance procedure against imports is the
same. However it is to be ensured that item description with Tag Numbers as
provided in the EPCG License are appearing in all import documents, especially the
invoice. The Bill of entry is passed with duty saved amount i.e. Merit rate of duty
EPCG duty = Duty saved. Further the entry of duty saved amount of the particular
shipment & cumulative duty saved is also endorsed in the license. This is to ensure
that the total duty saved amount does not exceed the actual duty saved amount as
per the License. There is a provision for auto enhancement up to 10 % beyond which
DGFT has to be again approached for value enhancement.
On completion of import against EPCG License following actions are taken:
a) Original EPCG license sent to Project- Finance at RHQ.
b) An Import data sheet is prepared by port office indicating complete import details
such as Name of Exporter, Invoice Value in Foreign Currency, Description of Item, BE

76

No., BE Date, BE Cash No., CIF Value in Indian Rupees, Assessable Value in Indian
Rupees, Merit Duty Payable, CTH NO for Merit Duty, EPCG License Serial No., EPCG
Duty Paid, EPCG Debit No., Benefit accrued to Company, Cumulative CIF Value &
remarks if any. The same is sent to respective unit with copy to Project-Finance at
RHQ for obtaining Plant Site Verification Certificate (PSVC) duly signed & certified
having installed the same from Local Excise Authorities. It is mandatory to submit
PSVC to Customs within six months from the date of last import against license.
There after the PSVC is submitted to customs within stipulated period.

1.
2.
3.
4.
5.
6.
7.

On completion of Export obligation, Export Obligation Discharge Certificate (EODC)

issued by DGFT is received by Port Office from RHQ, New Delhi. The same, along
with forwarding letter, is then sent to Customs for cancellation of EPCG Bond
supported by following documents.
Copy of EODC
Copy of EPCG Bond.
Copy of EPCG License with debit sheet.
Copy of Installation Certificate.
Copy of C.A. Certificate
Copy of Bank Certificate of Export & Realization along with shipping bill.
Copy of statement of Export Registration of EPCG in ANF -5B Form.

8.7.11. Customs Clearance against Duty Entitlement Pass Book (DEPB) / Focus
Marketing (FM) Scrips
We are receiving DEPB Scrips of two types from BD group in CO for taking exemption
of duty as under:
1. DEPB Scrips of EDI Port.
2. DEPB Scrips of Non-EDI Port
On receipt of the DEPB / FM Scrips, Port Office sends the same for registration to
Customs for availing the benefit of duty exemption to the extent of value indicated.
In case of DEPB / FM Scrips of EDI Port, the same can be registered with Customs
directly and no confirmation is required from issuing port. Thereafter the duty benefit
is availed once registration formalities are completed by Customs. The duty benefit
availed against each import is recorded in the DEPB scrips against each BE and its
cumulative value to ensure utilization of full credit. Thereafter the original scrip with
detailed statement of duty benefit availed is sent back to BD group at CO.
In case of non-EDI scrips the following steps are required to be taken by the
importer to avail the duty benefit. On receipt of non-EDI scrips with Release Advise
(Importers Copy) from the originating customs house, the same is forwarded to
Customs authorities for registration at the port where this script is to be utilized for
availing the duty benefit. The Customs will not register the RA unless they receive
their Custom copy of Release Advise which is forwarded directly to them through
Speed Post by the original DEPB / FM scrip issuing Port directly. Even after receipt of
the same, the Customs authorities port of registration where the script is to be
utilized prepares a Release Advise confirmation letter and faxes the same to R.A.
issuing Port for verification/confirmation of having issued such Release Advise. It is
only after receipt of confirmation either by fax or speed post, the Customs
authorities register the Non-EDI Script and allow the importer the duty benefit to the
extent of R.A. Value. The duty benefit availed against each import is recorded in the
DEPB/FM scrips against each BE and its cumulative value to ensure utilization of full

77

credit. Thereafter the original script with detailed statement of duty benefit availed is
sent back to BD group at CO.
8.7.12. Re-Export Procedure

1.
2.
3.
4.
5.

Re-export may be required to be done under the following conditions:

Rectification of defective supplies
Rectification of damaged imported consignment
Re-export of spent catalyst for recovery of Noble Metal
Re export of SOC (Shippers Own Containers)
Re export of tools and tackles
The Documents required for Re Export are as under:

1. Original PO Copy & import documents including BE at the time of first import.
2. Reasons for export enclosing the correspondence exchanged by unit with the
supplier.
3. If the item being re-exported is shippers own containers, then original import details
to be stated & it should be declared that it is return of shippers own containers in
Export Invoice & Packing list.
4. If the item is being sent for repairs & to be reimported back, Identification mark
which is distinct should be there at the time of Export & Reimport. The identification
marks must be mentioned in the invoice at the time of reimport by supplier. Further
the same identification marks must be clearly visible on the item & the same should
be visible immediately on opening of the box at the time of Re-Import after repairs
during Custom Examination.
5. Item description, approximate value, dimensions of the package, net & gross weight,
and complete address of the supplier with contact person. This should be there on
the invoice & packing box as well.
6. The Re-export documents viz Export invoice, packing list (to be prepared by the
Unit) along with copy of original import documents are to be sent to the Port Office
duly signed & stamped on all pages for obtaining waiver from the bank in case LC or
payment for original import has been released from the Refinery Liaison Office at
Mumbai/Kolkata. In other cases the Guaranteed Remittance (GR) waiver should be
obtained by Unit concerned from the bank through which original import payments
were released & forwarded to Refinery Liaison Office at Mumbai/Kolkata.
7. The invoice should indicate the repair charges to pay Customs Duty on the same.
8. Mode (By Air or Sea), Port of Dispatch, Port to which it is to be dispatched is to be
clearly indicated. Further it should be made clear that the vendor will collect the
materials from Port & follow all customs procedures of that country or the same is to
be cleared in all respects & delivered at their works. It is in the interest of the
Corporation to make the supplier agree to take delivery from Sea/Airport to the
extent possible.
9. Freight to be paid by IOCL or supplier. This should be clearly indicated for export as
well as import after repair.
10. Transit insurance to be arranged by IOCL or supplier.
11. Clearance from Unit for payment of Octroi at Mumbai. In case the material is to be
cleared under n-form facility (viz. waiver from Octroi payment), than the material is
to be dispatched to the supplier within seven days after entry into Mumbai
jurisdiction. In order to ensure this, the transporter being lined up by Unit for
dispatch of the consignment from unit to Mumbai has to get in touch with Refinery
Liaison Office at Mumbai / Kolkata. The transporter representative in Mumbai /

78

Kolkata should collect the N-form from the office and submit the same to the octroi
authorities for clearance from Octroi post while entering Mumbai / Kolkata. This will
be the responsibility of the transporter & units must ensure strict adherence of the
same.
12. Units to ensure that the material is not dispatched till clearance is given by Refinery
Liaison Office at Mumbai/Kolkata after completing all export formalities as well as
lining up of vessel/flight for export.

79

CHAPTER IX
MATERIAL CODIFICATION & CODIFICATION CELL, RHQ
9.1. For implementation of SAP- MM Module, Common Materials Master is being created
and uploaded in the system, which is available to all the users across the corporation.
Post SAP Implementation, Indian Oil is having a single catalogue, with a common
codification scheme for the entire organization and unified description of items.
9.2. Purpose

Materials management include materials planning, purchasing, receiving, storing,

issues, control and surplus disposal.
Materials Catalog provides a logical identification of materials for all these functions.
Hence the backbone of an effective materials management system is a state of the
art materials catalog.

9.3. Codification Methodology

Creation of Common Material Master in SAP is achieved through a specially Designed Kit
Called CDK which serves as the Master data entry hub where all the Logics of codification
are inbuilt and codification takes place before porting the same into SAP thru an interface
program YM84.
CDK Catalog Development Kit is a materials cataloging Software, specifically developed
to suit the current global scenario with Standardized codifying methodology. The CDK
nomenclature is used in classifying a material with a set of Main Group, Sub Group & Sub
Sub Group along with a group of characteristics.

CDK helps to generate a complete and comprehensive catalog of materials in a very

user-friendly environment
CDK is a software tool for materials catalog development and its maintenance. CDK
can be used while cataloguing items for a new facility or an existing facility
Serving as a catalog for effective buying description
Providing a very flexible approach in classifying materials
Facilitating an intuitive search
Providing a flexible and expandable database

Material codification in SAP is at the client level with a view to have common codification of
material across Indian Oil. Material can be extended to desired company code, Plant as per
the requirement of the Plants.
Non Hydrocarbon material is a 10 digit intelligent coding. First 6 digit is called coding
schedule followed by 3 digit which is running numbers and followed by another digit which is
a identifier / indicator.
The codification hierarchy is as under:
The 10-digit code comprises of:

80

Main group
AA

Sub Group

Sub-sub Group

Serial no.

Identifier

BB
CC

DDD
Z

Identifier / indicator

1-Imported proprietary, 2-Imported common spare,3-Indigenous proprietary,4-Indigenous

common
5-Non valuated / Insurance spare
CDK (Catalogue Development Kit) is available for viewing as Web Base CDK viewer in
Server at COIS, Gurgaon with IP address http://10.51.25.23/
Users across IOCL can click on the desired main group for which they want the material
code. This will take them to the first screen and again click on icon to get sub group of main
group. Continue above to get sub-sub group. Finally they get desired material code as given
below.
Whenever Users do not find a material in CDK, Material codification request on the
prescribed format be sent to Codification Cell of Central Procurement Cell at
st

Refineries Head Quarter duly suggesting codification schedule i.e. 1

checking in the system that it is not already codified.

6 digits after

In case Material is already codified and existing in some other Plant, a request may be
made, online (t-code YMC) for extending the material to requisite Plant.
Request for extension of Material master can be done online thru t-code YMC.
9.4. Material Master Fields
Material master information is to be provided in following fields:
Field Name
Material number
Material short text
(short description)
Base
unit
of
measure
PO
text
for
material
description

Field
Type
Char

Field
length
10

Char

40

Char

3-4

Char

70 each
field

Description of field
Key that uniquely defines a material.
10digit logic already defined.
Text, consisting of up to 40 characters,
concisely describing the material.
Unit of measure in which stock of the
material are managed.
Text, any length, with a limit of 70
characters in each field, that describes the
material in detail

9.5. Codification Cell

Codification Cell at RHQ is taking care of the codification requirements of all the
refineries. Standardization of Technical Specification in Material Master shall be
undertaken wherever necessary on the recommendations of M&I.

81

CHAPTER - X
INVENTORY CONTROL
10.

Introduction
In financial parlance Inventory is defined as the sum of the value of raw materials,
work-in-process and finished goods at any given point of time. For our purpose the
operational definition of Inventory would be: "The amount of materials, fuels,
lubricants, spares, consumables etc. held for smooth running of the plant. Inventory
will also include materials held by vendor / contractors such as CR Coil issued to
drum manufacturer, spent catalyst (in stock as well as issued for recovery of noble
metal), noble metal recovered from spent catalyst and noble metal issued to catalyst
manufacturers."

10.1. Reasons for holding inventory

The main reasons for holding inventory are:
i.
ii.
iii.

Protection against uncertainties of demand and supply that cannot be predicted with
sufficient accuracy
To avoid stock out
Long delivery period
In a nut shell, Inventory Control, therefore, deals with determination of optimal
procedure for maintaining stocks to ensure continued availability of required material
while at the same time avoiding storage of excessive and obsolete stocks.

10.2. Selective Inventory Control techniques

10.2.1. ABC Analysis is a basic analytical management tool which enables the
management to exercise selective control and place the efforts where the results
would be greatest. ABC analysis is based on the concept of "Vital Few" "Trivial
Many". ABC classification is based on annual consumption of materials.
10.2.2. Facility to take out reports on the basis of consumption is available in SAP from
where the limits can be set for A, B and C class items
10.2.3. The purpose of carrying out ABC analysis could be for selective control w.r.t.
material planning, safety stock determination, MRP level review etc.
10.2.4. The degree of control should be rigorous for "A" items, moderate for B items and
minimum for "C" items.
10.3. Guidelines for inclusion as Inventory Control items
10.3.1. Items specifications should be firm.
10.3.2. Request for inclusion in IC list of Stores & Chemicals category items should be given
by the User Department. However, such items should have consumption of regular
nature (at least 3 regular issues in the preceding year special issues like
turnaround job and Engineering Services requirement shall not be considered).

82

10.3.3. In view of the regularly changing market demands of Petrochemical products,

additives required for petrochemicals shall not be made IC items.
10.3.4. Equipment Spares should be made IC items. Request for inclusion in IC should be
given by the User Department.
10.3.5. User will indicate annual consumption along with consumption pattern for deciding
inventory levels. The inclusion of IC items will be approved by GM of the respective
User Department.
10.3.6. The first procurement action at the time of request for inclusion in IC list will be
initiated by the concerned User / Technical department of the Unit before putting
the same into IC list. The quantity of first PR shall be at least upto the Annual
Consumption (considering available stock, if any).
10.3.7. Substantial changes in consumption pattern shall be informed to the Materials
Department by the User Department with the approval of HOD of User Department
for necessary changes in levels.
10.3.8. In case material is required to be procured from specific source(s), such source(s)
of supply shall be mentioned in the note leading to the approval for inclusion of
items into Inventory Control. The same shall be used by Purchase group for future
procurement till any new vendor is added by the User Department.
10.3.9. Non Inventory Control (NIC) items showing regular consumption pattern (as defined
above) may be proposed by Materials Department (IC Section) to the User
Department for inclusion in IC list.
10.3.10. Insurance Items are not to be included in IC List.
10.4.

Guidelines for removal of items from Inventory Control list:

10.4.1. If the Stores category IC items have no issue transaction at least once in two years,
the same shall be removed from IC list and intimation to this effect shall be given to
the User Department by the Inventory Control Section. IC Section shall take
approval from HOD of Materials Department for removal from IC list.
10.4.2. In case of Spares category IC items, even if there is no issue transaction in three
years, the item shall continue to remain in IC list. However, in case no consumption
is observed for any IC spare for more than three years, then such list shall be sent
to User to confirm whether the main equipment is in operation or not. In case it is
not in operation, all the spares under that header / group shall be removed from IC.
The Codification Team at RHQ shall also be apprised of any such changes by the
Unit Inventory Control Section. If the main equipment is in operation, user will
review the levels and confirm revised levels (if required) to be maintained.
10.4.3. Chemicals shall be removed from IC only with the consent of User Department /
Technical Services. However, IC Chemicals showing no issue movement at least
once in two years shall be brought to the notice of the User Department / Technical
Services. Review of IC Chemicals shall also be done in Chemical review meeting
with User Department / Technical Services at least once in a month.

83

10.4.4. The User Department shall give regular report to Materials regarding obsolescence
and non operation. In case no such obsolescence / non operation is observed in a
Calendar Year, a NIL report shall be furnished by the User Department to IC
Section every December.
10.5.

Inventory Control section shall raise PRs based on the inventory levels. Inventory
levels shall be periodically updated by the IC section in accordance with the last 3
years consumption pattern and lead time. Assistance from User may be taken, if
required. Level fixation and subsequent changes in inventory level shall be done
with the approval of HOD Materials.

84

CHAPTER - XI
TRANSPORT, RECEIPT AND INSPECTION
11.

Introduction
Materials required for operation and maintenance of Refineries are received from the
following sources:

i.
ii.

Indigenous and foreign suppliers on whom Purchase Orders have been placed
Loan or transfer from other Units or other Organizations

11.1. Responsibilities of the Receipt Section

11.1.1. On receipt of dispatch documents or intimation, Receipt Section should follow up
with the transporter for delivery of materials.
11.1.2. To check if the documents received through bank or through Purchase Section or
along with door delivery consignments are in accordance with the PO terms. In case
of non receipt of any document, the same shall be taken up with the Supplier.
11.1.3. Taking over consignments from Transport Section and receiving door delivery
consignments.
11.1.4. All materials received against Purchase Orders / FOA should generally be routed
through the Receipt Section. However, exceptions can be made with regard to
project part supplies, bulk materials (like pipes, plates, cables, structurals, heavy
equipments, chemicals etc.) directly unloaded at designated place of storage in
Warehouse. Such materials will be unloaded by Receipt Section in consultation with
Custody Section to minimize the requirement of repeated material handling and
proper storage of materials.
11.1.5. Direct receipt of materials by User Department as exceptional case shall be done
with the approval of HOD of User Department or HOD of Materials Department. On
direct receipt of materials by User Department, the delivery challan shall be certified
by the user with signature and Received & Accepted indicated on the same. In
case of rejection or partial acceptance of materials, the same shall be noted in the
delivery challan and the rejected materials shall be returned to the vendor directly.
The certified challan along with Invoice and Material Issue Reservation shall be sent
to the Receipt Section for creation of GRN and posting the Reservation.
11.1.6. Receipt Control number (RC no.) in SAP should be generated immediately on receipt
of materials at Stores. RC number, date and location of materials shall be recorded
on the Delivery Challan / Invoice. All the materials received in the Receipt Section
should be properly stored and marked or tagged for easy identification and
reference.
11.1.7. Before actually taking delivery of materials, the materials will be visually checked
for any apparent damage or discrepancy. Appropriate remarks / endorsements will,
accordingly, be made on the consignment notes / challans in case of discrepancies
or deviations being found in the received supplies and signature of the transporter
representative taken. In such cases a Damage Certificate shall be obtained from the
transporter.

85

11.1.8. In case material is not delivered within 30 days of the date of consignment note
(CN), Receipt Section shall write to the Transporter with a copy to Supplier to
deliver the material. In case where the dispatch documents / intimation is received
at Receipt Section after 30 days of the date of CN, such letter shall be issued to
Transporter with copy to Supplier immediately on receipt of such intimation /
dispatch documents. Even after two such communications (separated by 15 days)
the material is not received a communication regarding issuance of Non Delivery
Certificate shall be sent to the Transporter with copy to Supplier.
11.1.9. In case, no discrepancy / damage is outwardly or immediately visible, the challan
may be cleared with the remark "received subject to check / inspection". Persons
other than those specifically authorized for the purpose will not take delivery or
clear consignment notes / challans.
11.1.10. Receipt and handing over of CENVAT papers and counterfoils of Road Permit (Way
Bill), wherever applicable, to Finance Department. Proper endorsement at the back
of consignment note / challan should be made if CENVAT papers are not received
along with the consignment and get the signature of the transporters
representatives for future correspondence.
11.1.11. Incoming consignments should be opened and checked.
11.1.12. Materials received will be checked with the relevant Purchase Orders and details
received with the consignments. Any discrepancy in quantity / quality or breakage
/ damage noticed at the time of checking after opening will be communicated to
the Supplier with copies to transporter and underwriters. Copies of such advice will
be forwarded to Purchase Section, Finance Department and also the User
Department, for follow up action regarding claim / replacement and / or
rectification or such other action as warranted. In case of any discrepancy
observed in the supplies the same shall first be entered in a discrepancy register
and intimated to the supplier with copy to transporter and Purchase Section.
11.1.13. Wherever any discrepancy cannot be resolved or in case of non delivery of part or
full consignment against dispatch documents, a claim will be lodged with
transporter & supplier with copies to Underwriters, Finance Department and
Purchase Section. Raising of discrepancy reports and preparation and lodgment of
claims with the carriers / suppliers / underwriters shall be done within the specified
time limit as defined in the insurance policy. These claims will cover damages and
loss in transit. All claims lodged by Receipt Section to be followed up and settled by
Receipt Section.
11.1.14. Coordination for getting incoming materials inspected. Offering consignments for
inspection to the Indentor / User Department by intimating them on regular basis
(or uploading on local Intranet) after unpacking. Inspection of the incoming
materials shall be completed within 7 working days of receipt of material. Materials
to be tallied with suppliers delivery notes / challans along with relevant papers i.e.
documents copies of Purchase Orders specifications, drawing or sample, relevant
test certificates etc. by the inspecting authority
Inspection of incoming materials should be carried out in accordance with the PO
specifications, prescribed tests, drawings, approved samples, relevant test
certificates etc. mentioned in the PO. This would be in addition to the inspection of

86

materials that may have been carried out at the manufacturers works in
accordance with the PO terms and conditions. All correspondence relating to
disputes related to inspection of materials, their acceptance or rejection should be
conducted by the Receipt Section in coordination with Purchase (wherever
required) until final acceptance or rejection.
Inspection of standard incoming IC items shall be done by IC Section. However,
User / Technical Department may be asked to inspect incoming IC items if so
requested by IC Section for any specific reason.
11.1.15. Handing over of accepted materials to the respective Custody Section. In case
where direct issue from Receipt Section has to be made to User Department,
reservation voucher posting shall be done by the Receipt Section.
11.1.16. Goods Receipt Notes (GRN) will be prepared for the accepted items. There is no
need for signed copy of Purchase Order for GR process. When the consignment is
not linked to an SAP PO it should be linked to the Letter of Acceptance / Fax of
Acceptance (LOA / FOA) for temporary record keeping of the receipt and issue till a
Purchase Order in SAP is available for GR processing. Items finally accepted will be
physically handed over to the Custody Section and their acknowledgement
obtained in the appropriate column of the GRN. Copies of GRN will then be sent, as
under:
i.
ii.

Original to Accounts along with Cenvat documents

One copy in the Receipt File
GRNs shall be reconciled on a monthly basis with Finance Department.

11.1.17. Accounting and facilitating disposal (including return to supplier whenever

required) of rejected stores. Rejected materials shall be segregated in the
demarcated area with proper tagging.
11.1.18. Consignments should not be allowed to be mixed up or lie unaccounted for a long
time.
11.1.19. Clearance of empty packages and packing materials released and depositing them
to the designated area or Scrap Yard on regular basis.
11.1.20. Up-keep of receipt files in an orderly fashion.
11.2. General points related to Receipt
11.2.1.

Procedure for Chemicals testing and sampling

Procedure for chemicals testing and sampling shall be as given in Annexure 11.
Deviations, if any, w.r.t. above guidelines, will be taken by Technical Services
Department of respective Units with due justification and approval of GM of
Technical Services.

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11.2.2.

Accounting of Samples
Trade samples received along with the offer by Purchase Section will be sent to
the concerned User / Indenting Department at the time of technical evaluation.
The accepted sample of the successful bidder will be retained by Purchase Section.
To this effect a clause shall be included in the PO so that the incoming materials
can be inspected comparing with the approved sample.
After inspection of each lot of supplies, the sample shall be returned to Purchase
Section. All such samples shall be retained in Purchase Section and will be
destroyed at the time of weeding out the Purchase File.
The samples of unsuccessful bidder(s) shall be retained by Purchase Section for a
period of 1 year from the date of finalization of tender.

11.2.3.

Rejection of Materials

11.2.3.1. Items rejected during inspection will be kept separately in the Receipt Section in a
separate area identified as Rejected Store so that there is no possibility of
mixing with the accepted consignments. Each rejected item will be labeled
properly, indicating thereon the name of the Supplier, PO number with (reversed)
RC number and date, Invoice Number, Challan etc. The Receipt Section shall
immediately inform the Suppliers in case the materials are rejected. A copy of the
intimation shall be sent to the Purchase Section.
Receipt Section, in coordination with Purchase Section, shall take up the matter
with the Suppliers to sort out, repair or replace the defective goods expeditiously.
11.2.3.2. In case the vendor fails to replace / rectify the rejected materials within a
reasonable time frame, action to be taken for recovery of sums due.
11.2.3.3. If the materials are not acceptable, the Supplier shall be asked to make
replacement supply and remove the rejected goods within a specified period. On
specific advice of the Supplier the goods can be returned as per the mode of
despatch indicated by the Supplier at his risk and cost.
11.2.3.4. In case payment has been made to the Supplier for the material rejected, the
rejected material shall be returned to Supplier only after receipt of replacement.
11.2.3.5. In case of rectification and where advance payment has been made earlier for
material rejected, care shall be taken to secure refund of advance before returning
the rejected material to the supplier.
11.2.3.6. Rejected items may normally fall under any of the following three categories:
i.
ii.

Items to be returned to Supplier for replacement / rectification keeping in view the

financial safeguards
In case the vendor fails to remove the rejected goods within a specified time
period and no payment has been made against such material, the rejected
material can be shifted to scrap yard after giving a final notice to the vendor to
this effect. The concerned supplies will ultimately be treated as unserviceable
stores / scrap and disposed off accordingly.

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iii.

11.2.4.

In case inspite of having carried out repair / rectification / replacement and

payment having been released for the finally accepted material, if the original
rejected material is not lifted by the vendor, the same treatment as indicated in
(iii) above shall apply.
Claims for Loss or Damage to Cargo in Transit

11.2.4.1. When loss or damage to the goods which are covered by transit insurance comes
to the knowledge of the Receipt Section, the Underwriters and the Carriers must
be advised simultaneously to hold surveys and copies of all correspondence with
carries / suppliers must be endorsed to the Underwriters for their information and
further action.
11.2.4.2. Claims may have to be lodged on carriers for partial or total damage / loss of
materials during transit and on suppliers for shortages.
11.2.4.3. It is the duty of the insured to intimate a claim first against the carriers, after
taking all requisite steps like arranging for survey, open delivery etc., and then
forward all the documents along with a Letter of Subrogation / Power of Attorney
to the Insurers. Prescribed forms of a Letter of Subrogation and for Power of
Attorney available with the Insurance Company will be obtained from them and
submitted duly filled in and signed by the Receipt Officer. These will entitle the
Insurance Company to institute legal suits for recovery of claims from the carriers
or others upto the amount paid by them in respect of the loss.
11.2.4.4. Copies of claims should also be sent to Finance Department and Purchase Section.
11.2.4.5. All claim notices will be entered serially in a Claim Register to be maintained by
the Receipt Section. Separate files will be opened for each claim containing all
connected correspondence relating to that claim. The Receipt Officer will carry out
monthly inspection of the above register as to ensure that the claims are regularly
pursued and that they get settled in time.
11.2.4.6. The responsibility for taking steps for lodging and pursuing claims till it is settled,
in consultation with Finance, will be that of the Receipt & Transport Section.
11.2.4.7. In the case of transit loss pertaining to the imported consignments cleared
through Port Offices, concerned Receipt Officer shall intimate to the Port Office
regarding the loss immediately. The Port Office will lodge the claim on Insurance
Company. The Receipt Officer shall get the consignment surveyed with the help of
local office of the Insurance Company and send survey report to the Port Office for
further pursuance of the settlement. Claim will be settled by respective Port Office
11.2.4.8. Realization of Claim
On settlement of a claim by the carrier, the Insurers will be intimated accordingly.
If any amount is paid by Insurers against the Letter of Subrogation, it is only an
advance without interest subject to adjustment after the claim is finalized with the
carriers.
It is the responsibility of the Receipt & Transport Section to pursue all claims till
finalization. If claims are paid short or repudiated, the Receipt Officer should
obtain specific order from Stores in charge before accepting the repudiation.
In case, it is finally decided to close the case, the Receipt Officer will inform all
concerned and initiate write-off proposal for any loss that may be involved.

89

11.3. General points related to consignments received through Railways

11.3.1.

Supporting Documents for Valid Claim

Claim notices served on the Railway Administration will always be supported by the
following documents:
11.3.1.1.

For non-delivery claim for piece consignments

i. Non-delivery certificate obtained from the Railway Station Master as separate
memos, or endorsements on the back of Railway Receipts (R/R) under the
station stamp
ii. Original R/Rs wherever necessary
iii. Copies of Supplier's delivery invoices

11.3.1.2.

For non-delivery of full wagons

i.

Original R/Rs if all wagons booked under particular R/Rs have not been
received

ii.

If the wagons have been received partially, a true copy of the R/Rs along
with a non-delivery certificate or a certified copy of the remarks passed in
the Railway Delivery

iii.

Copies of Supplier's Sale Invoice

11.3.1.3.

For claims for

consignments

shortage/damages

or

short

delivery

in

piece

i.

True copies of the Railway Receipt

ii.

Railway certificates supporting the shortages / damages

iii.

Extracts from the challans or supplier's delivery notes in respect of items

involved in the claim

iv.

Full particulars of the materials that are damaged or not received, together
with their value

v.

Where some of the parts of equipment are damaged, the cost of repair or
replacement of the parts supported by Performa invoices or bills of the
suppliers

11.3.1.4.

Shortages / damages in full Wagons

i.

Copies of the R/Rs

ii.

Railway shortages / damage certificate

iii.

In addition to the above documents, the claims on the railways will be

accompanied by claim bills which will be prepared by the accounts officer
concerned and sent to the railway administration in continuation of the
claim notice given by the receipt section

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11.3.2.

Preferring Claims on Railways

It may be noted that the Railways will not accept liability, if notification in writing of
claim for compensation is not preferred against them within 6 months from the date
of booking. All letters / notices to the Railways Administration will be addressed by
the Receipt Section per "Registered Post / Acknowledgement Due" and the postal
and / or other acknowledgement will be preserved.
In respect of the original claims for non-delivery of full consignments of wagons,
shortages / damages may be noticed when the consignments / wagons are delivered
later by the Railways as sometimes happens. In such cases also "Open Delivery" will
be insisted upon and the original claims will be modified instead of raising fresh
claims.
11.3.3.

Claim Bill

A monetary claim bill, showing the amount claimed and how it is arrived at, will be
forwarded by the Receipts Officer to the Railways authorities and the underwriters
with a copy of the claim to Finance Department.
11.3.4.

Payment of freight to Railways

As far as possible, all payments to Railways shall be made by Railway Credit Notes
that may be issued by the Stores / Accounts Officer who are authorized to do so.
11.4. Responsibilities of the Transport Section
This section will be responsible for the following activities:
11.4.1. Receipt and registration of incoming railway receipts, air / road / river transport
consignment notes and other accompanying vouchers and handing over the
consignment to Receipt Section / Custody Section or directly to the site.
11.4.2. Collection of stores from Railway station or siding / Transporters godown / Courier
office / Post office / Bank
11.4.3. Off loading of wagons from Railways / Stores sidings
11.4.4. Wherever materials are received at the Refinery railway siding, sending off-loading
messages to the OM&S Department with regard to the off-loading of wagons to
admit removal of empties by the OM&S Department
11.4.5. Collection of stores from the godowns of different suppliers if so stipulated in the
purchase order
11.4.6. Preparation of monthly statement of outstanding consignment notes
11.4.7. Obtaining shortage / assessment certificate from Railway authorities or other
transport agencies or postal / courier / authorities as the case may be
11.4.8. Transport Section will process the freight bill as per provision of the Purchase
Order.

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11.4.9.

Keeping running records of consignments in which containers / ISO tanks / EuroTainers have to be returned and of those for which containers belong to
Corporation

11.4.10. Expediting consignments with carriers, wherever required

11.4.11. Maintaining close contact with unloading and transport contractors and processing
bills of the contractors for verification etc. and submission to the concerned
Receipt Officer and Finance.
11.4.12. Non receipt of CenVAT documents should be clearly indicated and signed by
transporter & representative of Receipt Section or Transport Section on the back
of the Challan or Consignment note. Such non receipt should also be clearly
indicated in GRN.
11.4.13. Receipt of LSC document from Finance.
11.4.14. Reconciliation of collection on weekly basis for clearing the backlog.
11.4.15. Ensure timely payment to the transporters.
Responsibilities of the Transport Section shall be taken care of by the Receipt Section where
a separate Transport Section does not exist.

92

CHAPTER-XII
CUSTODY AND ISSUE
12.1. Responsibility of the Custody & Issue Section (hereinafter referred to as
Custody Section for the sake of brevity)
The principal functions of the Custody Section of Stores are summarized below:
12.1.1. Timely taking over of materials against GRNs.
12.1.2. Proper storage in appropriate bin and bin location entry in SAP. Endeavour to
ensure that multiple bin locations for the same material are reduced as far as
possible. Also efforts to be made that similar type of materials are stored in the
same vicinity.
12.1.3. Preservation of materials and good house-keeping.
12.1.4. Issue of material including checking of relevant vouchers and the consequent
arrangement and on-line posting of issue notes in SAP.
12.1.5. Reconciliation of stocks as per:
i.
Discrepancies in stock verification reports of Finance.
ii.
Any quantity related discrepancy observed at any other time.
12.1.6. Maintaining records of returnable cylinders / toners and verifying rental bills for
such returnable cylinders / toners. Accounting of empty cylinders as per PO, return
details, rental bill payment and advising Purchase & Finance for release of security.
12.1.7. Assisting in stock verification jointly with Stock Verifiers and certifying the
correctness of verification and making stock adjustment notes for correction of
stock figures.
12.1.8. Taking return from various Departments.
12.1.9. Taking over of Project leftovers.
12.1.10. Proper labeling of materials.
12.2. Responsibilities of Custody Section in detail
12.2.1. GRN verification
i.
ii.

Following should be checked by the Custodian:

That the received material is matching with the description and part number,
quantity and item codes entered in the GRN.
That the received material is checked by visual inspection for physical damage. The
Custodian should then place the material in the proper bin location and note the bin
location in the GRN, wherever new locations are assigned and post the correct bin
location in SAP immediately.

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12.2.2. Returned Stores

12.2.2.1. All materials, which have been previously issued for works or other jobs and are
no longer required, should, in the absence of special instructions to the contrary,
be returned to Stores with proper identification and accompanied by SAP
Materials Return Voucher. The vouchers should show all details i.e. the SAP Code
Number, quantity and reference of the issue requisition under which the material
was originally drawn.
12.2.2.2. In case of unused materials drawn against a package order, materials shall be
returned after appropriate codification, pricing and tagging by the User
Department. This will be treated in line with Project Leftover stores described
elsewhere in this manual.
12.2.2.3. The technical acceptance of these new and unused returned materials shall be
certified by the User Department before accounting of materials in SAP by Stores.
The same shall also be linked to proper Test Certificates / Inspection Release
Note. The returned materials should be received in the appropriate Custody
Section.
12.2.2.4. Used but repaired equipment shall not be taken as Returned Stores. Repaired
equipments shall be retained by respective User Department for optimum use.
12.2.3. Issue of materials by the Custodian
Reservation Vouchers are presented to Custody Section for issuing materials. It
shall be the responsibility of the Custodian to verify:

i.
ii.
iii.

That the Reservation Voucher is signed by the authorized personnel of the User
Department.
In case of issue of FIM, the Work Order / PO number shall also be indicated in the
Reservation Voucher.
That the correct date and time of presentation of the Reservation to Stores is noted.
After the above mentioned verification, the material shall be issued and voucher
posted in SAP.

12.2.4. Material Transfer Posting in SAP

Material Transfer notes are raised in case of code to code (to reduce duplicate codes
in use) or storage location transfer of materials and it shall be the responsibility of
the Issuing and Receiving Custodian that necessary entries are made in SAP. Code
to code transfer shall require approval of HOD of Materials Department.
12.2.5. Transfer of goods to other IOCL Units / outside Organizations
Authorization and modality for issue of materials to other IOCL Units / outside
Organizations shall be as under:
i.

Transfer to other IOCL Units: Authorization by Stores in charge against SAP

Stock Transfer Order (STO) created by the IOCL Unit that requires the
material. STO is posted in SAP by the Issuing Custodian and corresponding
Despatch Challan printed from SAP.

94

ii.
a)
b)

Transfer to other Organizations:

On Loan - Authorization by GM.
As Free Issue Materials (FIM) for fabrication against approved orders /
contracts this shall be done on receipt of request letter and Reservation
Voucher from User Department.

Before any item is sent outside the Refinery, intimation to be given to Finance
Department by Materials Department for reversal of CenVAT.
12.2.6. Cylinder on rental basis
Cylinder on rental basis are required for consumable gases like Oxygen, Acetylene,
Hydrogen, Nitrogen, Carbon Dioxide, Ammonia, Chlorine, Sulphur Dioxide, Carbon
Monoxide, Calibration Gas Cylinders, Cab, Cab-2, Cd, Cj, Teal, Ipra, Ticl4 Cylinders /
Toners etc.
Cylinder accounting shall be done considering the following:
i.
ii.

The rent free period and

The need for a faster turnaround of cylinders.

Dates of return should be determined and prominently marked on the challans

(extra copies to be insisted upon or prepared if necessary) at the time the cylinders
are received. Lot-wise records of these cylinders should be maintained. Periodic
reviews should be carried out to ensure timely return of cylinders.
12.2.7. Gate pass
12.2.7.1.

No material should be allowed to go outside the Refinery gates without a

Material Gate Pass. The signatory of the Gate Pass will be nominated by HOD.

12.2.7.2.

Materials Gate Pass shall be issued by the User Department for any materials
issued to User Department which needs to be taken out of the Refinery
premises.

12.2.7.3.

All material passing out of Refinery premises with gate pass should be examined
and checked by the security personnel at the gate. Record of gate passes should
be maintained by the Custody Section, if the same is issued from Stores. For
materials loaded in lorries, it is necessary for the Security to witness the loading
in order to keep a check on the materials being loaded. This would also avoid
unloading at the gate for the purpose of checking, which is particularly difficult
for heavy items and bulks.

12.2.7.4.

Tracking of materials against returnable gate pass shall be the responsibility of

the Officer of the concerned department. The incoming material shall be cross
referenced with the material gate pass number.

12.2.8. Project Leftover materials

Procedure for takeover of leftover project materials shall be as detailed in
Annexure 12 (ref. Finance Circular F/12/035 dtd 15.07.10)

95

12.2.9. Stock Verification

The object of stock verification in the Custody Section of Stores is to ensure that:
a. The materials tally with the description shown in SAP
b. The physical quantity tallies with the SAP quantity
c. The discrepancies noticed are investigated and adjusted / accounted for
12.2.10.
Frequency of Verification shall be as under (ref. Finance Circular
F/12/042 dtd 06.01.11):
Category
A
B
C
D
E

Value #
Exceeding Rs. 5 Lac
Exceeding Rs. 1 Lac and upto Rs. 5 Lac
Exceeding Rs. 25,000.00 and upto Rs. 1 Lac
Exceeding Rs. 5,000.00 and upto Rs.
25,000.00
Upto Rs. 5000.00

Periodicity
Once in 6 months
Once in a year
Once in 3 years
Once in 5 years
Random basis each
year

# per SAP material code per Refinery location

12.2.11.

General Rules for guidance of Stock Verifiers

12.2.11.1. Entering the Field Book

The Stock Verifiers should enter in their field books the detailed particulars of
items to be verified together with the names of the warehouse and the section
that they propose to verify on the following day. Book balance should not be
entered in the field book until the stocks have been actually verified. Concerned
Custodian shall verify and endorse the Stock Verifiers Field Book / report.
12.2.11.2. Description & Nomenclature of materials
It must be seen that the materials verified agree with the description,
nomenclature and the Unit of Measure (UOM) in SAP.
12.2.11.3. Materials under Issue or Receipt
Stock Verifiers should also examine materials under issue and receipt. If the
items under verification happen to be there, it should be seen that the relevant
Issue Vouchers have been duly posted in SAP. If not, the quantities proposed to
be issued should be added to the stock figures.
12.2.11.4. Investigation and resolution of Discrepancies
Any discrepancy found as a result of stock verification between physical and SAP
stocks shall be investigated by the Stores Officer who will make a report thereon
& submit to HOD Materials through Stores in charge. Any adjustments to be
made as a result of this shall be made on the basis of such reports supported by
necessary documentation.

96

CHAPTER - XIII
NON-MOVING ITEMS AND DISPOSAL OF SURPLUS AND SCRAP MATERIALS
13.1. A list containing all non moving items (more than 5 years) shall be circulated every
year to the HODs of the concerned User Departments or multi disciplinary
committee. The multi disciplinary committee or HODs of concerned departments
shall review these lists, identify surplus and inform Materials Department. Based on
these comments / recommendations, Stores Section shall process note for approval
of Competent Authority of User Department as per DOA for declaring these items as
surplus for disposal.
13.2. A list of non valuated stock shall be taken out once a year by Inventory Control
Section and sent to HODs of the concerned User Department for checking if the
parent equipment is still in operation. In case the User Department certifies (with the
approval of their HOD) that the parent equipment has become obsolete, further
action regarding de-capitalization of the items and subsequent identification and
disposal as surplus shall be taken. Suitable information shall also be given to RHQ
Materials Codification team to make necessary updates in SAP Materials Master.
13.3. Institute of Chartered Accountants had issued ASI-2 (2000) and specified that
insurance spares should be capitalized and depreciated along with the original asset.
Machinery spares are classified as insurance spares if they satisfy the two conditions
that they are specific to a particular item of fixed assets and their use is expected to
be irregular. (ref. Finance Circular NO.F/12/02 dated 18.10.06).
Insurance spares should be identified before raising of PR and to be treated as
capital item. The approval of Competent Authority should be taken as required for
capital items before raising of the indent and should be classified / capitalized
properly and not to be included with the normal inventory. Replacement of insurance
spare should be procured under capital budget w.e.f. 01.04.14.
13.4. Items not moved for more than five years with total stock value below Rs. 10,000.00
(excluding spares) may be declared as surplus. Other materials should also be
reviewed critically.
13.5. Wherever the parent equipment is no longer in operation or the equipment / spare
has become obsolete, the spares may be declared as surplus. Approval for
obsolescence and / or non operation shall come from the HOD of the concerned User
Department.
13.6. Off-cut materials
13.6.1. The cut pieces of pipes, sheets, structural etc. less than their standard size of
supplies and cables less than 100 m in case of power cable and 300 m in case of
signal & control cables shall be treated as off-cut materials and charged to the job.
13.6.2. If any such off cut material is to be retained the same shall be retained by the User
Department and the balance material shall be deposited in the scrap-yard.

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13.7. Shelf life items

All items whose life is limited, i.e., whose properties change after a certain period of
time thereby making these materials unsuitable for their intended use are known as
shelf-life items. Examples of such items are refractory, paints, rubber-sheets,
chemicals, catalysts, additives etc. These items should be closely monitored to avoid
expiry of shelf life.
Stores Section shall maintain the batch / shelf life / SLED (Shelf Life Expiry Date) of
Chemicals, Catalysts and Additives at the time of GRN creation in SAP.
Such materials should be procured with staggered delivery so that these are
consumed well within the expiry period. In cases where staggered delivery is not
possible due to various commercial restrictions only optimum quantity should be
procured considering the consumption pattern and the shelf life. Due care should be
exercised in procuring such materials against new Project installations so that these
are received at site at the right time in right quantity.
The responsibility to monitor the shelf life shall rest with the Indenting Department.
Where shelf life of an item is nearing expiry efforts shall be made to consume it or
put to alternate use. If it cannot be consumed and no possible alternative use could
be ascertained, the book value of the materials shall be written off and disposed off
as scrap. Write off shall be obtained from the Competent Authority after recording
proper reasons and such expired stock to be removed from the inventory thereafter.
Exclusions: Chemicals which are directly unloaded at Production site are excluded
from the list of chemicals for which shelf life is being maintained by Stores.
13.8. Scrap
13.8.1.

After salvaging the usable materials, all scrap materials should be deposited
category-wise in the Scrap Yard into different lots by various User Departments
and their representatives. No further approval is required for declaring material
deposited in the scrap yard as scrap.

13.8.2.

Radioactive material, e-waste and hazardous waste shall not be deposited in the
scrap yard and stored in designated area and disposed of as per statutory
requirements in vogue.

13.8.3.

Scrap materials which have to be disposed as hazardous waste will be disposed

on as is where is / arising basis from the demarcated location in the concerned
waste generating units. In such cases Production and HSE Departments will be
consulted. The responsibility of materials being loaded as scrap / hazardous
waste from the various Units inside the Refinery will rest entirely with the
concerned User Department.

13.8.4.

Where scrap is to be disposed off from other than designated scrap yard, specific
approval of respective DGM shall be taken by User Department and the same
forwarded to Stores.

13.8.5.

Reserve Price shall be fixed by a committee formed for the purpose with the
approval of GM. Reserve Price shall be fixed considering the following:

98

i.
ii.
iii.

Last Sale price of similar item at the same Unit / nearby Unit
Current market price given by Auctioning agency
Reserve price of the item should not be fixed less than the scrap value
considering the metallic content.

13.8.6.

Approval for issuing scrap tender along with approvals for Reserve Price and
provision for Subject to Approval (STA) shall be taken as specified in DOA for
sanctioning disposal of waste materials.

13.8.7.

Scrap should be disposed off considering the following:

13.8.7.1. If the highest / lone bid is greater than or equal to the RP the scrap can be sold
with approval as per DOA.
13.8.7.2. If the highest (not lone) bid is less than the RP, scrap shall be sold off with
justification (including review of RP if required / market conditions) and disposal
approval as per DOA.
13.8.7.3. In case of lone bid, less than RP, at least two refloats shall be done after which
the scrap shall be sold off with justification (including review of RP if required /
market conditions) and approval as per DOA.
13.9. Condemned Assets
13.9.1. An asset may become unserviceable on account of any or all of the following:
i.
ii.
iii.
iv.

The operational cost is highly disproportionate in relation to the operational cost of

similar assets.
The working condition of the assets is such that it becomes a safety hazard.
The asset has become obsolete and it is proposed to procure an improved model to
increase the operational efficiency.
The asset has outlived its normal life and cannot be economically operated or
repaired.

13.9.2. The proposal for condemnation and disposal of an asset on account of the above
reasons shall be initiated through the HOD of User Department for examination by
a committee formed with the approval of GM. The committee shall comprise of
representatives of User, Materials and Finance Departments.
13.9.3. The Condemnation Committee shall also fix the reserve price (RP). The RP shall be
the higher of Written Down Value (WDV) or the estimated metallic content value.
In exceptional cases where it is difficult for the committee to assess a realistic RP
and the services of an external valuer is required to fix the RP then approval of GM
shall be taken with justification to appoint the valuer. The RP shall be fixed based
on the assessment of the external valuer by the committee.
WDV shall mean the written down value as on the date of condemnation of asset.
13.9.4. The final recommendations of the Condemnation Committee (including the RP and
STA provision) shall be submitted to competent authority as per DOA for declaring
the asset as condemned and disposal thereof. The User Department member shall
make a specific mention that the asset does not contain any radioactive material.

99

13.9.5.

Asset declared as condemned should be disposed off considering the following:

13.9.5.1. Where RP is more than or equal to WDV

13.9.5.1.1.
13.9.5.1.2.

13.9.5.1.3.

Highest / Lone bid is greater than or equal to RP, asset shall be sold off with
approval as per DOA.
Highest / Lone bid is less than RP but more than or equal to WDV and the RP
has been fixed based on metallic content and / or the recommendation of
external valuer, in such case asset shall be sold off based on the
recommendation of the condemnation committee with justification (including
review of RP if required / market conditions) and disposal approval as per
DOA.
Highest (not lone) bid is less than WDV, asset shall be sold off based on the
recommendation of the condemnation committee with justification (including
review of RP if required / market conditions), write off approval and disposal
approval as per DOA.

13.9.5.2. Where RP is less than WDV

13.9.5.2.1.
13.9.5.2.2.

Highest / Lone bid is greater than or equal to WDV, asset shall be sold off with
approval as per DOA.
Highest (not lone) bid is less than WDV, asset shall be sold off based on the
recommendation of the condemnation committee with justification (including
review of RP if required / market conditions) write off approval and disposal
approval as per DOA.

13.9.5.3. Situations not defined above shall call for at least two refloats after which the
asset shall be sold off based on the recommendation of the condemnation
committee with justification (including review of RP if required / market
conditions), write off approval and approval as per DOA.
13.9.6. Where the asset in question to be disposed off is a transport vehicle, complete
particulars of registration number, type, model, year of make, particulars of road
tax etc. shall be given, wherever applicable. It shall also be made clear in the
terms and conditions of sale that the registration and / or transfer charges shall be
borne by the purchaser.
13.9.7. If no offers are received for any lot / item after three attempts, the book value
shall be written-off as per DOA and the asset disposed off as scrap.
13.10.Surplus
13.10.1. In case of spares identified as surplus due to obsolescence, it should be checked
through SAP whether the same make and model of equipment is available in other
units. If available, the list of surplus spares to be sent to the unit for indicating
their requirement and their response shall be obtained within a period of three
months before action taken for disposal.
13.10.2. If any of the surplus material is required for use by any contractor for jobs in any
IOCL location, the same should be issued to them at current market price (on
landed cost basis) with 20% discount. By this action we will not only be able to
liquidate our surplus but also realize at least 80% of current market value which is
not so in case of disposal through tender. Current market price shall be

100

established based on the latest orders as per SAP and if the same is not available
in SAP then by obtaining offers from the open market.
13.10.3. Non returnable materials, against STO, shall be treated as Surplus Identified and
Surplus Disposed.
13.10.4. Reserve Price shall be fixed as the lower of Moving Average Price (MAP) or last
purchase price (LPP) under that SAP Company Code.
13.10.5. The approval for RP shall be taken from competent authority as per DOA for
declaring the material as surplus and disposal thereof. STA provision shall be kept
while tendering.
13.10.6. Material declared as Surplus should be disposed off considering the following:
13.10.6.1.1. Highest / Lone bid is greater than or equal to RP, surplus material shall be sold
off with approval as per DOA.
13.10.6.1.2. Highest (not lone) bid is less than RP, surplus material shall be sold off with
justification (including review of RP if required / market conditions), write off
approval and disposal approval as per DOA.
13.10.6.1.3. In case of lone bid, less than RP, at least two refloats shall be done after which
the surplus material shall be sold off with justification (including review of RP if
required / market conditions), write off approval and approval as per DOA.
13.10.7. In case of surplus items if no offers are received for any lot / item after three
attempts, the book value shall be written-off as per DOA and the surplus item to
be disposed off as scrap.
13.10.8. If CENVAT benefit has been availed at the time of purchase of the materials which
is being sold as surplus material then the same has to be reversed at the time of
sale of material and the same has to be considered for the purpose of determining
the write off amount.
Wherever the amount of Cenvat cannot be ascertained on materials on which
Cenvat credit was availed, Excise Duty shall be paid on transaction value and shall
be considered for determining the write off amount.
13.10.9. Write off approval shall be taken on individual item / lot basis.
13.11.Method of disposal
Disposals can be done through e-auctioning portals of an auctioning agency such
as MSTC or any other Government approved auctioneers or through open
tendering (physical auction or sealed bid) mode. In case disposal is made by a
mode other than e-auction, modus operandi for the same shall be got approved
by the concerned Units from the Unit Head, with due Finance vetting.
13.12.Earnest Money Deposit
EMD shall be taken as 5% of the RP. EMD of other than H1 bidders shall be released
after completion of auction / tender process. EMD of the H1 bidder shall be retained
till the completion of Sale Order in case the auction / tender leads to a Sale Order. In

101

case the auction does not lead to a Sale Order the EMD of H1 bidder shall be
returned immediately on taking decision to annul the auction / tender.
However, in case of tendering through MSTC, MSTC norms for EMD shall apply.

102

CHAPTER-XIV
Implementation of Integrity Pact Program (IPP)
In order to ensure transparency, equity and competitiveness in the tendering system, IOCL
decided to implement Integrity Pact Program in all tenders above Rs.10 cr w.e.f. 15th July
2008.The guidelines got changed from time to time The latest guidelines relating to IP are
mentioned herein below for uniform implementation across the Corporation (Circular No.
F/12/44 Dated 25/02/11)
1) ED (CA) shall be the Nodal Officer for coordinating all the activities relating to
implementation of the IP program. At the Divisional level, concerned ED (F) shall be
the Divisional' Coordinator. For Corporate Office, ED (CF) shall be the Coordinator.
2) The IP program will be implemented in phases and initially the threshold limit of the
tenders covered under the IP program shall be Rs. 10 Crore and above. In respect of
each of the high value tenders above Rs. 150 Crore an exclusive IEM will be
nominated to oversee the entire process, right from the Notice Inviting Tender (NIT)
/pre-bid stage till the conclusion of the contract including the warranty/guarantee
period. IEM shall be nominated by the Nodal Officer based on a roster for which
proper record shall be maintained by CA Group. It will be mandatory to include the
name of the nominated IEM in the detailed NIT.
3) In case the revised tender estimate or the order value (at the time of placement of
order) exceeds the threshold value (i.e. Rs. 150 Crore) even though the original
tender estimate is below Rs. 150 Crore, IEM shall be nominated / associated with the
tender. Even in case, the order value (at the time of placement of order) falls below
the original tender estimate of Rs. 150 Crore or above, IEM once nominated will
continue to be associated with the tender. Thus the IEM will continue to be
nominated / associated at whichever stage the tender/order-value exceeds the
threshold value of Rs. 150 Cr.
4) Apart from all high value contracts, any contract involving complicated or serious
issues could be brought within the ambit of IP, after approval of concerned Divisional
Directors.
5) The threshold limit of Rs. 10 Crore/ Rs.150 Crore will be determined based on the
total estimated value of the tender (irrespective of the duration of the contract). For
example, if the estimated tender value is Rs. 500 Crore for a LSTK Contract with a
completion schedule of 3 years, Rs. 500 Crore and not Rs. 167 Crore should be
considered for referring to IEM. Similarly for a contract value of Rs.6 Crore for a
period. of 6 months, the relevant value would be Rs. 6 Crore and not Rs. 12 Crore
6) In case of transportation, Capex, material procurement tenders, etc. the threshold
value shall be calculated based on the total estimated value of the entire work as per
approval of the competent authority inviting the tender. In such cases, even though
the individual contract value may be less than Rs.10 Crore, the bidder will still have
to sign the I P agreement while submitting the tender
7) All categories of tenders including those related to transportation, "Capex",
Proprietary supplies, supplies from Original Equipment Manufacturers/Suppliers and
services of proprietary nature as well. as single tender shall be covered under the IP

103

program, unless specific approval is taken for exemption. For any exemption of a
particular tender category from purview of 1P, the issue will be first deliberated with
the IEMs and thereafter note, with full justification, shall be put up by the concerned
department for approval by Competent Authority. A uniform approach would be
adopted in all such cases to avoid discrimination against any bidder(s).
8) For vendor familiarization, as a confidence building measure, each Division, during
the tender invitation stage itself, will make suitable efforts to familiarize the vendors
with regard to I P.
9) (i) The IP Agreement (IPA), finalized by the CA Group, shall form a part and parcel of
all tenders above the threshold limit of Rs. 10 Crore (initially). (The IPA and other IP
documents are hoisted on www.iocl.com.) All the prospective bidders willing to
participate in the tenders above Rs. 10 Crore shall have to necessarily sign the IPA in
order to be eligible to participate in the tender. In case the bidder does not sign the
IPA, a reasonable. grace time as determined by the Tender Inviting Authority may be
given and thereafter, the bidder shall be disqualified. However, no EMD shall be
forfeited in such cases.
(ii) In the case of Proprietary suppliers, original Equipment Manufacturers/Suppliers
and Service providers (of proprietary nature). Any instance of bidder's refusal to sign
IPA, due to partial or total non-acceptance of IPA terms, despite sufficient
opportunity, will be first brought to the notice of the IEMs and thereafter the
approval of Order Approving Authority will be taken for any dispensation from IP in
such cases, after providing full justification.
10) All CVC guidelines as well as internal guidelines, policies. and procedures pertaining
to Invitation of Tender, Award of Contracts, etc shall be followed while implementing
the IP.
11) In case there is violation of the IPA after submission of the tender, the tender
inviting authority shall suitably consider the case and may forfeit the EMD. Similar
procedure shall be followed in case of any violation after the award of the contract
after considering the various factors.
12) IPA would prevail over the General Condition of Contract (GCC) and General
Purchase Conditions (GPC) with regard to specific clauses of the IPA including any
consequential breaches by the bidder. However, the imposition of liabilities (period of
holiday listing, amount of damages, forfeiture of EMD/SD etc) arising out of the
breach shall be decided by the tender inviting / competent authority. Any decision on
holiday listing of any bidder on account of violation of the Integrity pact shall be
decided on case to case basis considering the severity of the violation and. the
existing organizational procedures.
13) Any violation/alleged violation of IPA would not be subject matter of Arbitration as
provided under the contract.
14) All complaints related to IP tenders, above Rs. 10 Crore, directly received by IEMs or
any other source, including the Vigilance/Functional Department, will be first
forwarded to the Nodal Officer, who shall, in turn, forward the complaint to the
concerned department or the IEMs as the case may be. The Functional Group's
response to the complaint, duly approved by the concerned Functional Director, will
be submitted to the CA Group for verification, well in advance. Thereafter, the

104

concerned Division shall make the final presentation to the full panel of IEMs for their
views in the matter. Record of all complaints, including response thereof, and all
other related materials shall be maintained by the concerned Functional Group.
15) The IEMs, if required, shall investigate the complaint and submit a report to the
Chairman, IOCL within a period of-6-8 weeks. The Divisional Coordinator shall
provide the IEMs with all necessary documents for the investigation of the complaint,
if so required.
16) Anonymous complaints will be examined / investigated on grounds of merit.
Complaints with non-vigilance angle will be forwarded to IEMs while complaints with
vigilance angle will be forwarded to CVO for further necessary action. However, it will
be Management's prerogative to decide the nature of complaint and designate the
investigating authority.
17) Complaints relating to Dealership/Distributorship will not fall under the purview of IP
as the procedure does not entail tendering and selection is based on the Marketing
Discipline Guidelines, as amended from to time by the Government.
18) In order to ensure timely nomination of IEMs by the Nodal Officer, in respect of
Tenders above Rs. 150 Crore, the respective Functional Department/Division will put
up a note, routed through the Divisional Coordinator, with all relevant tender details,
well before publication of the NIT. In case of any delay in putting up such note, the
Functional Department will also record the reasons of delay
19) In line with the CVC guidelines, information relating to tenders in progress and
tenders under finalization needs to be shared with the IEMs. Accordingly, in respect
of all tenders above Rs. 150 Crore, the IEMs will be apprised of the stage-wise
progress report, as per formats provided by CA Group. The Functional Group will
submit the Report to the Nodal Officer i.e. ED (CA), well in advance, duly routed
through the concerned Divisional Coordinator for onward' submission to the
nominated IEM. Further, a presentation shall be made by the Functional Department
to the full panel of IEMs, in the structured monthly meetings, based on the above
report(s) submitted to the nominated IEM. The various stages of submission of
report are

Report 1 - NIT issue stage

Report 2 Upon opening of tender
Report 3 - After completion of evaluation of techno-commercial bids of Tender and
approval for opening of price bids
Report 4 - After completion of evaluation of price bids of tender (only after approval
for placement of order)
Report 5 Upon award of work order and acceptance of work order by the party

20) To comply with the CVC Guidelines, the Divisional Coordinator shall submit MIS (in
prescribed formats by 7th of each month) towards IP compliance to the Nodal
Officer, for compilation and submission to CVO (for onward reporting to CVC) and
apprising the IEMs
21) For tenders above Rs. 10.Crore (& less than. Rs. 150 Crore) the IEMs shall only be
broadly involved in the process of implementation of IP program. All the relevant
details regarding such tenders shall be compiled by the respective Divisions on a
monthly basis and submitted in the form of consolidated MIS.

105

22) A separate, dedicated section on I P, hosted on www.indianoiltenders.com shall be

regularly updated so as to provide the stakeholders with the relevant information
regarding implementation of IP Programme including the progress of tenders(above
Rs. 150 Crore) immediately upon issue of NIT. The Divisions shall provide timely
inputs to CA Group to ensure regular updation
23) In case of joint OMC tenders, the threshold value will be based on the estimated
value of the tender irrespective-of the value apportioned to IndianOil. For joint OMC
tender invited by IndianOil, on behalf of the Oil Industry, IEM will be nominated in
line with our IP procedures, so as to ensure accountability for compliance to IP
Guidelines up to the tender evaluation/work-order stage, as mutually agreed
between the OMCs. Any subsequent complaint (after tender evaluation/work-order
stage, as applicable) shall be referred to the respective IEMs of the concerned OMCs.
24) Where IndianOil is a bidder in response to a tender and if the tender falls within the
purview of IPA as applicable to tenderer, IndianOil shall submit its bid in line with the
IPA requirements of the tenderer and no vetting of Indian Oil's Legal Group is
required before signing. The above is applicable only in respect of the Agreement to
be executed by IndianOil as a bidder against the tender of a PSU / Govt.
Department, which incorporates therein the Agreement under IPA.

106

Annexure 1
Sample Format for NIT for Press Tenders

IndianOil
Refineries Division
.
(Materials & Contracts Section)
NOTICE INVITING E - TENDERS
(GLOBAL BIDDING / DOMESTIC COMPETITIVE
BIDDING)
Indian Oil Corporation Limited invites electronic bids
through its website https://iocletenders.gov.in under
two-bid system from bonafide bidders as per the
following details : NIT No. :
Description of Material
.

Sale Period : .. to ..
Bid submission closing date and time: .. at
.
Contact person (s):
Designation
Tel :.. ; Fax :

Email : .@indianoil.in
Note: Any Addendum / Corrigendum / Sale date extension in
respect of above tender shall be issued on our website :
'https://iocletenders.gov.in' only and no separate notification
shall be issued in the press. Bidders are therefore requested to
regularly visit our website to keep themselves updated.

GENERAL PURCHASE CONDITIONS

TABLE OF CONTENTS
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
10.0
11.0
12.0
13.0
14.0
15.0
16.0
17.0
18.0
19.0
20.0
21.0
22.0
23.0
24.0
25.0
26.0
27.0
28.0
29.0
30.0
31.0
32.0
33.0
34.0
35.0

DEFINITIONS
CONFIRMATION OF ORDER
PRICE
EARNEST MONEY
TERMS OF PAYMENT
VENDORS DRAWINGS AND DATA REQUIREMENT
FREE ISSUE MATERIALS (for incorporation in the Indigenous supply)
THE BILL OF MATERIALS
MODIFICATION
SUB-CONTRACTS
EXPEDITING
RESPECT FOR DELIVERY DATES AND PRICE DISCOUNT
DELAYS DUE TO FORCE MAJEURE
WARRANTY OF TITLE
INSPECTION AND TESTING
ACCEPTANCE OF MATERIALS & GUARANTEES
FREIGHT, TAXES AND DUTIES
WEIGHTS AND MEASUREMENTS
PACKING AND MARKING
DESPATCH INSTRUCTIONS
SHIPMENT AND SHIPMENT NOTICES
MARINE AND TRANSIT RISK INSURANCE
SHIPPING AND SHIPPING DOCUMENTS
INVOICING & NEGOTIATION OF DOCUMENTS
TRANSFER OF TITLE AND RISK OF LOSS
TERMINATION
RECOVERY OF SUMS DUE
NON-WAIVER
COMPLETE AGREEMENT
EXCLUSION OF THE GOVT. OF INDIAS LIABILITY
TECHNICAL INFORMATION/CONFIDENTIALITY
MODE OF COMMUNICATION
PART ORDER/REPEAT ORDER
ARBITRATION AND GOVERNING LAW
JURISDICTION

ANNEXURE
ANNEXURE
ANNEXURE
ANNEXURE
Material(s)
ANNEXURE
Material(s)

A:
B:
C:
D:

Proforma for Bank Guarantee in lieu of Earnest Money Deposit

Proforma for Irrevocable Letter of Credit
Proforma for Performance Bank Guarantee
Proforma for Bank Guarantee for full value of Free Issue

E:

Proforma for Bank Guarantee for full value of Rejected

GENERAL TERMS AND CONDITIONS OF PURCHASE

1.0

DEFINITIONS

1.1

Unless repugnant to the subject or context thereof, the following expressions

herein used shall carry the meaning hereunder respectively assigned to each,
namely:
(a)

Bulk Consumables mean items specifically defined in the Contract

Documents to constitute bulk consumables.

(b)

Contract shall mean the contract as derived from:

i)
ii)
iii)
iv)

The Tender Documents;

Agreed Variations to the Tender Documents;
Vendors Priced bid; and
The Purchase Order.

(c)

Contract Document(s) shall mean individually and collectively the

documents constituting the contract.

(d)

Defect Liability Period in respect of:

(i)
months;

Bulk Consumables shall be the date of delivery plus 6 (six)

(ii)

In the case of other Material(s) shall be 18 (eighteen) months

from the date of delivery or 12 (twelve) months after the same
have been put in service or commissioned, whichever is earlier;

(iii)

In the case of altered or replaced Material(s):

(e)

(a)

With respect to Bulk Consumables, shall be 6 (six) months

from the date of alteration, repair or replacement as the
case may be; and

(b)

With respect to other Material(s), shall be 12 (twelve)

months from the date of alteration, repair or replacement
as the case may be.

Delivery
(i)

with respect to Imported Material(s) means the date of

completing shipment of the Material(s) on board the designated

vessel or aircraft at the designated port or place of shipment,

securely packed and loaded below deck and unless otherwise
determined, shall be deemed to be the date of the relative Bill of
Lading or Airway Bill; and
(ii)

with respect to Indigenous Material(s) means the date of

completing shipment of Material(s) F.O.R./F.O.T. securely
packed and loaded and unless otherwise determined, shall be
deemed to be the date of the relative Truck/lorry Receipt or
Railway Receipt.

(f)

Earnest Money Deposit means the Demand Draft or Bankers Pay

Order or the bank guarantee furnished by the Vendor in lieu of cash in
support of his/its bid as required by the Bid Documents.

(g)

Equipment means plant, machinery, equipment, instruments,

computer, control and other electronic and electrical systems, and shall
include parts, components, assemblies and sub-assemblies thereof.

(h)

Free Issue Material(s) means any equipment, parts or components

or spares to be supplied by IOCL to the Vendor which are to be
incorporated in any supply of Indigenous Material(s).

(i)

IOCL means Indian Oil Corporation Ltd., a company incorporated in

India and having its registered office at G-9, Ali Yavar Jung Marg,
Bandra (East) Mumbai 400 051 and having the Head Office of its
Refineries Division at Scope Complex, Core 2, 7 Institutional Area,
Lodhi Road, New Delhi-110 003 and includes its successors, assigns
and all persons through whom it acts in any matter for the purpose of
the Tender or the Contract.

(j)

Imported Material(s) mean(s) the materials to be fabricated,

manufactured or procured by the Vendor outside India for shipment to
India under the Contract.

(k)

Indigenous Material(s) mean(s) materials to be fabricated,

manufactured or procured by the Vendor within India for supply under
the Contract.

(l)

Inspectors means Inspectors nominated, appointed, approved or

deputed by IOCL for inspection of the Material(s) prior to Delivery.

(m)

Material(s) means any and all raw materials, manufactured articles,

equipment, spares and other goods and supplies whatsoever and
includes wherever applicable drawings, data, specifications and
intellectual property rights and all services (including but not limited to
design, fabrication, inspection, delivery and testing) required to be
supplied, done, performed, prepared or undertaken to meet the
requirements of the Contract.

(n)

Procurement Coordinator means the representative or agency

appointed by IOCL for managing, expediting and/or coordinating the
supply of Material(s).

(o)

Project means the Project or Refinery for which the Material(s) is/are
required.

(p)

Project Site means the site of the Refinery unit or site of the Project
for which the Material(s) is/are required.

(q)

Purchase Order means IOCLs acceptance of the Vendors offer/bid

and includes any formal or detailed Purchase Order issued by IOCL
pursuant to the acceptance of the bid.

(r)

Stipulated Delivery Period means the date(s) for delivery of the

Material(s) as stipulated in the Contract and failing such stipulation,
shall mean the date(s) for such delivery(ies) as agreed between the
Vendor and IOCL.

(s)

Tender Documents with reference to the Purchase Order mean:

(i) Material Requisition/Request for Quote;
(ii) General Terms and Conditions of Purchase;
(iii) Technical Specifications;
(iv) Special Conditions of Purchase ( if any);
(v) Addendum (a) (if any) to the Tender Documents.

(t)

Total Contract Value means total value of the Material(s) and

services to be supplied as specified in the Purchase Order, exclusive of
reimbursable taxes and duties.

(u)
Vendor means the successful bidder on whom the Purchase Order is
placed.
1.2

Interpretation of Contract Documents

1.2.1 The several Contract Documents forming the Contract are to be read together
as a whole and are to be taken as mutually explanatory.
1.2.2 Should there be any doubt or ambiguity in the interpretation of the Contract
Documents or in any of them, the Vendor shall prior to commencing the
relative supply or work for supply under the Contract apply in writing to IOCL
for resolution of the doubt or ambiguity. Should the Vendor fail to apply to
IOCL within 7 days from the date of receipt of the Order for its clarification as
aforesaid, the Vendor shall perform the relative work and/or make the relative
supply at his own risk.
1.2.3 Any item of supply or service relative thereto shown, indicated or included by
expression or implication in any document forming part of the Contract shall be

deemed to form part of the Scope of Supply with the intent that the indication
or inclusion of the supply or service within any of the said documents shall be
a sufficient indication of the Scope of Supply or service covered by the
Contract.
1.2.4 No verbal agreement or assurance, representation or understanding given by
any employee or officer of IOCL or so understood by the Vendor shall anywise
bind IOCL or alter the Contract Documents unless specifically given in writing
and signed by or on behalf of IOCL as an Agreed Variation to the relative
term(s) in the Contract Document(s).
1.2.5 Clause headings given in this or any other Contract Documents are intended
only as a general guide for convenience in reading and segregating the
general subject of the various clauses, but shall not govern the meaning or
import of the clauses there under appearing or confine or otherwise affect the
interpretation thereof.
1.3

Irreconcilable Conflicts
Subject to the provisions of Clause 1.2 hereof, in the event of an irreconcilable
conflict between the provision of these General Terms and Conditions of
Purchase and/or the Special Conditions of Purchase and/or Addendum (a)
and/or the Agreed Variations to the Tender Documents and/or the Purchase
Order and/or between any of the other said documents so that the conflicting
provision(s) cannot co-exist, to the extent of such irreconcilable conflict, the
following order of precedence shall apply so that the conflicting provision(s) in
the document lower in the order of precedence set out below shall give way to
the conflicting provision(s) in the document higher in the order of precedence,
namely:
(i)
(ii)
(iii)
(iv)
(v)
(vi)

Agreed Variations to the Tender Documents;

Purchase Order;
Addendum/Addenda (a) to the Tender Document;
Special Conditions of Purchase;
General Terms and Conditions of Purchase;
Other Contract Documents.

2.0

CONFIRMATION OF ORDER

2.1

Without prejudice to the formation of contract by acceptance of bid, the Vendor

shall acknowledge the acceptance of the Purchase Order by signing and
returning the duplicate/photocopy within 7 (seven) days following receipt of
the Purchase Order and such acknowledgement shall constitute conclusive
evidence of a concluded contract without exception, on the terms and
conditions set out in the Bid Documents.

2.2

Should the Vendor fail to acknowledge acceptance of the Purchase Order

within the period specified above, IOCL may, without prejudice to any other
right or remedy available to it, forfeit the Earnest Money Deposit.

3.0

PRICE

3.1

Unless otherwise specifically stipulated, the price shall be firm and shall not be
subject to escalation for any reason.

3.2

Unless otherwise specifically stipulated, the price for Indigenous Material(s):

(i)

shall be inclusive of
road/rail worthy water-proof packing and
forwarding charges upto effecting delivery at F.O.T./F.O.R despatch
point and shall also be inclusive of inland freight and octroi, terminal
taxes and entry taxes as leviable on the transportation or entry of goods
into any local area or limits pursuant to the Contract; and

(ii)

shall be exclusive of transit insurance, VAT, Central Sales Tax, State

Sales Tax, Excise Duty and/or such other imposts which are leviable by
law on the manufacture of finished goods or their sale to IOCL pursuant
to the Contract.

3.3 (a) If it is stipulated that octroi, terminal taxes and entry taxes are to be borne by
IOCL, the Vendor shall arrange for the transporter to pay the octroi, terminal
taxes and/or entry taxes, if any leviable and claim reimbursement thereof from
IOCL against proof of payment.
(b) If it is stipulated that dispatch shall be on freight to pay basis, the Vendor
shall advise the transporter to collect the freight from IOCL after the full
quantity of the Material(s) has/have been delivered in good condition to the
Project Site.
3.4

Unless otherwise stipulated, the price of Imported Material(s) shall be the FOB
/FCA price of Material(s) and shall be inclusive of sea/air worthy water-proof
packing and forwarding charges and loading of Material(s) below deck of
vessel and all taxes upto delivery of Material(s) at stipulated Indian Port,
shipped through Indian flag vessels, but shall be exclusive of marine/air
insurance and ocean/air freight. Except for stipulations to the contrary in the
Contract, the provisions of FOB (INCOTERMS-2000) shall apply to ocean
shipments and the provisions of FCA (INCOTERMS-2000) shall apply to air
shipments.

4.0

EARNEST MONEY

4.1

A bid is liable to be rejected unless it is supported by earnest money of a value

as provided in the Purchase Requisition/ Request for Quote.

4.2

Earnest Money by the tenderers shall be accepted only in the form of a

Demand Draft or Bankers Pay Order drawn on a local bank in favor of Indian
Oil Corporation Limited. Bank Guarantee in the format set forth in Annexure
A hereto may be furnished in lieu thereof if the amount of Earnest Money
Deposit is not less than Rs. 100,000/-(Rupees one hundred thousand only).

4.3

If the Earnest Money is in the form of a Bank Guarantee, the validity of the
Bank Guarantee shall be extended by the Vendor at the Vendors cost and
initiative for a period of 3 (three) months beyond the date of the acceptance of
bid by IOCL, failing which the Bank Guarantee may be encashed by IOCL and
the proceeds held as security for the performance of Vendors obligation and
the due discharge of Vendors liability under the resultant Contract until the
Vendor acknowledges the acceptance of the Purchase Order and furnishes
the Performance Guarantee. Should the Vendor fail to accept the Purchase
Order and/or furnish the Performance Guarantee within the time specified in
this behalf, or specifically permitted by IOCL for the purpose, IOCL may
encash the Bank Guarantee furnished by the Vendor by way of Earnest Money
Deposit and/or forfeit such proceeds or other encashable Earnest Money
Deposit held by it in cash without prejudice to any other right or remedy
available to it.

4.4

The Earnest Money paid by the unsuccessful bidder(s) shall

refunded/returned within 15 days of the finalisation of the Tender by IOCL.

4.5

Earnest Money furnished by a tenderer may also be forfeited in the following

circumstances:

be

(a)

If the tenderer alters or modifies or withdraws their bid prior to opening

of the price bid and within the specified validity period of the Tender; or

(b)

If the tenderer withdraws their bid after the Tender is opened.

5.0

TERMS OF PAYMENT

5.1

For Imported Material(s):

a)

The price of Imported Material(s) shall be paid in the currency specified

in the Contract.

b)

100% (one hundred percent) of the price of the relative Imported

Material(s) (after considering price reduction for delay, if any, as per
clause 12.0) will be paid under an irrevocable Letter of Credit against
submission of documents specified in the Letter of Credit. The Letter of
Credit shall be substantially in the format set forth in the Annexure B
hereto and shall be established either by the State Bank of India or
other bankers of IOCL in India.

c)

Unless otherwise specified, the Vendor may draw against the Letter of
Credit on presentation of all the following documents:
(i)
(ii)
(iii)

Invoice
Clear Bill of Lading/Airway Bill covering the Material(s) invoiced
Packing list for the consignment

(iv)
(v)
(vi)
(vii)
(viii)
(ix)
(x)

5.2

Third party Inspectors Certificate covering the invoiced

Material(s) wherever applicable
Test/Composition Certificate
Certificate of origin
Drawing(s)/Catalogue(s) covering the Material(s), wherever
applicable.
Export Certificate, wherever applicable
Invoice of Inspectors charges, wherever applicable
IOCLs acknowledgement of Performance Bank Guarantee
wherever applicable.

d)

Bank charges payable to IOCLs banker for opening of the Letter of

Credit shall be borne by IOCL and bank charges payable to the
Vendors banker shall be borne by the Vendor.

e)

Should the Vendor desire to get the Letter of Credit confirmed by any
other banker, confirmation charges will be borne by the Vendor.

f)

Unless otherwise agreed, the Letter of Credit shall not permit drawing in
more than 3 (three) tranches.

g)

Unless otherwise specified, the Vendor shall furnish a Bank Guarantee

towards performance favoring IOCL within 15-days of the Purchase
Order for an amount equivalent to 10% (ten) of the Price of Material(s)
from a Scheduled bank in India (including an Indian branch of a foreign
bank) acceptable to IOCL in the format set forth in Annexure C
hereto valid (in the first instance) for the period specified in Clause
16.12

h)

In the event that IOCL requests the Vendor to hold or to warehouse the
Material(s) for any period after the Material(s) are ready for shipment,
the storage charges as agreed, shall be borne by IOCL in addition to
the Price.

For Indigenous Supply:

a)

Unless otherwise specified in the Contract, where the total contract

value does not exceed Rs.50,000/- (Rupees fifty thousand only), IOCL
shall release 100 % of the relative Price of Material(s) within 30 days of
receipt of the Material(s) at Project Site and their acceptance.

b)

Unless otherwise specified in the Contract, where the total contract

value exceeds Rs. 50,000/-(Rupees fifty thousand only) but is less than
Rs. 1,00,000/- (Rupees one hundred thousand only), IOCL shall release
90% of the relative Price of Material(s) on delivery of the documents
specified in (c) hereof below relative hereto, and will release the
balance 10% of the Vendors invoice within 30 (thirty) days of receipt of
Material(s) at Project Site and their acceptance.

c)

Unless otherwise specified, where the total contract value of the

Material(s) is Rs. 1,00,000/- (Rupees one hundred thousand only) and
above, IOCL shall release 90% of the relative price against the
documents specified here below relative hereto through IOCLs
bankers and will release the balance 10% on the Vendors invoice
within 30 (thirty) days of receipt of Material(s) at the Project Site and
its/their acceptance. Unless otherwise mentioned, the specified
documents are:
(i)
(ii)

Invoice
Clear Railway Receipt/Truck Receipt/Goods Receipt covering
the Material(s) invoiced
(iii)
Packing list for the consignment
(iv)
Third Party Inspectors Certificate covering the invoiced
Material(s)/ Release Note, wherever applicable
(v)
Test/Composition Certificate, wherever applicable
(vi) IBR Certificate/CMRS Certificate, wherever applicable
(vii) Drawing(s)/Catalogue(s) covering the Material(s) , wherever
applicable
(viii) Guarantee/Warranty Certificate(s), wherever applicable
(ix)
Invoice of Inspectors charges, wherever applicable
(x)
Freight Memo(s) if freight is not included in the Price and the
RR/TR/GR does not give the freight particulars.
(xi)
Acknowledgement by IOCL of receipt of Performance Bank
Guarantee (wherever applicable)
d)

The financial settlement of the Vendors invoice is liable to be withheld

in the event the Vendor fails to submit the drawings, data and all other
documents as called for in the Purchase Order.

(e)

Unless otherwise specified, the Vendor shall furnish a Bank Guarantee

towards performance favoring IOCL within 15-days of the Purchase
Order for an amount equivalent to 10% (ten) of the Price of Material(s)
from a Scheduled bank in India (including an Indian branch of a foreign
bank) acceptable to IOCL in the format set forth in Annexure C
hereto valid (in the first instance) for the period specified in Clause
16.12.

10

6.0

VENDORS DRAWINGS AND DATA REQUIREMENT

The Vendor shall submit drawings, data and documentation in accordance with
(but not limited to) what is specified in the Purchase Requisition/Tender
documents and/or Vendors drawing and data form attached to the Purchase
Order, within 30 (thirty) days of the Purchase Order. The types, quantities
and time limits for submitting these must be respected by the Vendor and the
Material(s) shall be deemed not to have been delivered for all purposes
(including payment) until completion of the said submissions to the satisfaction
of IOCL.

7.0

FREE ISSUE MATERIALS (for incorporation in the Indigenous supply)

If the Purchase Order involves the incorporation of any Free Issue Material(s):
(a)

The Vendor shall prior to taking delivery of the Free Issue Material(s)
arrange for a Bank Guarantee for the full value of the Free Issue
Material in the format set forth in Annexure D hereto valid from the
date of the receipt of the Free Issue Material(s) until delivery of the
Material(s) in which the Free Issue Material(s) has/have been
incorporated.

(b)

The Vendor shall inspect the Free Issue Material(s) at the time of taking
delivery thereof and satisfy itself of the quality, quantity and condition of
the Free Issue Material(s). IOCL shall not be liable for any claims or
complaints whatsoever in respect of the quality, quantity or condition of
the Free Issue Material(s) once the Vendor has taken delivery thereof.

(c)

All Free Issue Material(s) shall be taken delivery of, transported, held,
stored and utilized by the Vendor as trustee of IOCL, and delivery of the
Free Issue Material to the Vendor shall constitute an entrustment
thereof by IOCL to the Vendor with the intent that any transportation,
utilization, application or disposal thereof by the Vendor otherwise than
for incorporation in the Indigenous Material(s) shall constitute a breach
by the Vendor.

(d)

The Vendor shall transport the Free Issue Material(s) only by such
transportation as is suitable and shall hold and store the Free Issue
Material(s) only at such place and/or premises that are air and water
tight and otherwise suitable for the storage of the Free Issue Material(s)
so as to prevent damage or deterioration or theft or other loss, and shall
arrange such watch and ward as shall be necessary to ensure the
safety thereof.

(e)

Notwithstanding the Bank Guarantee mentioned in sub-paragraph (a)

above, the Vendor shall replace any Free Issue Material(s) which is/are
lost, damaged, misused, stolen or deteriorated with other Material(s) of
equivalent quantity and quality and condition, and the same shall be
deemed to constitute Free Issue Material(s) and the provisions of sub-

11

paragraphs (a) to (f) hereof shall apply thereto in the same manner as to
the originally supplied Free Issue Material(s).
(f)

Unused Material(s) from the Free Issue Material(s) shall be returned by

the Vendor to IOCL and if IOCL so directs, the Vendor shall dispose of
the same by sale or otherwise on such terms and conditions as IOCL
may stipulate or approve and the Vendor shall pay to IOCL the sale
proceeds of the Material(s) so disposed of by sale.

8.0

THE BILL OF MATERIAL(S)

8.1

Where the price of Material(s) is a lumpsum price and pro-rata payment is

envisaged in the Purchase Order, the Vendor shall within 30 (thirty) days of
the issue of the Purchase Order furnish to IOCL for approval, a priced and
detailed Bill of Material(s)/ Billing Schedule as required covering all Material(s),
which shall conform to the price break-up and Total Contract Value given in
the Purchase Order. The Bill of Material(s) shall operate as the Billing
Schedule for payment of the price of the Material(s). In preparing the Bill of
Material(s), the Vendor shall ensure that all contracted Material(s) are
included in the Bill of Material(s) so as to ensure that IOCL is not required, due
to any oversight or omission, to pay any taxes and duties on a value in
excess of the total Value indicated in the Contract. Should IOCL be required to
pay excise duty, sales tax or customs duty on account of such oversight or
omission, the Vendor shall reimburse such excess payments to IOCL.

8.2

The Material Safety Data Sheets in the case of catalysts and chemicals and
other items where ever applicabe shall also be submitted within 30 days after
receipt of the Purchase Order.

9.0

MODIFICATION

9.1

IOCL shall have the right to request changes or modifications in the technical
documents and/or specifications comprised in the Contract, subject to the
Vendors approval thereto. IOCL shall bear any additional cost and shall be
entitled to the benefit of any reduced cost resultant upon any such change or
modification.

9.2

As soon as possible after receipt of a written request from IOCL for change(s),
the Vendor shall furnish in writing to IOCL an estimate of the additional cost or
benefit for the change(s) and/or modification(s) requested and its effect on the
delivery date. On agreement with respect to the enhanced/reduced cost and
modified delivery time, which shall be finalized within 10 (ten) days of the
request for the modification, IOCL shall issue an amendment to the Purchase
Order,
and
the
Vendor
shall
promptly
proceed
with
the
change(s)/modification(s) contemplated by the amended Purchase Order.

10.0

SUB-CONTRACTS

10.1

The Vendor shall not assign the Contract in whole or part without obtaining the
prior written consent of IOCL.

12

10.2

The Vendor shall, notwithstanding the consent and assignment, remain jointly
and severally liable and responsible to IOCL together with the assignee, for
and in respect of the due performance of the Contract and the Vendors
obligations there under.

11.0

EXPEDITING

11.1

IOCL may appoint a Procurement Coordinator to manage, expedite and

coordinate the manufacture, shipment and/or despatch of Material(s) covered
by the Contract.

11.2 The Vendor shall furnish to the Procurement Coordinator within 30 (thirty)
days of receiving the Purchase Order, the required number of copies of
documents including but not limited to Schedule of manufacture/PERT chart,
unpriced copies of sub-orders, phased programme of item-wise manufacture,
testing and delivery and any other information and/or documents as may be
called for by the Procurement Coordinator.
11.3 The Procurement Coordinator shall have free access to the Vendors shop and
sub-suppliers shop during normal working hours and shall be provided all the
necessary assistance and information to help him perform his job.

12.0

RESPECT FOR DELIVERY DATES AND PRICE DISCOUNT

12.1

The time and date of Delivery of Material(s) as stipulated in the Contract shall
be adhered to on the clear understanding that the Price(s) of the Material(s)
has/have been fixed with reference to the said Delivery date(s).

12.2

If any delay is anticipated by the Vendor in the delivery of the Material(s) or

any of them beyond the stipulated date(s) of Delivery, the Vendor shall
forthwith inform IOCL in writing of such anticipated delay and of the steps
being taken by the Vendor to remove or reduce the anticipated delay, and shall
promptly keep IOCL informed of all subsequent developments.

12.3

If any Material(s) is/are not delivered within the Delivery date(s) stipulated in
respect thereof, IOCL shall be entitled to a discount by way of price adjustment
in a sum equivalent to 0.5% (one half percent) of the price of such Material(s)
per week or part thereof that the Material(s) remain(s) undelivered beyond the
stipulated Delivery period in respect thereof, subject to a maximum discount of
5% (five percent) of the Total Contract Value. Such discount shall be given by
the Vendor by equivalent reduction in the invoice value before presentation of
documents to the Bank/IOCL for payment. Should the Vendor fail to deliver
the Material(s) or to make such adjustment, the discount may be recovered by
any other means.

12.4

Without prejudice to its rights under Clause 12.3 hereof and to entitlement to
discount(s) accrued in terms thereof and in addition thereto, IOCL may at any
time after the expiry of the stipulated date(s) of Delivery in respect of any

13

Material(s), at its discretion terminate in whole or part the Contract in respect

of the undelivered Material(s) or any of them and either purchase such
Material(s) from any other available source at the risks and costs of the Vendor
and recover from the Vendor any additional cost incurred by it on such
purchase or recover from the Vendor without such purchase the difference
between the market and contract price of such Material(s) on the date of
termination of Contract relative thereto.
13.0

DELAYS DUE TO FORCE MAJEURE

13.1

If a force majeure event as defined below, affecting the Vendor, arises prior to
the expiry of the stipulated Delivery period in respect of any Material(s) and the
Vendor intends to claim extension of the stipulated date of delivery in respect
of such Material(s) or any of them, the Vendor must advise IOCL by notice in
writing of such event by means of communication which secures undisputed
service of the notice not later than 10 (ten) days of the occurrence of the event.
Such occurrence shall be duly certified by a local Chamber of Commerce or
statutory authority. The Vendor shall within 10 (ten) days of the end of the
Force Majeure event similarly notify IOCL of such cessation, and of the period
and Material(s) for which an extension of Delivery date(s) is consequently
claimed. Such notification shall be a mandatory pre-condition to a claim for
such extension.

13.2

Events of Force Majeure shall mean:

(a)
(b)

natural calamities, civil wars and national strikes which have a duration
of more than seven consecutive working days; and
strike at Vendors works for more than 10 consecutive days.

13.3

Commercial hardship and third party breach, strike, shutdown or lockout other
than as specified in Clause 13.2 hereof shall not constitute an event of Force
Majeure.

13.4

In the event of Force Majeure, each party shall bear any costs incurred by it
resulting therefrom. The party affected by Force Majeure shall use all
reasonable efforts to prevent and reduce to a minimum and mitigate the effect
of delays occasioned by such Force Majeure.

13.5

Subject to receipt of notices under Clause 13.1 above, the stipulated Delivery
date(s) may be extended by IOCL. The decision of IOCL on the Vendors
claim for extension of time and the time of extension and Material(s) on which
extension is given shall be final and binding on the Vendor. On the grant of
such extension, the extended date shall be deemed to be the stipulated
Delivery date for the purpose of calculating price discount under Clause 12.3
hereinabove.

13.6

If the Vendor is prevented from fulfilling its contractual obligations for a

continuous period of three (3) months because of Force Majeure, then the
Vendor and IOCL shall consult with each other with a view to agreeing on the
action to be taken under the circumstances, and failing such agreement, IOCL

14

shall be entitled to terminate the contract in whole or to the extent that its
performance is prevented by Force Majeure.
14.0

WARRANTY OF TITLE

14.1

The Vendor warrants that the Material(s) sold and supplied by it to IOCL
pursuant to the Contract shall be free from any and all defects in title including
but not limited to any charge, third party claim, mortgage, hypothecation,
foreclosure, lien, restriction, injunction, attachment or encumbrance
whatsoever and shall hold and keep IOCL indemnified from and against any
and all contrary claims, demands, actions and proceedings and all costs
(including legal costs), charges, expenses and losses suffered or incurred by
IOCL as a consequence thereof and/or to defend any such claim, demand,
action or proceeding.

14.2

The Vendor shall be understood to have represented to IOCL that the use by
IOCL of the Material(s) supplied by the Vendor will not infringe any third party
patent rights or pending patent applications or other intellectual property rights.
Accordingly, the Vendor will hold harmless and indemnify IOCL against all
costs (including legal costs), charges and expenses incurred or any damages
or other sums that may be assessed or become payable under any decree or
judgment of any court or under any settlement resulting from any suit, claim or
action for infringement of third party patents or other third party intellectual
property.

15.0
15.1

INSPECTION AND TESTING

In addition to any tests to be conducted by the Vendor under the Contract or
any applicable codes or standards, the Material(s) shall be subject to
inspection and/or testing by Inspector(s) (including Third Party Inspector(s)) at
any time prior to shipment and/or despatch and to final inspection within a
reasonable time after arrival at the Project Site. The Inspector(s) shall have
the right to carry out the inspection or testing, which will include inspection and
testing of the raw materials at manufacturers shop, at fabricators shop and at
the time of actual despatch before and/or after completion of packing.

15.2 In addition to testing and inspection by Inspectors, IOCL may nominate an

institutional agency like Boiler-Inspectorate for official testing of coded
equipment. The Vendor shall ensure that all procedures for preparation and
performance of tests prescribed by such institution shall be scrupulously
complied and observed.
15.3

Unless otherwise specified in the Contract, the inspection shall be carried out
as per the relevant standards/scope of inspection provided alongwith the
Tender Enquiry/Purchase Order. All charges for Third Party Inspectors shall be
borne by the Vendor and IOCL shall reimburse these charges at actual against
documentary proof of payment (limited to the amount indicated in the Contract
towards third party inspection,) unless such inspection has become infructuous
for any cause.

15

15.4

All manufacturers mill test certificates and analytical reports from material
laboratories in respect of
raw materials employed and components
incorporated shall have to be presented by the Vendor.

15.5

Before shipping or despatch, the Material(s) will have to be checked and

stamped by the Inspector(s) who may forbid the use and dispatch of any
equipment and/or Material(s) which during tests and inspection fail(s) to
comply with the specifications, codes and testing or other contractual
requirements applicable thereto, and the Vendor shall not tender such rejected
Material(s) for supply to IOCL nor shall incorporate the same in any Material(s)
to be tendered for supply to IOCL.

15.6 The Vendor will inform IOCL at least eight (8) days in advance of the exact
place, date and time of tendering the Material(s) for required inspection and
provide free access to the Inspector(s) during normal working hours at
Vendors or his/its sub-Suppliers works, and place at the disposal of the
Inspector(s) all useful means for undertaking the Inspection, checking the
results of tests performed, marking the Material(s), getting additional tests
conducted and final stamping of the Material(s).
15.7

All tests will be performed at the Vendors expense and if required by the
Inspector(s), shall be conducted in accordance with the Inspectors
instructions. The Vendor shall also bear the expense for the preparation and
rendering of tests required by the Boiler Inspectorate or other statutory testing
or certifying agencies/institutions.

15.8

Unless otherwise specified, all charges for the Inspection shall be borne by the
Vendor.

15.9 IOCL may, at its own expense, have its representative(s) witness any test or
inspection. In order to enable IOCLs representative(s) to witness the
tests/inspections, the Vendor shall notify IOCL at least 30 (thirty) days in
advance, of the schedule of all inspection hold points prior to the initiation of
equipment fabrication. IOCL shall be notified eight (8) calendar days in
advance of any changes in the schedule of inspection. IOCL will advise the
Vendor in advance whether it intends to have its representative(s) be present
at any of the inspections.
15.10 Even if the inspection and tests are fully carried out, the Vendor shall not be
absolved from its responsibilities to ensure that the Material(s), raw materials,
components and other inputs are supplied strictly to conform and comply with
all the requirements of the Contract at all stages, whether during manufacture
and fabrication, or at the time of Delivery as on arrival at site and after its
erection or start up or consumption, and during the defect liability period. The
inspections and tests are merely intended to prima facie satisfy IOCL that the
Material(s) and the parts and components comply with the requirements of the
Contract.
15.11 The Vendors responsibility shall also not be anywise reduced or discharged
because IOCL or IOCLs representative(s) or Inspector(s) shall have examined

16

or commented on the Vendors drawings or specifications or shall have

witnessed the tests or required any chemical or physical or other tests or shall
have stamped or approved or certified any Material(s).
15.12 Unless otherwise specifically permitted by the Contract, no Material(s) shall be
dispatched for delivery or delivered under the Contract without being stamped
or otherwise approved for delivery by the Inspector(s).
15.13 Notwithstanding approval by the Inspector(s), if on testing and/or inspection
after receipt of the Material(s) at Project Site, any Material(s) is/are found not
to be in strict conformity with the contractual requirements or specifications,
IOCL shall have the right to reject the same and hold the Vendor liable for nonperformance of the Contract. The provision of Clause 16.5 to 16.11 shall
mutatis mutandis apply to such rejected Materials.
16.

ACCEPTANCE OF MATERIALS & GUARANTEES

16.1

The Vendor acknowledges that notwithstanding the provision or approval of

any drawings, designs, specifications, source of supply or other data relative
thereto by IOCL and/or the testing of Material(s) in accordance with the
requirements of the Contract or any applicable code or specification and/or any
inspection of the input or Material(s) by the Inspector(s) or issue of an
Inspection Certificate relative thereto and/or any other act, matter or thing done
or required by IOCL to satisfy itself of the quality, quantity, sufficiency or
efficiency of the Material(s) prior to delivery thereof and/or the transfer of title
and/or risks in relation to the Material(s), shall not be deemed or understood to
constitute acceptance of the Material(s)
by IOCL nor shall IOCL be
understood to have accepted any Material(s) other than plant, machinery,
equipment and parts and components unless such Material(s) have been
received at the Project Site of IOCL and found to be acceptable as evidenced
by a Certificate of Acceptance issued by IOCL, and in case of plant,
machinery, equipment and parts and components, unless they have been
incorporated into the relative Project Unit and the said Unit has been tested
and the relative plant, machine, equipment, part or component has
successfully functioned without patent defect.

16.2

To this end, the Vendor guarantees that:

(i)

All materials used in the execution of the Contract and all Material(s)
used in performance thereof shall be in strict compliance and conformity
to the characteristics, requirements and specifications of the Contract
and suitable for the purpose for which such Material(s) are intended to
be used if such purpose has been disclosed or is/are suitable for use to
which such Material(s) are ordinarily put to use, if such purpose has not
been disclosed.

(ii)

In the case of machinery, plant or equipment with rated capacities,

outputs or other characteristics, that the machinery, plant or equipment
as the case may be, shall function to such capacities and/or outputs and
shall meet the other characteristics required in respect thereof.

17

16.3

The Vendor further undertakes to replace any Material(s) if found not to

conform to the guarantees aforesaid at any time during the defect liability
period applicable thereto. IOCL shall give written notice of the defect to the
Vendor and of the rejection of the defective Material(s).

16.4

If the defect can be rectified or repaired without diminishing the quality, utility,
efficiency or life of the Material(s) (of which IOCL shall be the sole judge),
instead of outright rejection of the Material(s) IOCL may at its discretion permit
the Vendor to rectify the defect(s) within a period to be specified by IOCL in
this behalf in the notice. Should the Vendor fail to take action satisfactory to
IOCL to rectify the defect(s) within the period specified, IOCL may at its option,
at the risk and cost of the Vendor in all respects, rectify or repair or cause to be
rectified or repaired the defect(s) either by itself or through any other source or
agency, or to reject the defective Material(s).

16.5

Should IOCL, notwithstanding the endeavour to do so, be unable to rectify or

repair or get rectified or repaired the defect(s) within a reasonable time, IOCL
may, notwithstanding such endeavour reject the defective Material(s).

16.6

The Vendor shall repair, rectify and/or replace, as the case may be, the
defective and rejected Material(s) without entitlement to any extra payment.
DDP INCOTERMS 2000 shall apply for such replacement parts or components
or Material(s) at Project Site with respect to imported parts or components or
materials.

16.7

The Vendor shall at its own risk and cost remove any rejected Material(s) from
the Project Site, and in case of plant, machinery, equipment, parts or
components which have been installed, cause the same to be dismantled and
removed from the Project Site subject to the Vendor in all cases prior to the
removal of the rejected Material(s) from the Project site:
(i)

furnishing a bank guarantee to IOCL from a Scheduled bank in India

(including an Indian branch of a foreign bank acceptable to IOCL) and in
a format set forth in Annexure E hereto for the value paid by IOCL on
the Material(s) rejected; and

(ii)

undertaking to replace the rejected Material(s) with other Material(s)

conforming to the Vendors guarantees aforesaid applicable thereto.

16.8

The Vendor shall not without the prior written consent of IOCL utilize any
rejected Material(s) in the re-supply.

16.9

The Defect Liability Period with respect to any Material(s) replaced, repaired
and/or rectified shall be reckoned from the date of such replacement, repair
and/or rectification as the case may be.

16.10 Should the Vendor fail to dismantle and/or remove any rejected Material(s)
from the Project Site within the time specified in the notice of rejection, IOCL
may without prejudice to any other right or remedy, at the risk and cost of the

18

Vendor cause the rejected Material(s) to be dismantled and sold by public

auction or private treaty as it deems fit and hold or adjust the sale proceeds for
the recovery of the cost of dismantling, sale and removal of the rejected
Material(s) and any amount paid by IOCL towards the price of the rejected
Material(s). In so doing, IOCL shall not act as a trustee or constructive trustee
of the Vendor and shall be entitled to act solely on the basis of its best
judgment without being accountable or liable to the Vendor in any manner
except for the proceeds of the sale.

16.11 The time taken for the repair, rectification or replacement of Material(s) will not
be added to the stipulated Delivery date for the purpose of calculating price
discount, and delivery of such Material(s) shall be the date of Delivery of the
repaired, rectified or replaced Material(s).
16.12 As security for the due performance of its obligations and the due discharge of
its liabilities under the Contract, the Vendor shall within 15 (fifteen) days of the
issue of the Purchase Order furnish to IOCL a Bank Guarantee issued by a
Scheduled Bank in India acceptable to IOCL, in the format set forth hereto and
marked Annexure C hereinbefore. The Bank guarantee shall remain in
force for the entire period required for the performance of the contract and the
defect liability period plus a 3 (three) months claim period thereafter. Any
shortfall in the value of the Bank Guarantee, as a result of encashment by
IOCL either in full or in part, shall be made good by the Vendor within 7
(seven) days of notice by IOCL to the Vendor in this behalf. Any failure by the
Vendor to furnish the Bank Guarantee or to enhance the Value of the Bank
guarantee as stated above shall constitute a default by the Vendor for which
IOCL shall, without prejudice to any other right or remedy available to it, be
entitled to terminate the Contract with consequences as indicated in clause
12.4, the provisions whereof shall mutatis mutandis apply.

17.

FREIGHT, TAXES AND DUTIES

17.1

Subject to the provisions of Clause 17.2, hereunder, Excise duty and Sales
tax/VAT payable on the sale and delivery of Material(s) pursuant to the
Contract will be paid in the case of Sales tax and reimbursed in the case of
VAT and Excise duty at actual within the contractual delivery date. Any
increase in the rates of Excise Duty & VAT beyond the contractual completion
date or approved extended contractual completion date will be borne by IOCL
to the extent CENVATABLE documents passed on to IOCL and IOCL is in a
position to get the CENVAT claim from the authorities. However, the benefit of
any reduction must be passed on to IOCL

17.2 Taxes and duties payable or reimbursable by IOCL to the Vendor on the supply
of Indigenous Material(s) shall be included in and shown separately in the
Vendors invoice for the Material(s). However, the Vendor shall not be entitled
to claim payment from the bankers or IOCL of CENVATABLE or VATABLE
taxes or duties on which IOCL would be entitled to other credits (presently
Excise Duty, Value Added Tax (VAT) and Service Tax) without furnishing IOCL

19

the documents required for IOCL to avail of the full CENVAT / VAT or other tax
benefits available to IOCL against the payment of the tax. The Vendor shall
prior to despatch of the Material(s) obtain from IOCL a list of the documents
required by IOCL to enable it to avail of the relative benefits. Payment or
reimbursement of the CENVATABLE / VATABLE / other taxes and duties on
which credit is available to IOCL shall be made upon the Vendor furnishing the
relevant documents.
17.3

Freight and/or octroi and entry and/or terminal taxes, if any, payable or
reimbursable by IOCL shall be invoiced separately and shall be paid/reimbursed by IOCL after receipt of the Material(s) at the Project Site and
satisfactory proof of payment of the relative octroi, entry and/or terminal taxes,
as the case may be.

17.4

Freight, taxes and duties are not intended to operate as a profit centre but are
intended only to meet the relevant costs incurred on this account. If any
reimbursement or collection of the taxes or duties by the Vendor from IOCL is
in excess of the freight, taxes and/or duties actually paid by the Vendor, the
Vendor shall forthwith refund such excess to IOCL together with interest
thereon at 1% (one percent) per annum above the Prime Lending Rate of the
State Bank of India from the date of collection until the date of refund.

18.0

WEIGHTS AND MEASUREMENTS

18.1

The shipping documents, invoices, packing lists and all other relevant
documents shall contain the same units of weights and measurements as
given in the Contract Documents, in respect to the following data:
a. Unit net weight
b. Unit gross weight (including packing)
c. Dimensions of packing

18.2

All weights and measurements recorded by the Procurement Co-ordinator or

Inspector(s) on receipt of the Material(s) at the Project site will be treated as
final.

19.0

PACKING & MARKING

19.1

All Material(s) shall be suitably packed in weatherproof seaworthy/airworthy

packing for ocean/air transport under tropical conditions and/or for rail and
road or other appropriate transport within India. The Vendor shall ensure that
the packing is strong enough to ensure safety and preservation of the
Material(s) upto the Project Site or other point of final destination.

19.2

Material(s) shall be protected by a suitable coat of paint and all bright parts
shall be protected from rust by application of rust preventives as may be
necessary. All machinery surfaces shall be suitably protected.

19.3

For uniform Material(s) when packed in several cases/crates, progressive

serial numbers shall be indicated on each end. In case of bundles, the

20

shipping marks shall be embossed on metal or tag and wired securely on each
end.
19.4. A distinct colour splash in say red-black around each package/crate/bundle
shall be given for identification.
19.5

All nozzle holes and openings as also all delicate surfaces shall be carefully
protected against damage and bad weather. Flange faces of all nozzles shall
be protected by blanks. All manufactured surfaces shall be painted with rust
proof paint or as specified in the specification.

19.6

All threaded fittings shall be greased and provided with a plastic cap. All pipes
and sheets shall be marked with strips bearing progressive numbers.

19.7 All small pieces shall be packed in cases. All fragile and exposed parts will be
packed with care and packages will bear the words HANDLE WITH CARE in
English and in the case of Indigenous Supply, in Hindi also.
19.8

The Vendor shall be held liable for all damages or breakages to the Material(s)
due to defective or insufficient packing as well as for corrosion due to
insufficient greasing/protection.

19.9

On three sides of the packages, the Vendor shall affix or cause to be affixed
the following marks clearly visible in indelible paint
FROM:

VENDOR

TO:

INDIAN OIL CORPORATION LTD.

[Address] INDIA
PURCHASE ORDER NO.: [
] Rev. No.:[ ]
10 DIGIT ITEM CODE : [
]
EQUIPMENT NOMENCLATURE: [
]
NET WEIGHT: [
]kg/lb
GROSS WEIGHT: [ ]kg/lb
CASE NO.: [
]OF [
]TOTAL CASES
DIMENSIONS: [
] IMPORT LICENCE NO.[ ]

NOTE:Marking shall be bold with a minimum letter height of 5 cm.

19.10 a)

For every shipment, packages must be marked with serial progressive

numbering. The numbering will be progressively continued for each
subsequent shipment covering the Contract.

b)

All packages will bear warning signs on the outside denoting the center
of gravity and sling marks. Packages that require special handling and
transport shall have their centers of gravity and points at which they
may be gripped clearly indicated and marked Attention Special Load -

21

Handle With Care in English Language. Any other direction for

handling shall also be clearly indicated on the package.
c)

Top heavy containers will be marked either TOP HEAVY or HEAVY

ENDS.

d)

When packing is clean and light colored, a dark black stencil paint shall
be acceptable. However, where packing is soiled or dark, a coat of flat
Zinc white paint shall be applied and allowed to dry before applying the
specific marking(s).

e)

Colour codification shall be used to identify different items e.g, IBR,

NACE, Fire Safety Items etc.

19.11 In case of large equipments like vessels, heat exchangers etc., documents
contained in a waterproof envelope shall be fastened inside a shell connection
with an identifying arrow sign DOCUMENTS applied with indelible paint.

20.0. DESPATCH INSTRUCTIONS

For Indigenous Material(s)
20.1

Unless otherwise advised by IOCL or the Procurement Co-ordinator in writing,

Material(s) shall not be despatched without prior inspection and/or testing and
Release Order/Material(s) Acceptance Certificate issued by the Inspector(s).

20.2

The Vendor shall exercise due care to ensure that the consignment is booked
under appropriate railway classification, failing which any additional freight
incurred by IOCL due to the Vendor booking the Material(s) under a wrong
railway classification shall be borne by the Vendor.

20.3

The Material(s) shall be consigned in the name of the consignee viz.

Indian Oil Corporation Ltd.,
[Site address]

20.4

The Material(s) shall be transported only through bank approved transporters

by the most economical and expeditious mode of transport to the destination
as applicable for respective mode of despatches as follows :
(a)

By Rail in wagon load consignment to : [Name and address of Refinery /

Project to be specified]

(b)

By road transport to : [Name and address of Refinery / Project to be

specified]

IOCL and the Procurement Coordinator shall have the right to advise any
change in despatch point or destination and/or mode of transport in respect of
any Material(s). Any extra expenditure incurred by the Vendor on this account

22

supported by satisfactory documentary evidence, will be reimbursed to the

Vendor by IOCL.

23

21.0

SHIPMENT AND SHIPMENT NOTICES

21.1

Imported Material
The Vendor shall make shipment only after prior approval of the Inspector(s)
unless otherwise specifically authorized in writing by IOCL or the Procurement
Coordinator. As soon as any shipment is made, the Vendor shall send
advance information by way of FAX message [Fax No 022-26400774] to the
Dy. General Manager, Indian Oil Corporation Ltd.(Refinery Division), G-9, Ali
Yavar Jung Marg, Bandra (East) Mumbai- 400 051 for Mumbai consignments
and to the Dy. General Manager (Fax: 033-24145020) Indian Oil Corporation
Ltd.(Refinery Division), Indian Oil Bhavan (Refineries Division) Central Wing,
6th Floor, 2, Gariahat Road (South), Kolkata-700068 for Kolkatta consignments
(or other specified authority in respect of Material(s) consigned to other Ports),
giving particulars of the shipments, vessels name, port of shipment, Bill of
Lading number and date for ocean shipment and Airway Bill number & Date &
Flight details for air consignment, total FOB and freight value with confirmation
copy to IOCL, addressed to [designation and address]

21.2

Indigenous Material
Immediately after shipment, the Vendor shall inform despatch particulars to
IOCL/ Procurement Coordinator hereunder :
1 copy to Chief Materials Manager, [Address & Fax no]
1 copy to IOCL (Stores) addressed to [Designation, Address & Fax no.]

In the case of project orders, in addition to the above, a copy to the Chief
Projects Manager addressed to: [Address & Fax no.]
(PMC as per Purchase Order) addressed to: [Designation, Address & Fax no.]
22.0

MARINE AND TRANSIT RISK INSURANCE

22.1

Marine/Air and Transit Risk Insurance shall be covered by IOCL against its
Open General Policy.

22.2

The
Vendor
shall
send
IOCL
information
of
the
proposed
shipment/consignment well in advance by telegram/fax/e-mail/courier to
enable IOCL to take necessary action for the marine/air/transit insurance of the
shipment/consignment.

22.3

The Vendor shall advise the despatch particulars of the shipment/consignment

to the Insurance Company by fax / email under advice to the Procurement
Coordinator promptly after shipment to ensure that the consignment is fully
covered by insurance. Any failure by the Vendor to do so shall place the
consignment at the Vendors risk.

24

23.0

SHIPPING AND SHIPPING DOCUMENTS

23.1

For Imported Materials(s)

(a)

The Vendor shall arrange with Vessel owner(s) or Forwarding Agent(s)

specified in the Contract Documents for proper storage of the Material(s) in a
manner so as to facilitate the handling and off-loading at the port of destination
and to avoid any over carriage on discharge. All shipment by ocean vessel
shall be under deck.

(b)

The Bill(s) of Lading/Airway Bill shall be made out in favor of Indian Oil
Corporation Ltd. [Refinery/Unit] or to the order of the L/C opening bank, and
the notify column should indicate [Designation] Indian Oil Corporation Ltd.
[Refinery Division], G-9, Ali Yavar Jung Marg, Bandra (East), Mumbai- 400061
for port of discharge Mumbai and to the Dy. General Manager, Indian Oil
Corporation Ltd., Indian Oil Bhavan (Refineries Divison) Central Wing, 6th
Floor, 2, Gariahat Road (South), Kolkata-700 068 for port of discharge Kolkatta
or other specified authority in respect of Material(s) consigned to other ports.

(c)

All columns in the body of the Bill of Lading/Airway Bill namely marks and
Numbers, material description, weight particulars, etc. should be completed
accurately and such statement should be uniform in all the shipping
documents. The freight particulars should mention the basis of freight
tonnage, heavy lift charges, if any, surcharge, discount, etc. clearly and
separately and the net total freight payable, shown at the bottom.

(d)

The Bill of Lading/Airway Bill shall be free of any liability of IOCL to the carrier
for demurrage.

(e)

The Bill of Lading/Airway Bill shall indicate the following:

Consignee

(f)

Indian Oil Corporation Limited

[Name of Refinery/Project]

All documents viz. Bill of Lading/Airway Bill, invoices, packing list, freight
memos, country of origin certificate, Third Party Inspection Release Certificate,
inspectors certificate, Export certificate (wherever applicable), test certificates,
drawings and catalogues should be in the English language.

(g) (i) In addition to the Bill of Lading/Airway Bill, which should be obtained in 3
(three) stamped originals plus as many copies as required, invoices, packing
lists, freight memos (if the freight particulars are not shown in the Bill of
Lading), country of origin certificate(s), Third Party Inspection Release
Certificate, inspectors certificate, Export certificate (wherever applicable) and
test/composition certificate, shall be made out against each shipment in as
many number of copies as are shown in Clause 23.3.
(ii) The Bill of Lading/Airway Bill, invoice and packing list must specifically show
uniformly, the marks and numbers, material description, contents case-wise,

25

country of origin, consignees name, port of destination and all other indicated
particulars. The invoice must show the unit rates and net total FOB price. The
invoice must cover also items packed separately and the value shown
accordingly.
(iii) The packing list must show, apart from other particulars, the actual contents in
each case, net and gross weights and dimensions and the total number of
packages.
(iv) All documents must be duly signed by an authorized representative of the
Vendor.
23.2

In case of FOB contracts:

(i)
Shipping Arrangements shall be made through nominated freight
forwarders (in the country of exit) as detailed in the Purchase Order and
freight will be accordingly paid by IOCL in Indian Rupees.
(ii)

23.3

The Vendor shall furnish to the respective nominated freight forwarder,

the full details of consignment such as outside dimensions, weights
(both gross and net), No. of packages, technical description and
drawings, name of the supplier, ports of loading etc. two weeks prior to
the proposed date of shipment to enable the concerned agency to
arrange the shipping space.

The Vendor shall obtain the shipping documents in required number of sets
including three original stamped copies of the Bill of Lading/Airway Bill
immediately after the shipment is made and airmail the shipping documents in
the manner stipulated hereunder to ensure that the documents so forwarded
are received at least one week before the vessels arrival. The Vendor shall
be fully responsible for any delay and/or demurrage in clearance of the
consignment at the port due to delay in forwarding the shipping documents. If
in terms of the Letter of Credit , the complete original set of documents are
required to be sent to IOCL through the bank, the distribution indicated below
will be confined to obtaining copies of documents only.
Documents

Bill of lading/Airway Bill

Invoice
Packing List
Certificate of Origin
Test/Composition Certificate
Third Party Inspection Release
Certificate
Drawing/Catalogue
Invoice of Third Party/Lloyds for
Inspection
Charges,
wherever
applicable.
Export Certificate (where applicable)

IOCL
(Office that issued the
PO)
3 (including 1 original)
2
2
2
2
1

IOCL
(Port
Office)
1
2
2
2
2
1

IOCL
(Project
Site)
1
1
1
1
1
1 (original)

1
2

1
1

1
1

26

24.0

INVOICING & NEGOTIATION OF DOCUMENTS

24.1

Indigenous Material(s)

(a)

Unless otherwise directed by IOCL, Invoices and other documents shall be

forwarded by the Vendor to IOCL as stipulated hereunder:
(i)

Original Invoice+1 copy of document as per Purchase Order to the

Chief Finance Manager, [Address, Fax No.]

(ii)

1 copy of Invoice with original documents as per Purchase Order to

Chief Materials Manager, [Address, Fax No.] along with technical
catalogues, Inspection certificate and Inspectors Release Note.

(b)

Where payment is to be released to the Vendor against despatch documents

through the bank, the Vendor shall forward two complete original sets of the
documents specified in clause 5.2(c) to the specified banker of IOCL with a
stipulation that the banker shall forward one set of the documents to IOCL with
LSC intimation and acceptance before retirement of the documents from the
Bank. One complete set of all of the abovementioned documents shall be sent
to the Chief Materials Manager [Address, Fax No.]. Documents will not be
retired by the bank failing strict compliance by the Vendor of the above
mentioned despatch requirements.

(c)

Where payment is to be released to the Vendor directly by IOCL, two sets of

all the documents mentioned in (b) above shall be submitted/forwarded directly
to the Chief Materials Manager [Address, Fax No.] and upon processing, the
payment shall be released through the Finance Department, by cheque.

25.0

TRANSFER OF TITLE AND RISK OF LOSS

25.1

For Indigenous Material(s):

The transfer of property and risk in Indigenous Material(s) shall be deemed to
take place as follows:
(a)

For delivery F.O.R. or F.O.T. despatch point: On handing over the

Material(s) to the carrier against receipt of clean Railway Receipt/Truck
or Lorry Receipt and such receipt having been handed over to IOCL.

(b)

For despatch F.O.R destination station : On removal of the Material(s)

by IOCL from the railway authorities at the destination station.

(c)

Equipment sent freight/carriage paid to the Project Site: On receipt of

the Material(s) by IOCL at the Project Site.

27

25.2

For Imported Material(s):

The transfer of property and risks in Imported Material(s) shall be deemed to
take place as follows:
(a)

For FOB / FCA deliveries: On handing over the Material(s) to the carrier
and issue of clean Bill of Lading/Airway Bill (except for freight to pay)
and its transmission to IOCL.

(b)

For CFR deliveries: On receipt of the Material(s) by IOCL from the

carrier at the destination port/airport.

26.0

TERMINATION

26.1

Without prejudice to IOCLs right to price adjustment by way of discount or

any other right or remedy available to IOCL, IOCL may terminate the Contract
or any part thereof by a written notice to the Vendor, if:
i)

The Vendor fails to comply with any material term of the Contract.

ii)

The Vendor informs IOCL of its inability to deliver the Material(s) or any
part thereof within the stipulated Delivery Period or such inability
otherwise becomes apparent.

iii)

The Vendor fails to deliver the Material(s) or any part thereof within the
stipulated Delivery Period and/or to replace/rectify any rejected or
defective Material(s) promptly.

iv)

The Vendor becomes bankrupt or goes into liquidation.

v)

The Vendor makes a general assignment for the benefit of creditors.

vi)

A receiver is appointed for any substantial property owned by the

Vendor.

vii)

The Vendor has misrepresented to IOCL, acting on which

misrepresentation IOCL has placed the Purchase Order on the Vendor.

26.2

Upon receipt of said termination notice, the Vendor shall discontinue the work
on the Contract so far as terminated, and matters connected therewith.

26.3

On termination of the Contract, without prejudice to any other right or remedy

available to IOCL under the contract, in the event of IOCL suffering any loss on
account of delayed delivery or non-delivery, IOCL reserves the right to claim
and recover damages from the Vendor in respect thereof.

26.4

Notwithstanding anything to the contrary herein contained, IOCL will be at

liberty to take independent administrative action to place the Vendor under

28

holiday list for delay or non-performance of its contractual obligations or any

of them.
27.0

RECOVERY OF SUMS DUE

Whenever there is any claim against the Vendor for payment of sums of
money arising out of or under the execution of the Purchase Order, IOCL may,
without prejudice to any other mode or source of recovery available, recover
the same from any sum(s) then due or which at any time thereafter may
become due to the Vendor under this or any other contract with IOCL and/or
by recourse to any bank guarantee available to IOCL for this purpose, and
should these sum(s) be not sufficient to cover the recoverable amount, the
Vendor shall pay IOCL on demand, the balance.

28.0

NON-WAIVER
Failure of IOCL/IOCLs representative(s) to insist upon adherence to any of the
terms or conditions incorporated in the Contract or failure or delay to exercise
any rights or remedies herein or by law accruing, or failure to promptly notify
the Vendor in the event of breach or the acceptance of or the payment for any
Material(s) hereunder or approval of any design or Material(s) shall not
release the Vendor and shall not be deemed a waiver of any right of IOCL to
insist upon the strict performance thereof or of any of its rights or remedies as
to any such Material(s) regardless of when the Material(s) are shipped,
received or accepted nor shall any purported oral modifications or revisions of
the Contract by IOCL or IOCLs representative(s) act as a waiver of the terms
hereof.

29.0

COMPLETE AGREEMENT
The Contract Document(s) including, technical documents, drawings and
specifications and other Annexures to the Contract documents constitute the
entire agreement between the Vendor and IOCL in relation to the Contract
arising out of the Purchase Order. Changes or amendments will be binding
only if the amendments/modification are agreed to in writing as an
amendment/variation to the relative Contract Document and signed by an
authorised representative of IOCL.

30.0
30.1

EXCLUSION OF THE GOVT. OF INDIAS LIABILITY

It is expressly understood and agreed that IOCL has entered into the Contract
solely on its own behalf and not on behalf of any other person or entity. In
particular, it is expressly understood and agreed that the Government of India
is not a party to the Contract and will have no liability, obligation or right
whatsoever under the Contract. It is expressly understood and agreed that
IOCL is an independent legal entity with power and authority to enter into the
Contract solely on its own behalf under the applicable laws of India. The
Vendor expressly agrees, acknowledges and undertakes and accepts that
IOCL is not an agent, representative or delegate of the Government of India
and that the Government of India is not and shall not be liable for any act,

29

omission, commission, breach or other wrong or liability arising out of the

Contract. The Vendor hereby expressly waives, releases and forgoes any and
all actions or claims, including cross claims, impleader claims or counter
claims, against the Government of India arising out of the Contract and
covenants not to sue the Government of India for any manner of claim, cause
of action or thing whatsoever arising out of or under the Contract.
31.0

TECHNICAL INFORMATION/CONFIDENTIALITY

31.1

Drawings, specifications and details shall at all times be the property of IOCL
and shall be returned by the Vendor to IOCL on demand. The Vendor shall
not make use of any document, drawing, specification, data or any other
information connected with the Contract, for any purpose at any time, save and
except in the implementation of the Contract.

31.2

The Vendor shall not disclose the technical information furnished or gained by
the Vendor under or by virtue of or as a result of the implementation of the
Contract and shall make all efforts to ensure that the technical information is
kept confidential.

32.0

MODE OF COMMUNICATION

32.1

It is understood that IOCL is a multifaceted and multi-locational organization

and that for any communication to receive attention it is a prerequisite that the
communication is properly addressed and that the subject of the
communication is properly identified. To this end, except where otherwise
provided, all communications, drawings, invoices, shipping notes, packages,
packing lists and other document connected with reference to the Contract
shall in the heading boldly set out the Purchase Order Number and date, and
shall be addressed to the following:
Chief Materials Manager
[Office issuing the Purchase
Order]

Phone

Fax

Chief Projects Manager

[Site address]

Phone

Fax

Dy. General Manager

IOCL [ concerned Port office]
(For imports)

Phone

Fax
[Concerned office address]

With copies to the following in case a Procurement Co-ordinator or Project

Management Consultant is involved:
(i)

Resident Construction Manager Phone

[Site address]

(ii)

Dy. General Manager (Inspection) of

ordinator/Project Management Consultant.

Fax

the

Procurement

Co-

30

33.0

PART ORDER/REPEAT ORDER

The Vendor hereby agrees to accept part order at unit prices without limitation
and also agrees in case of bulk consumables to accept repeat order(s) during
a period of 6 (six) months from the date of original Purchase Order at the same
unit price(s) and on the same terms and conditions.

34.0

ARBITRATION AND GOVERNING LAW

34.1

Arbitration: All disputes or differences which may arise out of or in connection

with or are incidental to the Agreement(s) including any dispute or difference
regarding the interpretation of the terms and conditions of any clause thereof
which cannot be amicably resolved between the parties may be referred to
Arbitration of a person selected by the Vendor out of a panel of three persons
nominated by the General Manager of the Unit or Project of Indian Oil
Corporation Ltd. to which the Contract relates. The Arbitration proceedings
shall be governed by and conducted in accordance with the Arbitration and
Conciliation Act, 1996. The venue of the arbitration shall be [] or New
Delhi, India.

34.2

Governing Law:The Agreement(s) shall be construed in accordance with and

governed by the laws of India. IOCL shall warrant that the terms and
conditions of the Purchase Order shall be valid under existing Indian laws.

35.0

JURISDICTION

35.1

Notwithstanding any other Court or Courts having jurisdiction to decide the

disputed issue, and without prejudice to the provisions or generality of the
Arbitration clause, jurisdiction to decide the question(s) arising out of or relative
to the Contract in all matters touching or affecting any arbitration, or arising out
of or in relation to or under or in accordance with the Arbitration and
Conciliation Act, 1996 or otherwise under or with reference to the Contract
shall vest exclusively in the court(s) of competent civil jurisdiction at ________
[where the contract(s)/Purchase Order shall be signed on behalf of IOCL] or at
New Delhi and only the said Court(s) shall have the jurisdiction to entertain
and try any such actions and/or proceedings to the exclusion of all other
Courts, provided that nothing herein stated shall be deemed to anywise
authorize any party to seek resolution of any dispute(s) otherwise than the
recourse to arbitration in accordance with the provisions of the Arbitration
clause herein.
Provided always that an award rendered in any arbitration proceedings arising
out of or in relation to the Contract may be enforced or executed in any other
country or jurisdiction including without limitation a country in which any party
against whom the award is to be enforced or executed is located and a country
in which the assets of any such party are located.
****

31

Annexure - A
FORM OF BANK GUARANTEE IN LIEU OF EARNEST MONEY DEPOSIT
(On non-judicial stamp paper of appropriate value)
BG NO:___________________
DATED:__________________
VALID UPTO:_____________
To,
Indian Oil Corporation Limited
(Refineries Division)
[Address]
Dear Sirs,
In consideration of the Indian Oil Corporation Ltd. [Address] , (hereinafter
called the Corporation, which expression shall include its successors and assigns)
having
agreed
interalia
to
consider
the
tender
of_________(Name)_________________,
(Constitution)
_______________________________ (Address) ___________________________
(hereinafter referred to as the Tenderer which expression shall wherever the subject
or context so permits include its successors and assigns) for supply of materials to be
awarded under Tender No.___________________ upon the Tenderer furnishing an
undertaking from the Bank as hereinafter appearing in lieu of a Demand Draft or
Bankers Pay Order for the Earnest Money.
We __________________________(Name of Bank), a Bank constituted/Registered
under the________ Act, having our Head Office/Registered Office at [Address]
___________________(hereinafter called the Bank which expression shall include
its successors and assigns), at the request of the Tenderer and with the intent to bind
the Bank and its successors and assigns do hereby unconditionally and irrevocably
undertake to pay the Corporation at New Delhi forthwith on first demand without
protest or demur or proof or satisfaction or condition and without reference to the
Tenderer, all sums payable by the Tenderer as and by way of Earnest Money to the
Corporation, for an amount of Rs............ (Rupees_________________) only or US
Dollar _________ (United States Dollars_______________)
AND THE BANK DOTH HEREBY FURTHER AGREE AS FOLLOWS:
1.
The amount stated by the Corporation in any demand, claim or notice made or
given with reference to this Guarantee/Undertaking shall as between the Bank
and the Corporation for the purpose of this Guarantee/Undertaking be
conclusive of the amount payable by the Bank to the Corporation hereunder.
2.

This Guarantee/Undertaking shall not be determined or affected by the

liquidation or winding up or dissolution or change of constitution or insolvency
of the Tenderer or by any change in the legal constitution of the Bank or the
Corporation.

32

3.

Without prejudice to any other mode of service, a demand or claim or any

other communication may be made, given and/or transmitted by the
Corporation to the Bank either by post or by fax. If transmitted by fax, the
transmission shall be complete and shall be deemed to have been
acknowledged as soon as the OK facsimile transmission report for the fax
message has been received.

4.

Notwithstanding anything contained herein:

(i)

(ii)
(iii)

The Banks liability under this Guarantee/Undertaking shall not exceed

Rs./ US$ ___________ (Rupees / United States Dollars ___________
only).
This Guarantee/Undertaking shall remain in force upto (fill in date) and
any extension(s) thereof; and
The Bank shall be released and discharged from all liability under this
Guarantee/Undertaking unless a written claim or demand is issued to
the Bank on or before the midnight of ______ and if extended, the date
of expiry of the last extension of this Guarantee/Undertaking.

The Bank doth hereby declare that Shri______________________[designation] is

authorised to sign this Guarantee/Undertaking on behalf of the Bank and to bind the
Bank thereby.
This____ day of _______20___
Yours faithfully,
Signature:__________________________
Name & Designation:_________________
Name of the Branch:_________________

NOTES:
1.

2.
3.

The Bank Guarantee in lieu of Earnest Money Deposit shall be strictly as per
above proforma and shall be through a Scheduled Bank operating in India,
including the Indian Branch of a foreign bank recognized as a Scheduled bank
in India.
The Bank Guarantee shall be typed on stamp paper applicable to an
agreement in the State in which the Bank Guarantee is issued.
This Bank Guarantee shall be sent by the Bank directly to:- Chief Materials
Manager, IOCL (Refineries Division].

33

Annexure - B
[IRREVOCABLE LETTER OF CREDIT- FORMAT]

To:
This communication is to be considered as our credit instrument and is subject to the
Uniform Customs and Practice for Documentary Credit 1993 revision, I.C.C.
publication No. 500.
At the request of Indian Oil Corporation Ltd. (hereinafter called the Corporation
which expression shall include its successors and assignees) we hereby establish our
irrevocable Letter of Credit No. ______________dated ___________ in favour of :
(Beneficiary)
for a sum not exceeding (Currency in figures and words) which is payable at sight at
the counter of [Beneficiarys Bank] in [Address], covering the FOB/CIF/C&F port
supply of Material(s) and equipment under Purchase Order No.[
] for the
Unit/Refinery
of Indian Oil Corporation Ltd.. (IOCL).
This Letter of Credit shall be valid up till [Date]
TERMS OF PAYMENT
Payments under this Letter of Credit shall be made of ___ % of the value of the
Invoice(s) drawn by the Beneficiary on IOCL under the said Purchase Order against
presentation of the following documents:
Imported Materials:
(i)
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
(viii)
(ix)
(x)
(xi)

Invoice;
Clear Bill of Lading/Airway Bill covering the Materials(s) invoiced;
Packing list for the consignment;
Inspectors Certificate covering the invoiced Material(s);
Test/Composition Certificate;
Certificate of origin;
Drawing(s)/Catalogue(s) covering the Material(s);
Export Certificate, wherever applicable;
Invoice of Inspectors charges, wherever applicable;
Freight Memo(s) if the freight particulars are not shown in the Bill of
Lading/Airway Bill.
Copy of faxed intimation of the shipment to IOCL certified by the Beneficiary to
be a true copy of the faxed intimation of shipment to IOCL.

Indigenous Supply:

34

(i)
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
(viii)
(ix)
(x)
(xi)

Invoice
Clear Railway Receipt/Truck Receipt/Goods Receipt covering the Material(s)
invoiced;
Packing list for the consignment;
Third Party Inspectors Certificate covering the invoiced Material/Release Note;
Test/Composition Certificate;
IBR Certificate/CMRS Certificate;
Drawing(s)/Catalogue(s) covering the Material(s);
Guarantee/Warranty Certificate(s), wherever applicable;
Invoice of Inspectors charges, wherever applicable;
Freight Memo(s) if inland freight is not included in the Price and the RR/TR/GR
does not give the freight particulars.
Copy of faxed intimation of the shipment to IOCL certified by the Beneficiary to
be a true copy of the faxed intimation of shipment to IOCL.

SPECIAL INSTRUCTIONS
*
All Bank charges and commissions outside India shall be borne by the
Beneficiary.
*
Drawing permitted in not more than 3 (three) tranches.
*
Partial shipment is not permitted.
*
Trans-shipment not permitted.
*
Negotiating Bank to reimburse itself after giving 7 (seven) banking days notice
to the Issuing Bank from Issuing Banks account with _______ (Name of the
Issuing Banks correspondent in _____) at maturity under telex/cable advice to
the Issuing Bank indicating the amount claimed.
*
IOCL to be intimated the shipping details by fax immediately on shipment.
*
Documents to be dispatched to Issuing Bank by courier within 7 banking days
of receipt by Negotiating Bank.
*
Documents must be presented within _____ days after the date of
shipment/dispatch to ensure receipt thereof 7 days prior to the arrival of the
vessel.
****

35

Annexure -C
[ PROFORMA OF BANK GUARANTEE (PERFORMANCE) ]
(On non-judicial stamp paper of appropriate value)
To
Indian Oil Corporation Ltd.
[Address]
Dear Sirs,
In consideration of the Indian Oil Corporation Ltd. (hereinafter called the Corporation
which expression shall include its successors and assigns) having awarded to
[Name],
[Constitution]
________________________________
[Address]
___________________________ (hereinafter referred to as the Supplier which
expression shall wherever the subject or context so permits include its successors
and assigns) a Supply Contract in terms interalia, of the Corporation(s) Purchase
Order No. [
] dated ......... (hereinafter referred to as the Contract) upon
the condition of the Suppliers furnishing security in lieu of cash deposit for the
Performance of the Suppliers obligations and/or discharge of the Suppliers liabilities
under and/or in connection with the said Supply Contract upto a sum of Rs./US$ [
] [Rupees/United States Dollars _________________] only amounting to 10% (ten
percent) of the total contract value.
We _____________________ (name) a body corporate registered/constituted under
the laws of ____________ and having a branch at [Indian branch address]
(hereinafter called the Bank which expression shall include its successors and
assigns) with the intent to bind the Bank and its successors and assigns, hereby
undertake to pay the Corporation at [ place
] on first demand in writing without
protest or demur or proof or satisfaction or condition and without reference to the
Supplier, any and all amounts from time to time demanded by the Corporation from
the Bank with reference to this Guarantee/Undertaking upto an aggregate limit of
Rs./US$ [
] only or [Rupees / United States Dollars _________________].
AND THE BANK DOTH HEREBY FURTHER AGREE AS FOLLOWS:
1.

This Guarantee/Undertaking shall be in addition to any other guarantee or any

other security whatsoever that the Corporation may now or at any time
anywise have in relation to the Suppliers obligations and/or liabilities under
and/or in connection with the Contract and the Corporation shall have full
authority to take recourse to or reinforce this Guarantee/Undertaking in
preference to the other guarantee(s) or security(ies) at its discretion, and no
failure on the part of the Corporation in enforcing or requiring enforcement of
any other guarantee or security shall have the effect of releasing the Bank
from its full liability hereunder.

2.

The Corporation shall be at liberty without reference to the Bank and without
affecting the full liability of the Bank hereunder to take any other security in

36

respect of the Suppliers obligation(s) and/or liability(ies) under/or in

connection with the Contract and/or to vary the terms vis-a-vis the Supplier of
the Contract and/or to grant time and/or indulgence to the Supplier or to
reduce or to increase or otherwise vary the prices or the total contract value or
to release or to forebear from enforcement of all or any of the obligations of the
Supplier under the Contract and/or the remedies of the Corporation under any
other guarantee(s) or security(ies) now or hereafter held by the Corporation
and no such dealing(s), variation(s), reduction(s) or other indulgence(s) or
arrangement(s) with the Supplier or release or forebearance whatsoever shall
have the effect of releasing the Bank from its full liability to the Corporation
hereunder or of prejudicing the rights of the Corporation against the Bank.
3.

This Guarantee/Undertaking shall not be determined or affected by the

liquidation or winding up or dissolution or change of constitution or insolvency
of the Supplier or any change in the legal constitution of the Bank or of the
Corporation.

4.

The Bank hereby waives all rights at any time inconsistent with the terms of this
Guarantee/Undertaking and the obligations of the Bank in terms hereof shall
not be anywise affected or suspended by reasons of any dispute or disputes
having been raised by the Supplier (whether or not pending before any
Arbitrator, Officer, Tribunal or Court) or any denial of liability by the Supplier or
any other order or communication whatsoever by the Supplier stopping or
preventing or purporting to stop or prevent any payment by the Bank to the
Corporation in terms hereof.

5.

6.

Notwithstanding anything contained herein:

(a)

The Banks liability under this Guarantee/Undertaking shall not exceed

(currency in figures) . . . . . . . . . . . . . . . . (currency in words only
)....
....................;

(b)

This Guarantee/Undertaking shall remain in force upto ___________

(here put the entire period required for the performance of the Contract
and the defect liability period plus 3 (three) months) and any extension(s)
thereof; and

(c)

The Bank shall be released and discharged from all liability under this
Guarantee/Undertaking unless a written claim or demand is issued to
the Bank on or before the midnight of ________________ and if
extended, the date of expiry of the last extension of this
Guarantee/Undertaking.

The Bank doth hereby declare that Mr. _________________[name &

designation of the person authorised to sign on behalf of the Bank] is
authorised to sign this Guarantee/Undertaking on behalf of the Bank and to
bind the Bank thereby.
Yours faithfully,

37

(Signature)
NAME & DESIGNATION
NAME OF THE BANK
NOTES:
1.

2.
3.

The Performance Bank Guarantee shall be strictly as per above

proforma and shall be through a Scheduled Bank operating in India,
including the Indian Branch of a foreign bank recognized as a
Scheduled Bank in India.
The Bank Guarantee shall be typed on stamp paper applicable to an
agreement in the State in which the Bank Guarantee is issued.
This bank guarantee shall be sent by the bank directly to:Chief Materials Manager, IOCL (Address)

Annexure D
PROFORMA OF BANK GUARANTEE
(FULL VALUE OF FREE ISSUE MATERIALS)
(On non-judicial stamp paper
Of appropriate value)
To
Indian Oil Corporation Ltd.
[Address]

Dear Sirs,
In consideration of the Indian Oil Corporation Ltd. [address] (hereinafter called the
Corporation which expression shall include its successors and assigns) having
awarded to [Name],
(Constitution)
(Address) (hereinafter referred to as
the Supplier which expression shall wherever the subject or context so permits
include its successors and assigns) a Supply Contract in terms, interalia, of the
Corporation(s) Purchase Order No. [
] dated [
] (hereinafter referred to as
the Contract) and having agreed to provide certain free issue material(s) hereinafter
referred to as Free Issue Material to the Supplier for incorporation in the materials(s)
to be supplied under the Contract) upon the condition of the Suppliers furnishing
security in lieu of cash for the said Free Issue Material(s) upto a sum of Rs./US$
.............. (Rupees/ United States Dollars ____________ only] being the value of the
Free Issue Material(s):
We _____________________ [name] a body corporate registered/constituted under
the laws of [Country] and having a branch at [Indian branch address] (hereinafter
called the Bank which expression shall include its successors and assigns) with the
intent to bind the Bank and its successors and assigns, hereby undertake to pay the
Corporation at [place] on first demand in writing without protest or demur or proof or
satisfaction or condition, and without reference to the Supplier, any and all amounts
from time to time demanded by the Corporation from the Bank with reference to this

38

Guarantee/Undertaking upto an aggregate limit of Rs./US$

] (Rupees/ United States Dollars ____________ only]

AND THE BANK DOTH HEREBY FURTHER AGREE AS FOLLOWS:

1.

2.

This Guarantee/Undertaking shall be in addition to any other guarantee or any

other security whatsoever that the Corporation may now or at any time
anywise have in relation to the Suppliers obligations and/or liabilities under
and/or in connection with the Contract and/or the Free Issue Material and the
Corporation shall have full authority to take recourse to or enforce this
Guarantee/Undertaking in preference to the other guarantee(s) or security(ies)
at its discretion, and no failure on the part of the Corporation in enforcing or
requiring enforcement of any other guarantee or security shall have the effect
of releasing the Bank from its full liability hereunder.
The Corporation shall be at liberty without reference to the Bank and without
affecting the full liability of the Bank hereunder, to take any other security in
respect of the Suppliers obligation(s) and/or liability(ies) under or in
connection with the Contract or the Free Issue Material and to vary the terms
vis-a-vis the Supplier of the Contract or the Free Issue Material and/or to grant
time and/or indulgence to the Supplier and/or to reduce or to increase or
otherwise vary the prices or the total contract value or the value of the Free
Issue Material or to release or to forebear from enforcement of all or any of the
obligations of the Supplier under the Contract and/or the remedies of the
Corporation under any other guarantee(s) or security(ies) now or hereafter
held by the Corporation and no such dealing(s), variation(s), reduction(s) or
other indulgence(s) or arrangement(s) with the Supplier or release or
forebearance whatsoever shall have the effect of releasing the Bank from its
full liability to the Corporation hereunder or of prejudicing the rights of the
Corporation against the Bank.

3.

This Guarantee/Undertaking shall not be determined or affected by the

liquidation or winding up or dissolution or change of constitution or insolvency
of the Supplier or any change in the legal constitution of the Bank or of the
Corporation.

4.

The Bank hereby waives all rights at any time inconsistent with the terms of
this Guarantee/Undertaking and the obligations of the Bank in terms hereof
shall not be anywise affected or suspended by reasons of any dispute or
disputes having been raised by the Supplier (whether or not pending before
any Arbitrator, Officer, Tribunal or Court) or any denial of liability by the
Supplier or any other order or communication whatsoever by the Supplier
stopping or preventing or purporting to stop or prevent any payment by the
Bank to the Corporation in terms hereof.

5.

Notwithstanding anything contained herein:

(a)

The Banks liability under this Guarantee/Undertaking shall not exceed

[currency in figures]. . . . . . . . . . . . . . . . [currency in words] . . . . . . . . . . . .
. . . . . . . . . . . . only;

39

6.

(b)

This Guarantee/Undertaking shall remain in force upto the midnight of

(here put the scheduled date of delivery of the Free Issue Material + 3
months) and any extension thereof.

(c)

The Bank shall be released and discharged from all liability under this
Guarantee/Undertaking unless a written claim or demand is issued to the
Bank on or before [
] and if extended, the date of expiry of
the last extension of this Guarantee/Undertaking.

The Bank doth hereby declare that Mr. _________________(name &

designation of the person authorised to sign on behalf of the Bank) is
authorised to sign this Guarantee/Undertaking on behalf of the Bank and to
bind the Bank thereby.
Yours faithfully,

(Signature)

NAME & DESIGNATION

NAME OF THE BANK

NOTES:
1.

The Bank Guarantee shall be for the full value of the Free Issue Material(s) as
specified by IOCL and shall be strictly as per above proforma and shall be
through a Scheduled Bank operating in India, including the Indian Branch of a
foreign bank recognized as a Scheduled Bank in India.

2.

The Bank Guarantee shall be typed on stamp paper applicable to an

agreement in the State in which the Bank Guarantee is issued.

3.

This bank guarantee shall be sent by the Bank directly to:Chief Materials Manager, IOCL [Address].

**

40

Annexure E
PROFORMA OF BANK GUARANTEE
(FOR THE FULL VALUE OF REJECTED MATERIALS)
(On non-judicial stamp paper
Of appropriate value)
To
Indian Oil Corporation Ltd.
[Address]

Dear Sirs,
In consideration of the Indian Oil Corporation Ltd. (hereinafter called the Corporation
which expression shall include its successors and assigns) having awarded to
[Name],
(Constitution)
(Address) (hereinafter referred to as the
Supplier which expression shall wherever the subject or context so permits include
its successors and assigns) a Supply Contract in terms interalia, of the Corporation(s)
Purchase Order No. [
] dated [
] (hereinafter referred to as the Contract)
and having agreed to permit the Supplier to remove certain rejected material(s) for
which the Corporation has paid the Supplier (hereinafter referred to as the Rejected
Material(s)) upon the condition of the Supplier furnishing security for the satisfactory
replacement of the Rejected Material(s) upto a sum of Rs./US$ [
]
(Rupees
/
United States Dollars _____________ only) amounting to the full value of the
Rejected Material(s).
We _____________________ [name] a body corporate registered/constituted under
the laws of [Country] and having a branch at [Indian branch address] (hereinafter
called the Bank which expression shall include its successors and assigns) with the
intent to bind the Bank and its successors and assigns, hereby undertake to pay the
Corporation at [place] on first demand in writing without protest or demur or proof or
satisfaction or condition, and without reference to the Supplier, any and all amounts
from time to time demanded by the Corporation from the Bank with reference to this
Guarantee/Undertaking upto an aggregate limit of Rs./US$
[
]
[Rupees/United States Dollars
].

AND THE BANK DOTH HEREBY FURTHER AGREE AS FOLLOWS:

1.

This Guarantee/Undertaking shall be in addition to any other guarantee or any

other security whatsoever that the Corporation may now or at any time
anywise have in relation to the Suppliers obligations and/or liabilities under
and/or in connection with the Contract or the Rejected Material(s) and the
Corporation shall have full authority to take recourse to or reinforce this
Guarantee/Undertaking in preference to the other guarantee(s) or security(ies)
at its discretion, and no failure on the part of the Corporation in enforcing or

41

requiring enforcement of any other guarantee or security shall have the effect
of releasing the Bank from its full liability hereunder.
2.

The Corporation shall be at liberty without reference to the Bank and without
affecting the full liability of the Bank hereunder, to take any other security in
respect of the Suppliers obligation(s) and/or liability(ies) under or in
connection with the Contract and/or the Rejected Material(s) and to vary the
terms vis-a-vis the Supplier of the Contract or Rejected Material(s) and/or to
grant time and/or indulgence to the Supplier and/or to reduce or to increase or
otherwise vary the prices of the total contract value or the value of the
Rejected Material or to release or to forebear from enforcement of all or any of
the obligations of the Supplier under the Contract or otherwise in respect of the
Rejected Material and/or the remedies of the Corporation under any other
guarantee(s) or security(ies) now or hereafter held by the Corporation and no
such dealing(s), variation(s), reduction(s) or other indulgence(s) or
arrangement(s) with the Supplier or release or forebearance whatsoever shall
have the effect of releasing the Bank from its full liability to the Corporation
hereunder or of prejudicing rights of the Corporation against the Bank.

3..

This Guarantee/Undertaking shall not be determined or affected by the

liquidation or winding up or dissolution or change of constitution or insolvency
of the Supplier or any change in the legal constitution of the Bank or of the
Corporation.

4.

The Bank hereby waives all rights at any time inconsistent with the terms of
this Guarantee/Undertaking and the obligations of the Bank in terms hereof
shall not be anywise affected or suspended by reasons of any dispute or
disputes having been raised by the Supplier (whether or not pending before
any Arbitrator, Officer, Tribunal or Court) or any denial of liability by the
Supplier or any other order or communication whatsoever by the Supplier
stopping or preventing or purporting to stop or prevent any payment by the
Bank to the Corporation in terms hereof.

5.

Notwithstanding anything contained herein:

6.

(a)

The Banks liability under this Guarantee/Undertaking shall not exceed

[currency in figures]. . . . . . . . . . . . . . [currency in words only] . . . . . . . . .
.....

(b)

This Guarantee/Undertaking shall remain in force upto (put date fixed for
replacement of the Rejected Material + 3 months) and any extension(s)
thereof;) and

(c)

The Bank shall be released and discharged from all liability under this
Guarantee/Undertaking unless a written claim or demand is issued to the
Bank on or before [
] and if extended, the date of expiry of
the last extension of this Guarantee/Undertaking.

The Bank doth hereby declare that Mr. _________________(name &

designation of the person authorised to sign on behalf of the Bank) is

42

authorised to sign this Guarantee/Undertaking on behalf of the Bank and to

bind the Bank thereby.
Yours faithfully,

(Signature)

NAME & DESIGNATION

NAME OF THE BANK

NOTES:
1.

The Bank Guarantee for full value of Rejected Material(s) shall be strictly as
per above proforma and shall be through a Scheduled Bank operating in India,
including the Indian Branch of a foreign bank recognized as a Scheduled Bank
in India.

2.

The Bank Guarantee shall be typed on stamp paper applicable to an

agreement in the State in which the Bank Guarantee is issued.

3.

This bank guarantee shall be sent by the Bank directly to:Chief Materials Manager, IOCL [Address].

**

INDIAN OIL CORPORATION LIMITED

(Refineries Division)
INTER OFFICE MEMO
From

ED(PJ) HQ N Delhi

To

Our Ref

PJ/E&C/24

Your Ref

Date

25th Oct., 2002

Date

ED(PJ&ID)-Marketing Divn.,
Mumbai
ED(PJ) -PL-NOIDA
ED(RT) - R&D, Faridabad

Sub : Guidelines for Holiday Listing / Delisting of Vendors/Contractors

A Committee was constituted consisting of two officers from each Division i.e. Refinery,
Marketing, Pipelines & R&D to propose uniform guidelines for holiday listing/delisting
of vendors/contractors.
The recommendations made by the Committee have now been approved with certain
modifications. A booklet containing approved guidelines for Holiday Listing / Delisting
of Vendors / Contractors is enclosed herewith for necessary action in your Division.

Sd/(J K VERMA)
Executive Director (PJ)
Encl : A copy of guidelines
CC : ED(CF)
CC : ES TO DIR.(M) / ES TO DIR.(PL) / ES TO DIR.(R&D)
CC : ED/GM - P, J, M, H, B, G, AOD, PDRP - for necessary action please.

GUIDELINES
FOR
HOLIDAY LISTING / DELISTING
OF VENDORS / CONTRACTORS

OCTOBER, 2002

-1GUIDELINES FOR HOLIDAY LISTING/DE-LISTING OF VENDORS /

CONTRACTORS FOR PURCHASE / WORKS
1.

Black listing / Holiday listing / Banning / Removing from approved panel.

The meaning of "black listing", "holiday listing", "banning" and "removing from
approved panel" is legally one and the same. Hence hereafter the subject matter
shall be referred as "Holiday listing" only.

2.

Reasons for putting a Party ("Party" means Bidder / Licensor / Tenderer /

Consultant / Vendor / Contractor / Sub-vendor / Sub-contractor / Sub-consultant)
on Holiday.

2.1

The purpose of putting a party on holiday list is to protect the Corporation from
dealing with an undesirable party. Reason for putting a party on holiday list may
include any one or more of the following :
If a party
a)

has indulged in malpractices such as bribery, corruption, fraud and

pilferage.

b)

is bankrupt or is being dissolved or has resolved to be wound up or

proceedings for winding up or dissolution have been instituted.

c)

has submitted fake, false or forged documents / certificates.

d)

Has substituted materials in lieu of materials supplied by IOCL or has not

returned or has short returned or has unauthorisedly disposed off
materials/ documents / drawings / tools or plants or equipment supplied by
IOCL.

e)

Has obtained official company information or copies of documents, in

relation to the tender / contract, by questionable methods / means.

f)

Has deliberately violated and circumvented the provisions of labour

laws/regulations/rules, safety norms or other statutory requirements.

-2g)

has deliberately indulged in construction and erection of defective works

or supply of defective materials.

h)

has not cleared IOCL's previous dues.

i)

has committed Breach of Contract or has failed to perform a contract or

has abandoned the contract.

j)

has refused to accept Fax of Acceptance / Letter of Acceptance / Purchase

Order / Work Order after the same is issued by IOCL within the validity
period and as per agreed terms & conditions.

k)

after opening of Price Bid, on becoming L1, withdraws/ revises his bid
upwards within the validity period.

l)

has parted with, leaked or provided confidential / proprietary information

of IOCL given to the party only for his use (in discharge of his obligations
against an order) to any third party without prior consent of IOCL.

m)

any other ground for which, in the opinion of the Corporation makes it
undesirable to deal with the party.

2.2

If a communication is received from the Administrative Ministry of IOCL to ban

a party from dealing with IOCL, the party should be automatically put on Holiday
list.

2.3

The grounds / reasons for holiday listing indicated in para 2.1 above are merely
illustrative and are intended to provided a guideline for considering placing a
party on holiday list. It will be for the initiating department in each case to
evaluate whether the conduct of the party is such as it makes it undesirable for the
Corporation to deal further with the party and for the committee (refer clause 4
hereinafter) and approving authority (refer clause 6 hereinafter) to determine this
on reviewing all relevant factors.

Show Cause Notice

3.1

Before placing the party on holiday list, a fair opportunity of hearing the party
should be given by means of a Show Cause Notice. The Show Cause Notice
should be issued to the party before placing the party on holiday list.

3.2

A proforma of the Show Cause Notice is enclosed Attachment-1. A reasonable

time (of 15 days) for a reply to the show cause notice should be given. This time

-3may be extended at the request of the party, if so warranted, for a period not
exceeding 15 days.
3.3

This Show Cause Notice should be issued :

i.

For Works Contracts a) By Engineer-In-Charge, after order is accepted by

the Party.
b) By the Order Issuing Authority before acceptance
of the order by the Party.

ii.

For Purchase Contracts: By Purchase Order Issuing Authority.

3.3(a) The show cause notice should be issued with the approval of Order Approving
Authority not above the rank of GM.
3.4

The Show Cause Notice should be issued to the party and a copy may be endorsed
to its CEO ( Chairman / President / Managing Director / Proprietor / Managing
Partner etc.)

3.5

The decision to place the party on holiday list should be taken considering the
reply, if any, of the party.

4.

Formation of Committee

4.1

A three member Committee shall be formed to recommend action to the

Approving Authority. The Committee shall examine the reply of the party, if any,
to the Show Cause Notice. The Committee shall be constituted by the Approving
Authority as specified in para 6.1 below and will comprise of.
a)

For Refineries, Pipelines, R&D and Assam Oil Division: Representatives

from Execution / User Deptt., Finance Deptt. and Tendering Deptt.

b)

For Marketing Division : Representatives from Functional, Finance &

Legal Departments.

4.1.1

The Committee should not be formed consisting of junior level officer (A to C

grade), wherever possible.

4.2

The Member nominated from the Deptt. issuing the Show Cause Notice shall be
the Convener of the Committee.

4.3

In formulating its recommendation, the Committee shall take into account the
overall effect on the Corporation of placing a party on holiday list.

-45.

Duration of Holiday
The Committee at para 4.1 above should deliberate on duration for which the
party is to be put on holiday. Ordinarily, the period for which a party is place on
holiday should not exceed 3 years, However, in extra-ordinary circumstances, the
period may be more than 3 years & specific reasons for the same shall be
recorded.

6.

Approving Authority for putting a Party on Holiday

6.1

Unit head / Regional Head / State Head / Departmental Head, not below the rank
of GM, shall be the Approving Authority for putting a party on holiday where the
proposed holiday period does not exceed three years.

6.2

For placing a party on holiday for a period in excess of 3 years, Functional

Director concerned shall be the Approving Authority.

7.

Effect of putting a party on holiday list

7.1

No enquiry/bid/tender shall be issued to a party as long as the party's name

appears on the current holiday list (i.e. within the holiday period).

7.2

If a party is put on holiday list during tendering (of works / purchase):

7.2.1

If a party is put on holiday after issue of the enquiry/bid/tender but before opening
Technical bids, the bid submitted by the party shall be returned to the party.

7.2.2

If a party is put on holiday after opening technical bid but before opening the
price bid, the price bid of the party shall not be opened and BG/EMD submitted
by the party shall be returned to the party.

7.2.3

In case a party is put on holiday after opening of price bid, BG/EMD made by the
party shall be returned, the offer of the party shall be ignored & will not be further
evaluated. The party will not be considered for issue of order even if the party is
the lowest (L1). In such situation next lowest shall be considered as L1.

7.3

If a party is put on Holiday in one location and is doing job at other location, the
party should be allowed to complete such works which have already been
awarded.

-57.4

The holiday listing shall be party specific & when the party is put on holiday, all
the offices of the party shall be on holiday for all locations of IOCL & for all
Services / locations of the party. If the party placed on holiday, is a proprietary
concern, all the concerns of the same proprietor shall also be considered to be on
holiday and if that proprietor is the managing partner of any firm, such firm shall
also be considered to be on holiday. The Functional Director may however, if he
considers this to be in the interest of the Corporation, remove the bar in respect of
any specific service / location.

7.5

If an Original Equipment Manufacturer (OEM) is on Holiday list and if spars of

proprietary nature for the Equipment supplied by the OEM are essentially
required to be procured from the OEM, such requirements for spares can be met
from the OEM who is on holiday. In such cases, specific approval with
justifications shall be obtained from the level not below the rank of General
Manager.

7.6

Every Bidder shall, at the time of submission of bid, give a declaration that the
bidder has not been placed on holiday list by IOCL or its Administrative Ministry.
If the bidder is a Proprietary Concern, the Proprietor shall also give a declaration
at the time of submission of the bids that none of the other concerns of which he
is a Proprietor or Managing partner has been placed on holiday by IOCL or its
Administrative Ministry. In case the declaration of a party indicates that either
the Company or a Proprietorship Concern of the same Proprietor or a Partnership
firm in which the Proprietor is also a Managing partner has been placed on
Holiday either by IOCL or its Administrative Ministry, the party shall be
considered to be on holiday and further actions as per para 7.2.2 for two-bid
system & as per para 7.2.3 for single bid system shall be followed. A proforma of
the Declaration is attached as Attachment-II.

8.

Delisting (from Holiday list) procedure after expiry of the holiday period

8.1

Delisting (from Holiday list) after expiry of the holiday period should be
automatic and will not need further approval, unless any information towards
extension of holiday period is received. The party may be considered for issue of
enquiry / bid after the specified holiday period is over.

8.2

However, where Approved/Registered list of parties are followed, the party may,
after expiry of holiday period, approach relevant Tender / Enquiry Issuing
Authority, for getting itself re-listed.

9.

-6Review of holiday period (Delisting from holiday list within the holiday
period).
Review of holiday period (delisting from holiday list within the holiday period)
should be done in exceptional cases only. A Committee as per para 4.1 above
shall put up the proposal for such review. Approving Authority for such delisting should be one step higher than the authority who approved the holiday
listing of the party.

10.

Intimation of holiday listing/de-listing to the Party.

10.1

The party should be informed by the initiating Deptt. about their inclusion in
holiday list. A draft of the communication to be sent to the party is enclosed as
Attachment-III.

10.2

De-listing from holiday list after expiry of the specified holiday period need not
be communicated to the party.

10.3

If holiday period is reduced after review, the party should be informed

accordingly.

11.

Record of holiday listing and circulation of the same in IOCL.

11.1

Head of Contract Cell for Works Contracts & Head of Materials Dept for
Purchase Contracts at respective Divisional HQs shall be the Divisional Coordinators. Units / Areas / Regions should send the holiday information to all the
Units / Ares/ Regions of respective Division and to the Divisional Co-ordinators
of HQ of all the Divisions as soon as a Party is put on holiday. The Divisional
Co-ordinators in turn shall send written instructions to Corporate Office (IS) in
this regard as soon as they receive information from units / Areas/ Regions /
Divisions.

11.2

With the above information, a consolidated record should be maintained at head

quarters of each Division (by Contract Cell for work contracts and by Materials
Dept for purchase contracts) in a Register / Electronic Data Bank with column as
Sl. No., Name & Address of the Party, Holiday Period and Originating / initiating
Dept. with the reference vide which the party is put on holiday. This information
should be available in LAN wherever LAN facility is available.

11.3

The list should be updated and circulated by each Divisional Co-ordinator at HQ

(Head of Contract Cell for Work contracts and Head of Material Dept. for
Purchase contracts) or any other official who is assigned this work, to other Division Coordinators at respective HQ with a copy to Corporate Office (IS) on a quarterly

-7-

basis. The list can also be common for works and purchase if so desired. Names
of the parties should appear in alphabetical order. The names of the parties
whose holiday period is over shall be dropped from the holiday list.
11.4

Parallely, record of holiday listed vendors / contractors will also be created &
updated in SAP by Corporate Office (IS) based on written instructions from
Divisional Co-ordinators.

12.

Intimation to Consultant
If IOCL retains a consultant whose scope includes lining up of agencies, the
consultant should be informed about the holiday listed parties.

13

PSU Company
Whether the party is Private Sector or a PSU Company, guidelines for holiday
listing and delisting shall be the same.

14

Disposal Tenders
The above guidelines shall also apply to parties for disposal tenders. In such
cases "Lowest Bidder (LI)" shall mean "Highest Bidder (HI)".
*******************

Attachment-1
(Proforma of Show Cause Notice)
BY REGD. POST/SPEED POST/COURIER
No. :

Date :

To
M/s ..

Attn. : Shri ..
Sub : Show Cause Notice
Ref : (Name of job)
Dear Sir,
You are hereby required to show cause in writing within 15 days from the date
hereof why you be not placed on the "holiday list" and be debarred from entering
into any contracts with Indian Oil Corporation Ltd / be not de-listed from the list
of approved Vendors/Contractors of Indian Oil Corporation Ltd., for the
following reasons :
(Give Reasons)
Your reply (if any) should be supported by all documents and documentary
evidence which you wish to rely in support of your reply.
Should you fail to reply to this Show Cause notice within the time and manner
aforesaid, it will be presumed that you have nothing to say, and we shall proceed
accordingly.
Your reply, if any, and the documents / documentary evidence given in support
shall be taken into consideration prior to arriving at a decision.
Yours faithfully,
For & On behalf of Indian Oil Corporation Ltd.

Attachement-II
PROFORMA OF DECLARATION OF BLACK LISTING / HOLIDAY
LISTING
In the case of a Proprietary Concern :
I hereby declare that neither I in the name of my Proprietary concern M/s
_________________ which is submitting the accompanying Bid/Tender nor any other
concern in which I am proprietor nor in any partnership firm in which I am involved as a
Managing partner have been placed on black list or holiday list declared by Indian oil
Corporation Ltd. or its Administrative Ministry, except as indicated below:
(Here give particulars of blacklisting or holiday listing, and in absence thereof state
"NIL").
In the case of a Partnership Firm:
We hereby declare that neither we, M/s _______________________, submitting the
accompanying Bid/Tender nor any partner involved in the management of the said firm
either in his individual capacity or as proprietor of any firm or concern have or has been
placed on blacklist or holiday list declared by Indian Oil Corporation Ltd. or its
Administrative Ministry, except as indicated below:
(Here give particulars of blacklisting or holiday listing and in the absence thereof state
"NIL").
In the case of Company:
We hereby declare that we have not been placed on any holiday list or black list declared
by Indian Oil Corporation Ltd or its Administrative Ministry, except as indicated below:
(Here give particulars of black listing or holiday listing and in the absence thereof state
"NIL")
It is understood that if this declaration is found to be false in any particular, Indian Oil
Corporation Ltd or its Administrative Ministry, shall have the right to reject my/our bid,
and if the bid has resulted in a contract, the contract is liable to be terminated.

Signature of Bidder ______________

Name of Signatory ______________
Place ;
Date :

Attachment - III
(Proforma of Intimation of placement of a party on Holiday list)
No.

Date :

To
M/s ___________________
___________________
___________________
___________________
Attn. Shri ____________________
Sub : Holiday Listing/De-listing of Vendors / Contractors - Intimation of
Placement on Holiday List
Dear Sir,
This is further to our Show Cause Notice to you dated ____________________
In spite of the opportunity given to you, you have failed to show cause as required * /
Your reply to the Show Cause Notice*(and the documents and documentary evidence
submitted in support of your reply) has / have been duly considered.
After considering the allegations made in the Show case Notice/Your reply to the Show
Cause Notice *(and documents and documentary evidence furnished in support thereof),
it has been decided that you be placed on Holiday List and * debarred from entering into
any contracts with Indian Oil Corporation Ltd./ *be removed from the list of approved
Vendors / Contractors for a period of ______years effective from the date hereof..

Yours faithfully,

*Strike out if not applicable.

ANNEXURE 5

INDIAN OIL CORPORATION LIMITED

(REFINERIES DIVISION)
TENDERER OPENING STATEMENT /RECORD
(for other than e-tenders)

1. Description of Item:

_____________________________________________________

2. RFQ / Tender Reference:

______________________________________________________

3. Due Date of Opening of the Tender

_____/______/______

4. Date & Time of Opening of the Tender

_____/______/______

__________________

5. Details :
Sr. No

RFQ sent to / Tender

document purchased /
downloaded by

Vendors responded
(Quoted / Regretted)

EMD Details

Signature of vendors
representative witnessing
tender opening.

NOTE: Only representative of parties who have submitted Tenders shall be allowed to be present.

Signature
(Materials Department Representative)

Signature
(Finance Representative)

ANNEXURE 6
Check list for forwarding proposals requiring approval of D (R) / Chairman / Committees
Reference : File No. : ______________________________________

Sl.
No.
1.

Description

2.

Justification for procurement

3.

Estimated cost

Brief Description of the proposal

Capital Budget (AF No. Board Agenda / DFR

Reference etc)
+ Copy of approval note with relevant
enclosures.
Revenue Budget (Reference of approvals/
Cost centre).
Basis of estimate with break-up papers.
(Please enclose relevant papers)
Completion schedule as per the budget
approval.
Approved cost with break-up of foreign
exchange component.
4.

Pre-qualification criteria :
Brief details, whether mentioned in the tender
conditions.

5.

Approval of competent authority for waival of press

tender
(Waival applicable may be indicated)

6.

Nature of tender enquiry:

Press/Limited Tender (Approval for EMD waival,
if required)

Single tender Proprietary Justification

Comments

Ref.
Page

Sl.
No.
7.

Description
Details of tendering :

Tender Issue date

Indent/NIT (enclosed)

Whether clause for splitting orders was provided

in tender document as per CVC guidelines?

Number of parties addressed to (limited tender)

and approving authority for shortlisting the
vendors.
Number of parties requested for tender
document.
Number of parties to whom tender documents
were sold (Any party denied).

Any special conditions leading to dis-qualification

other than normal condition.

Number of parties responded/ quoted.

Date of opening (unpriced bid)

Number of regret letters.

If any late tender has been considered? Whether

approval of GM/ED has been obtained for the
same?
Whether requisite EMD received from all
tenderers.
Involvement of Indian Agent etc.

Price preference to PSUs as per guidelines

Efficacy loading, Loading for deviations

8.

Technical evaluation :

Basis of evaluation

Pre-price bid discussion, if any.

Comments

Ref.
Page

Any change in specification/scope of work after

pre bid discussion

Whether revised bid sought, if so, reasons.

Sl.
No.

Description

Comments

In case quotation from Indian vendor includes

CIF components
FOB/CIF value in foreign exchange and base
exchange rate to be indicated
If foreign exchange variation to be given to
vendor, whether ceiling has been fixed?
(Loading factor to be given in the tender itself).
Indicate the period allowed for FE/ CD
variation (3/4 of CDD)

Please confirm whether foreign exchange

variation given to vendor is applicable to
consequential CD/CVD/others or not .

9.

In case of interest free advance, whether interest

will be charged after contractual delivery period/
completion period.

10.

Details of loading basis, if any.

11.

Number of technically acceptable bidders.

12.

Number of rejected bidders, reasons for rejection.

13.

Acceptance of GPC/ATC/GCC terms. Any deviation

to be recorded and justification for acceptance of
deviation.

14.

Opening of price bid

Date of opening

Signature of Finance and Materials member on

all bids (including single tender).

Comparative evaluation of prices, checked and

signed by Finance & Materials.

Whether price bid of any rejected vendor was

opened, if so, justification?

Ref.
Page

Sl.
No.
15.

Description
Price reasonability : (Basis)
Last purchase reference.
Similar procurement made by other units.
Comparison with the estimated cost
for AF/
DFR for Projects & PMC cost estimate
Any other basis (such as foreign exchange
fluctuation, escalation factor etc.)

16.

Price Negotiation :
Justification/approvals
Date and details of negotiation

Results

17.

Whether the recommended party is put on Holiday

list by unit, other units/divisions etc.?

18.

Summary of proposal

Validity

Interest of IOCL officials/ Directors.

Order Value

Total Landed cost (separate cost sheet with

break-up of component of price to be made,
duly checked by Finance).
Total landed cost, Net on CENVAT.

Approving authority, indicating DOA reference

para.
A copy of draft Board Agenda to be attached
Any excess in foreign exchange component
(wherever applicable)

Comments

Ref.
Page

Sl.
No.
19.

Description
Statutory levies
All taxes, duties etc. to be clarified, whether works
contract taxes is payable.

20.

Agency commission, if applicable, DGS&D

compliance.

21.

Budget provision :

Approved cost

Commitment made/ anticipated upto date

Commitment including the current proposal.

22.

Approved schedule of completion.

Terms & Conditions :

Price firm or variable.

(Variable price formula to be specified)

Payment terms

Advance payment (clean/ against BG)

Delivery period

CENVAT : Necessary documents for availing

CENVAT credit should be furnished by the
vendor, failing which the amount will be
recovered from the vendor.

Statutory levies

Any other variation payable, if so, by whom?

PBG

Inspection clause

Training (whether approved originally).

Comments

Ref.
Page

Sl.
No.
23.

Description

Comments

Ref.
Page

Major deviation/significant observation :

On terms & conditions

Eligibility conditions

Evaluation system

Other special conditions

Time/cost over-run on approved cost/delivery

schedule
24.

Remarks, if any:

Note : 1. Documents/Attachments should be sent with legible copies

2. For approval of Dir (R)/ Chairman, proposal file should be sent well in advance (min.
required validity is 30 days form the date of receipt of file at HQ.)
(min. required validity is
3. For approval of BOD, proposal should be sent well in advance
45 days from the date of receipt of file at HQ.)

Signature

: __________________________

Name

: __________________________

Designation

: __________________________

Refineries (HQ/ Unit)

: __________________________

Annexure 7 a

Standard Format for processing proposals for Price Bid Opening

INDIAN OIL CORPORATION LTD
Refinery:
Date:
Members Present: (to be mentioned in case of Tender Committee cases)
1. [Name & Designation of Purchase rep]
2. [Name & Designation of Indenting / User rep]
3. [Name & Designation of Finance rep]
Price Bid Opening Proposal
1

Description of Material (in brief)

2 a)

Indent Reference & approval

[Ref : Flag 2 a)]

2 b)

Tender / RFQ No

Approved Estimated Cost:

[Ref : Flag 3]

4 a)

Delivery / Completion Period as per RFQ

i) Supply
ii) Site Work

4 b)

Delivery / Completion Period as per

bidder(s)
i) Supply
ii) Site Work

[Ref : Flag 4 a)]

Whether Revenue / Capital Expenditure

In case of Capital, indicate AF / PJ No,

and name of job / Project
6
Tendering details
6(a) Mode of tendering: Single / Two bid
6(b) Type of tender:
i) Single Tender (Proprietary/ Non
Proprietary):
Justification &
approval
ii) Limited Tender: Vendor approval
including waiver of press tender
iii) Open Tender: Pre Qualification
criteria Considered.

[Ref: Flag-4 b)]

In case of Open Tender Pre Qualification Criteria are considered as below:As per Tender
Response
of
bidder(s)
against
Qualification criteria:
a) Technical pre-qualification criteria

b) Commercial pre-qualification
criteria
i) Experience Criteria

ii) Financial Criteria

6(c)

Tenders sold/No. of parties to whom enquiry

sent

6(d) Time allowed for submission of Tenders:

i) Open Tender: from the date of opening of
sale of tender documents
ii) Limited Tender: from the date of
issuance of enquiry
6(e)

Pre

a) Technical pre-qualification criteria

b) Commercial pre-qualification criteria

i) Experience Criteria

ii) Financial Criteria

[Ref: Flag-6(b)]
[Ref: Flag-6(c)]

[Ref: Flag-6(d)]

Extension granted, if any

6(f)

Scheduled date and time of the receipt of

tenders
6(g) Actual Date of opening of tenders (un-priced
part/Single bid)
6(h) No. of offers received up to the scheduled
date and time of submission of tenders.
6(i)

No. of late tender received / No. of parties

regretted / not responded

6(j) If any such late tender has been considered,

whether the approval of GM has been
obtained
6(k) Whether requisite EMD has been submitted
by all tenderers
Whether tenderers were allowed to be present
at the time for opening thereof
6(m) Names of techno-commercially acceptable
offers
6(n) Details of offers / items rejected on
technical/commercial grounds and reasons
thereof

[Ref: Flag-6(h)
[Ref: Flag-6(i)

[Ref: Flag-6(j)
[Ref: Flag-6(k)]

6(l)

[Ref: NSP-]
[Ref: NSP-.]

6(o) Whether any of the pre qualified party is on

holiday list. If yes, give details.
6(p) Whether PSU or JV company participating in
the tender. If Yes, give details
6(q) Details of pre price bid meeting held or its
waiver: For procurement more than Rs. 5
crore
6(r) Whether Integrity Agreement (Applicable in
case of 10 Crore & above) has been signed.
6(s) Offer Validity:
6(t) Vendor wise Commercial Deviations (if
any)
6.(u) Whether approval has been obtained for
procurement on single offer basis
6 (v) Any other relevant information
Proposal:

[Ref: NSP-.]

In view of the above, it is proposed to approve the commercial deviations mentioned at 6 (t) above and
open the priced bid of the following ****** bidders through e-tendering portal:
1. M/s **************** (Original bid + price implication, if any)
2. M/s **************** (Original bid + price implication, if any)
3. M/s **************** (Original bid + price implication, if any)
..

The CBA sheet is placed in file at Flag-.

Approving authority: **************************************

Submitted for approval please.

(modify suitably in case of non TC recommendation)
______________
Name & Designation
Indentor Deptt.

______
Name & Designation
Finance

"F" - proposal concurred in for the approval of

Approving Authority

___________
Name & Designation
Material

Annexure 7 b

Standard Format for processing proposals for award of Purchase

INDIAN OIL CORPORATION LTD
Refinery:
Date:
Members Present: (to be mentioned in case of Tender Committee cases)
1. [Name & Designation of Purchase rep]
2. [Name & Designation of Indenting / User rep]
3. [Name & Designation of Finance rep]
Procurement Proposal
1

Description of Material (in brief)

2 a)

Indent Reference & approval

[Ref : Flag 2 a)]

2 b)

Tender / RFQ No

Approved Estimated Cost:

[Ref : Flag 3]

4 a)

Delivery / Completion Period as per RFQ

i) Supply
ii) Site Work

4 b)

Delivery / Completion Period as per

bidder(s)
i) Supply
ii) Site Work

[Ref : Flag 4 a)]

Whether Revenue / Capital Expenditure

In case of Capital, indicate AF / PJ No,

and name of job / Project
6
Tendering details
6(a) Mode of tendering: Single / Two bid
6(b) Type of tender:
i) Single Tender (Proprietary/ Non
Proprietary):
Justification &
approval
ii) Limited Tender: Vendor approval
including waiver of press tender
iii) Open Tender: Pre Qualification
criteria Considered.

[Ref: Flag-4 b)]

In case of Open Tender Pre Qualification Criteria are considered as below:As per Tender
Response
of
bidder(s)
against
Qualification criteria:
a) Technical pre-qualification criteria

b) Commercial pre-qualification
criteria
i) Experience Criteria

ii) Financial Criteria

6(c)

Tenders sold/No. of parties to whom enquiry

sent

6(d) Time allowed for submission of Tenders:

i) Open Tender: from the date of opening of
sale of tender documents
ii) Limited Tender: from the date of
issuance of enquiry
6(e)

Pre

a) Technical pre-qualification criteria

b) Commercial pre-qualification criteria

i) Experience Criteria

ii) Financial Criteria

[Ref: Flag-6(b)]
[Ref: Flag-6(c)]

[Ref: Flag-6(d)]

Extension granted, if any

6(f)

Scheduled date and time of the receipt of

tenders
6(g) Actual Date of opening of tenders (un-priced
part/Single bid)
6(h) No. of offers received up to the scheduled
date and time of submission of tenders.
6(i)

No. of late tender received / No. of parties

regretted / not responded

6(j) If any such late tender has been considered,

whether the approval of GM has been
obtained
6(k) Whether requisite EMD has been submitted
by all tenderers
Whether tenderers were allowed to be present
at the time for opening thereof
6(m) Names of techno-commercially acceptable
offers
6(n) Details of offers / items rejected on
technical/commercial grounds and reasons
thereof

[Ref: Flag-6(h)
[Ref: Flag-6(i)

[Ref: Flag-6(j)
[Ref: Flag-6(k)]

6(l)

[Ref: NSP-]
[Ref: NSP-.]

6(o) Whether any of the pre qualified party is on

holiday list. If yes, give details.
6(p) Whether PSU or JV company participating in
the tender. If Yes, give details
6(q) Details of pre price bid meeting held or its
waiver: For procurement more than Rs. 5
crore
6(r) Date of opening of price bid in case of two
bid system of tendering
6(s) Whether Integrity Agreement (Applicable in
case of 10 Crore & above) has been signed.
6(t) Whether per diem charges quoted for
installation/ site services are reasonable? If
not, efforts made to reduce the same.
6(u) Whether approval has been obtained for
procurement on single offer basis
6.(v) Any other relevant point
7.
(a)

[Ref: NSP-.]

Summarized position of the competitive prices of the techno-commercially acceptable

offers (Detailed comparative statement duly checked by the Finance Department Placed in the
File at Flag 7a)
(In case of large number of items please refer annexure)

(b)

Recommendation of Consultant for cases where EPCM is involved:

(c)

Any negotiations held with the party(s) with approval of competent authority and if so,
give details:
[Ref: Flag-7(c)

8 (a) Tender / Non Tender Committee case

(b)

Proposal:
Vendors
Name

8(c)

No. of Line
Items / Tags
/ Description

Order Value
(INR)

Landed Cost
(INR Lac)

Basis

In case of Sole offer/Two offer/ Single

tender,
justification
for
price
reasonability.
[Ref: NSP-. & Flag- 8(c)]

8(d) In case offer of lowest party is less N.A.

than 20% of our estimate, indicate

workability of the rates

8(e ) In case award is recommended on
other than lowest basis, reason thereof
8(f) Details of advance payment, if any

8(g) Major terms and conditions & time of Major terms and conditions shall be as per Annexure-I
completion
[Ref: Flag
8(h) Major variation from GPC/SIB, if any
8(i) Recommendation regarding acceptance
of variation regarding GPC/SIB.
8(j) Compliance to CVC guidelines
8(k) Interest
of
Directors
in
the
recommended party, if any
8(l) Interest of tender committee members
in the recommended party, if any
8(m) Offer validity
8(n) Validity of EMD (if applicable)
[Ref: Flag-8 n
8(o) Whether the contract value is within
the approved cost (if not how it is
proposed to be met)
8(p) Approved cost of the scheme of project
(in case of Projects)
8(q) Cumulative
commitments
made
including the proposal under approval
(in case of Projects). To be filled by
F

Summary of Recommendation:
In view of the above, it is proposed to place order on following bidders for the supply of
******************** as per enquiry no *********** dtd. ******** for ******* as per the details
given below.
Order approval by: in accordance with DOP clause No.
Vendors
Name

No. of Line
Items / Tags
/ Description

Order Value
(INR)

Landed Cost
(INR Lac)

Basis

Submitted for approval please.

(modify suitably in case of non TC recommendation)
______________
Name & Designation
Indentor Deptt.

______
Name & Designation
Finance

"F" - proposal concurred in for the approval of

Approving Authority

___________
Name & Designation
Material

Annexure-9

INDIAN OIL CORPORATION LIMITED

(REFINERIES DIVISION)
(Complete address of the unit/location)

BY REGD. POST WITH ACKNOWLEDGEMENT DUE

No. ..

Date

The Branch Manager

..Bank,
..
.
Fax No. .
Sub:

Performance Bank Guarantee No.. dtd. ..for

Rs..

Dear Sir,
We refer to the aforesaid Bank Guarantee issued by you at the request of
M/s.(Vendor) towards EMD/Advance/Performance Guarantee/etc. The said
Bank Guarantee is expiring on ...
We have requested the vendor to get the above guarantee extended upto . In case the
bank guarantee is not extended by.(validity date), this may please be treated as
our demand on you to pay us the amount of Rsin terms of the Bank
Guarantee.
Kindly acknowledge receipt.
Yours faithfully, For and onbehalf of, Indianoil
Corporation Limited,
(Name of the officer)
Designation Fax &
Phone nos.
CC:

M/s With a request to get the cited Bank Guarantee extended upto

(Complete address of the vendor)

(Fax No. ...)
(e-mail id: .)

FAX OF ACCEPTANCE (FOA)

Date: ..

FAX OF ACCEPTANCE NUMBER:

Indian Oil Corporation Limited
Refineries Division
(Refinery Address..
..
Fax No: ..
e-mail:
Fax no. & e-mail
For
Kind Attention
Phone no.
Reference
Item description
RFQ / Tender Number
Project / Job Name
Items to be supplied
Order Value (Rs.)
Delivery basis
Other terms & conditions

M/s.

Reference to your offer refdtd and all

subsequent correspondences till date.

(in case of Capital Budget)

Items as per Annexure- II to this FOA

All other terms and conditions shall be as per as per

Annexure-I to this FOA

Our detailed Purchase Order follows. In the meantime please treat this FOA as our firm order
commitment & confirm per return e- mail / fax your acceptance of this FOA on our e-mail id:
.@indianoil.in and fax number .
For and on behalf of
Indian Oil Corporation Ltd.

[NAME]
[DESIGNATION]
M/s. ..
CC:

Annexure-I to FOA NO
TERMS AND CONDITIONS (sample: to be changed as per requirement)
Vendor: M/s.
Price basis
Packing &
Forwarding
Freight charges
Transit
Insurance
Excise Duty
CST Against
Form C
Delivery /
Completion
period
Price reduction
clause for
Delay (PRS)
in delivery
Payment
Supply:
Terms
Site Work:
Site Supervision:
Transportation:
Training:
The above payments shall be released by
Performance
Bank
Guarantee
Third Party
Inspection
Charges as per
tender scope
Other
inspection and
Documentation
Charges as per
tender scope
Defect liability
period
Repeat order
Tolerance
Limit
All other terms
& conditions

All other terms and conditions shall be as per Indian Oils General Purchase
conditions (GPC)

e
o'

10M
From

,,,

IndlanOn

To

ED (Operations)

------- -_._-.----.- .. .. _-------

Our Ref

TS/ChemlAug'13

Date

02 Aug 2013

-----

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---

TECHNICAL DEPARTMENT

REFINERIES HEAD QUARTERS

ED (HR) - RHO.
All Refinery Heads

- ' - - - - ' - f-----._-.---------

Your ref

-+---_._----------..-.

Date

Committee Report on chemical testing and sampling methods in Refineries

A committee was formed vide office order No. PIIRl363 dated 21 st Nov'12 to look into the existing
chemical sampling methods adopted & the chemical quality checks being carried out at refinery
units. The committee has submitted its report recommending various measures to be adopted for
sampling & adherence to the quality standards of chemicals.
The recommendations of the committee are examined at our end & the consolidated list of the
acceptabie recommendations Is enclosed for implementation at the Refineries.

,~\~\~

1\

'II

ED (Operalions)

CC: Dir (R) - for kind Information please.

- 'j"

....

.. _ -

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._-~---~_.

Chemical Sampling Committee Accepted Recommendations

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1

Commercial supplies of all chemicals to the Refinery are to be tested at

QC lab/ IOCl R&D/ Third Party lab for its compliance to the purchase Refineries (Materials, QC, TS,
specifications. Refineries to identify the parameter which will be tested for Indenting Dept)
each chemical.

2a

Purchase specification for acceptance of the chemicals should be part 0

RHQ CPC, Refineries (Materials, QC,
purchase orders. Tender to indicate the specifications and/or efficacy of
TS, Indenting Dept)
chemicals will be checked during use &penalties in case it does not meet.

2b

It is preferred that all the parameters mentioned in the purchase

specification are tested at QC lab. In the case where all the parameters in
the purchase specification cannot be tested, a predefined fonmat 0
Refineries (QC, TS)
testing of important parameters is to be developed for each chemical by
TS/ QC lab for the same. R&D and other refineries may be contacted for
finalization of the same if felt necessary by the TS/ QC lab.

3a

For chemicals supplied in stores in drum/ sack! bags, the sampling should
be done by lab personnel in presence of store representative and shall
be taken by lab personnel to lab for testing in sealed condition. 3
composite samples should be drawn. One sample should be tested in the Refineries (Materials, QC, Indenting
laboratory and one sample each to be retained by QC lab and store in dept)
sealed condition duly signed by Lab personnel & store personnel. The
samples to be retained till the quality or efficacy compliance is met as
certified by the indenting dept.

3b

For chemicals indented by Stores, the acceptance of the chemical are to

be declared by lab personnel after comparing with purchase specifications
with the test results. For items indented by TS/ other user dept, the Refineries (QC)
acceptance will be given by TS/User dept officer after comparing the test
results with purchase specifications

For bulk chemicals, composite samples are to be collected from each

Refineries (Materials, QC, Indenting
compartment and from top and bottom both. If the sample fails in test, the
Dept)
material shall be retumed back to the vendor for replacement

In case of any vendor submitting test results with alternative test methods,
clarification/ confinmation is to be taken from the vendor that it is an
equivalent test method to that mentioned in the tender specification. This
RHQ CPC, Refineries (Materials, TS,
clarification is to be done during the TQ stage before giving Technical
Indenting Dept)
recommendation. However, the acceptance of the' commercial supply will
be on the basis of the test method mentioned in the purchase
specification which will be done in Refinery QC lab.

..

..

--~.~.---

In case of samples failing in a test, the test may be repeated with the
retention sample. In case the test is passed, The material is to be
accepted & in case the test fails again, the material is to be returned to Refineries (Materials, QC)
the vendor. Vendor may be asked to replace the material within
reasonable time at his risk &costs.

If acceptable by the user department & depending on plant inventory, few

bulk chemicals (eg: Caustic, HCI etc) with slight variation of test results as
7 . compared to purchase specification may be accepted at reduced rates Refineries (Materials, Indenting Dept)
with due approval of competent authority. The formula for such reduced
rate shall be specified beforehand.

10

11

Plant performance evaluation tests as mentioned in the tender should be

Refineries (PN, TS)
carried in the unit for the chemicals (eg: Corrosion Inhibitor, Demulsifier,
PPD etc) which are purchased on the basis of performance parameters.
If testing of any chemical is not possible due to non availability of testing
equipment and testing frequency is very less, the same shall be carried
Refineries (QC)
out by sharing of lab facility with equipment procurement by anyone or
two units on sharing basis.
For chemicals (MFA & Lubricity Additive) where the Purchase Order is
placed on the basis of a 'Mutually Agreed Purchase Specification (MAPS)'
RHQCPC
derived aller the R&D tests, the MAPS should be uploaded in SAP along
with the PO.
If any chemical is stock transferred from one refinery to another refinery,
the mandatory laboratory tests are to be carried out again by the receiving Refineries (Materials, QC)
refinery.

Chemical supplied in drums! bag: Sample should be collected from the lot
supplied in one lot and shall not be from less than 10% of the lot. The
sample shall be made composite sample and should be tested. I
12 a
Refineries (Materials, QC)
composite sample fails then individual testing should be done from the
same drum! bag. The selection of the drum! bag should be done as
under: 5% by QC lab, 5% by stores
Chemical supplied in tanker! ISO tank: Sample should be collected from
each compartment of the truck from both top & bottom and shall be made
composite sample and should be tested. If composite sample fails then
Refineries (Materials, QC, Indenting
12 b whole truck to be rejected and sent back to the vendor for replacement.
Dept)
However, in case of plant emergencies and also of the chemical can be
used with lower efficacy, the same may be accepted at reduced rates with
due approval of competent authority as mentioned at S NO.7

13

14

Checklist of chemical handling prepared by Panipat Refinery should be

shared to all refinery locations and considering the comments of all the
Refineries
units, a common manual shall be prepared and to be followed by all
refinery units
It is to be ensured that the chemical test reports submitted by QC Lab
also contains the permissible value! limits as mentioned in the technical Refineries (QC)
specification.

15

It is to be ensured that refineries carry out periodic system audit and an

annual surprise check of the sampling procedures & quality check of each Refineries
incoming chemicals.

16

Stores to ensure that the bulk chemicals (Caustic, HCI & H2S04) are
supplied in the correct tankers bearing the correct chemical name & road
Refineries (Materials)
safety instructions. Any bulk chemical supplied in incorrect tankers is to
be rejected &retumed to the supplier.

Annexure 12
Procedure for taking & handing over project spares & leftover materials
(ref. Finance Circular F/12/035 dtd 15.07.10)

The Procedure & guidelines below have been segregated to the extent
possible for the different methodology of project execution as under:
1.
2.

LSTK Projects
Conventional Projects

1.0

LSTK Projects
Generally there are following three types of project leftover materials.

1.1

Category-1 : Scrap (off-cut, damaged, defective materials) like cut

pieces of pipes, sheets, structural less than their standard size of
supplies, cables less than 100 meters including empty cement bags &
drums etc. Materials like refractory paints, rubber-sheets, chemicals
etc. with expired shelf life will also be treated as scrap.
As adequate space is normally not available for scrap yard during the
project execution stage, the executing contractor may be allowed to
dispose of the scrap generated from time to time with the prior
approval of PMC/ Engineer-in-charge & the materials department of
IOCL.
Once the scrap quantity is finalized by the PMC/ Engineer-in-charge &
the materials department the same should be disposed of by the
contractor to the satisfaction of IOCL and the money received against
such disposal shall be passed on to IOCL.

1.2

Cagegory-2 : Mandatory Spares & items to be handed over as per

contract

1.2.1 A separate store/ warehouse should be made available for keeping

the workable leftover materials & mandatory spare parts. The
warehouse complex should be a part of utility packages so that their
construction starts well in time and procurement of racks, almirahs, etc
as well as installation of communication system, LAN etc. are included
in project package itself. The warehouse should be equipped with
racks almirahs & other accessories along with open yards having hard
surfacing, fencing for keeping bulk materials like pipe, pipe fittings,
valves, structurals, & cables etc. These facilities along with adequate
manpower should be made available well in advance, that is, at least
one year ahead of mechanical completion of the project.
1.2.2 PMC/ Engineer-in-charge to ensure that the PO placement for all
mandatory spare parts is done along with the PO placement of main
equipment and within 3 to 6 months of finalization of bulk materials like
piping, cables etc. as per the contract document. The PMC/Engineer1

in-charge shall review and approve the same within stipulated time
and on PRIORITY BASIS.
1.2.3 The list of mandatory spares ordered by LSTK contractor is to be
reviewed by PMC / IOCL on immediate basis and any addition /
deletion on the list of mandatory spares are to be intimated to the
LSTK contractor to ensure required action by them.
1.2.4 The contractors should start necessary activities for codification
immediately after placement of the Purchase Order for Mandatory
Spare Parts and Code-1 approval for the items progressively. The
contractor has to fill all the required details with 6 digit code as per
template supplied to them for codification purpose and forward to
IOCL for codification.
Based on above IOCL shall allocate 10 digit codes on receipt of filled
up templates with 6 digit codes.
1.3

The list of mandatory spares & other items as per contract to be

reviewed by concerned planning section of IOCL or as directed by the
engineer-in-charge for identifying the insurance items/ spares
according to M&I circular dtd. 12.12.05 before handing over, so that
capitalization is done according to accounts manual 2008.

1.4

Pricing of the mandatory spare parts: For items already codified

and available in the existing inventory, Moving Average Price (MAP) is
to be considered while uploading the stock in the inventory.
For the new items / spares, the price mentioned in the PO placed by
LSTK contractor is to be considered. Efforts should be made to enter
the realistic price into the SAP data base.
The differential value, if any, with contract value for mandatory spares
(after considering the cost of all mandatory spares as per contract), is
to be capitalized.
Technical Committee shall review the pricing done by LSTK bidders
and also review the same which shall be considered for valuation.
In case of LSTK projects, where book value of items has not been
provided by the contractor, the book value of similar items will be
considered adequate. If the rate of same size or schedule is not
available, the rate can be interpolated/extrapolated.

1.5

The LSTK contractor shall prepare the Material Handing Notes (MHN)
to be handed over as per contract (in MS-Excel) immediately on
receipt of Mandatory Spares by them as and when the same is
received. The MHN should contain the following details:

Serial Number
LSTKs identification number
2

IOCL Material Code

Materials description
Quantity
Unit of Measurement
Unit Rate of the item in Indian Currency
Part number (in case of spares)
Drawing number (in case of spares)
Suppliers name
Test certificate no.

1.6

The LSTK contractor shall hand over the above mentioned list to the
PMC and Engineer-in-charge for approval within a maximum
stipulated period of receipt of material progressively.

1.7

Mandatory Spares shall be taken over by IOCL on receipt of Approved

MHNs progressively. IOCL shall put the tag / paint on the items /
materials which are being taken over from the contractor for better
clarity.

1.8

Wherever possible, like in case of Spares for Pumps, Compressors,

etc., each item shall have metallic tags containing IOCL SAP codes,
brief description, reference PO for items. For items like plates, pipes,
fittings, flanges, etc., SAP Code and other relevant details to be
written on the item itself in white paint on black painted background.

1.9

The MHN after complete actions points as above and along with all
supporting documents viz. Test certificate/ guarantee/ warrantee
certificate etc are to be sent to stores at the time of handing over the
materials.

1.10

The contractor will bring & shift the materials as per MHN to IOCL
stores site as per direction of stores in-charge. The same shall be
transported by the contractor at their own cost. Stores shall verify the
quantity, match the identification Mark/ Heat no or any other
correlation mark on materials.

1.11

One copy of MHN duly received by stores will be handed over to the
contractor. Another copy of MHN will be sent to F and the LSTK
contractor may be allowed to claim the payment progressively as per
payment terms indicated in the contract.

1.12

In case LSTK contractor requires any mandatory spares during

commissioning, the same will be used with the prior permission of the
engineer-in-charge and the project co-coordinator on returnable basis.

1.13

In case contractor fails to return the material before releasing final bill,
recovery will be made from the final bill towards replacement cost of
the item + overhead charges @18% based on a Valid offer from the
OEM/Supplier to be obtained by IOCL/LSTK Contractor for
procurement of the same.
3

1.14

Category-3 : Workable, useful & serviceable materials (other than

mandatory spares and items to be handed over as per contract) - An
inventory shall be made by the contractor for the balance left over
items (including commissioning spares) which are in good & in
acceptable condition like equipment, spares, piping materials,
including Cables etc. The full details of items should be in MS Excel
sheet as detailed below:

Serial Number
IOCL Material code
Detail material description
Quantity
Unit of Measurement
Unit rate of item in Indian currency

1.14.1 The contractor at his own cost will transport & shift the same in a
manner as explained by the PMC/ EPCM/ engineer-in-charge to IOCL
refinery stores. The IOCL stores will accept these materials and
provide a separate covered space for storing these materials
immediately as per instructions of engineer-in-charge.
1.14.2 The pricing should be done as per para no. 1.4 above.
1.14.3 IOCL shall put metallic tag / paint on the items / materials as explained
in 1.8 above which are being taken over from the contractor for better
clarity.
2.0

Conventional Projects
The following guidelines are applicable for large conventional projects
also where:
i.
ii.

SAP code is already available in the SAP purchase order

Warehouse management is done by PMC / EPCM

In conventional projects, though inventory is in physical possession of

PMC/ EPCM yet its record of receipt, issue & balance is available with
IOCL in SAP as capital store. On completion of the project, left over
inventory is transferred to revenue store based on Material Handing
over Note (MHN) submitted by PMC/ EPCM.
For SCRAP Material, Category-1 procedures will be followed.