9789551953

1.2 OBJECTIVE S&P is committed to organize timely procurement of items at competitive rates in a transparent manner. The timely procurement rate is 80%. S&P is further committed for the accounting of the items procured and annual verification of Stores & Stock, in coordination with the concerned groups. The deviation rate of verification is 3%. 1.3 MAJOR PROCESSES The purchase / procurement activities include the following: Purchase of equipments / instruments, materials from indigenous source or by import. Turnkey projects like construction of ship, desalination plants etc., Fabrication and supply of equipments, tools and fixtures Manpower contract / works contract / service contracts Annual Maintenance Contract Purchase / printing of Stationery Rev No. 00 Prepared by Rev. Dt. 21.07.2010 Approved by Issued by

The major processes involved in the procurement & maintenance of various types of Stores & Stock are as under: Indent Needs Approval process Indent process Tender process Purchase process Post purchase process Materials Management Process Stock Verification process Disposal process The detailed descriptions of major processes are as follows: Indent Approval Process As soon as the need of an item is felt by the user group it is submitted for consideration by Indent Needs Review Committee (JINRC & INRC) thro S&P for consideration and recommending to Director for approval to process the indent. 1.3.1 INDENT PROCESS Indents are prepared for procurement of item or execution of work based on the requirement of the Groups. Indents are raised as per the format given in the Annexure3A. All purchase indents and all Work indents of Estate & Maintenance above 50,000/- are processed by Stores & Purchase section. CON SOLIDATED PRE PROCESS APPROVAL: In respect of all requirements costing more than ` 1,00,000/- and less than ` 4,00,000/-, consolidated proposals are to be submitted to Junior Indent Need Review Committee and proposals costing ` 4,00,000/- and more are to be consolidated and submitted to Indent Need Review Committee for consideration & approval. This Group Approval should be obtained before raising any indent costing more than ` 1,00,000/-. However on account of Rev No. 00 Prepared by Approved by Issued by Rev. Dt. 21.07.2010

Issue No. 02 QUALITY PROCEDURE Date 03.05.10 NATIONAL INSTITUTE OF OCEAN TECHNOLOGY Doc.No.N IOT/QP/S&P Page No. 4 of 28 urgency separate approval can be obtained on justifying the circumstances and need. The proposals approved by Director are to be continued for Indent process. These approvals for proposals are valid upto six months from the date of approval. Expired proposals if any are to be consolidated and revalidated with the approval of Director / INRC / JINRC. The Indents processes are three types, differentiated by monetary consideration. a) Indents costing upto Rs. 1,00,000/-: For indents costing upto ` 1,00,000/-, indents are to be raised by Indentor in the prescribed format (Annexure 3A) and approved by the Project Head for fund availability and procurement. The approximate cost of the item and the mode of the tender should be indicated by the proposer and recommended by the Group Head. In case of any deviation required, in the type of tender process, proper justification with approval to be enclosed. For Single tender, Justification with specific brand / Proprietary certificate need to be approved by the Director/Group Head as per delegation of power. Presently upto ` 1 lakhs, the same is approved thro Single Tender Approval Proforma (Annexure 3AG).attached. In case of limited tenders, the addresses of at least three potential vendors list need to be attached / included in the indent. In case of three potential vendors could not be identified, proper justification note approved by the competent authority need to be attached. After recommendation of the Group Head, the indent will be cleared by the Purchase officer for tendering procedure. b) Indents costing more than ` 1,00,000/- and upto ` 25.00 lakhs: For Indent valuing between ` 1,00,001/ and ` 25,00,000/-, Indent should be raised in the prescribed format and approved by Project Head for fund availability and procurement. The indentor should clearly mention the approximate cost and the mode of tendering. In case of Single Tender, proper justification with specific brand / proprietary certificate need to be attached as per Single Tender profroma (Annexure 3AG). In case of limited tenders, the addresses of at least three potential vendors need to be attached / included in the indent. In case of three potential vendors could not be identified, Rev No. 00 Prepared by Rev. Dt. 21.07.2010 Approved by Issued by

Issue No. 02 QUALITY PROCEDURE Date 03.05.10 NATIONAL INSTITUTE OF OCEAN TECHNOLOGY Doc.No.N IOT/QP/S&P Page No. 5 of 28 proper justification note need to be attached. After recommendation of the Group Head, the indent should cleared by Purchase Officer(S&P), Internal Auditor for tendering procedure. If Purchase Officer / IA find any deviation either in the mode of tendering or in any other criteria, the indent is sent back to the Group for further modification. The Purchase officer and IA will again view the modified indent for tendering procedure clearance. Now the completed Indent is ready for Tendering process. c) Indents costing more than ` 25.00 lakhs: Indentors should raise an indent with approval from the respective groups. Normally, for the above monetary limit open tender system is to be adopted. For this purpose, the specifications / scope would be drawn by the Indentor group and forwarded to S&P section along with the Indent. On receipt of the recommendations for the same from the Group Head, further processing as indicated in (b) above would be followed for approval of the indent. In cases of emergency or where the source of supply is definitely known and it could be stated for sure that there would be no additional response other than the known sources, thereby justifying that no useful purpose would be served by resorting to open tender, the requirement of `open tender may be waived by Director. For this purpose, a detailed note justifying the waiver should be submitted to Director for approval specifically mentioning the mode of tendering to be followed. Apart from this, indents are being raised for category of purchases described below as per the individual values which are as follows. All the Indent to be forwarded as per Annexure 3A. The time for sending enquiry is 3 working days from the date of receipt of completed Indent along with clear specification and other related documents. In case of discrepancy noted, the Indent is returned back to the groups for the required modification and return back. Format of indents are shown in Annexure-3A Flow chart for the above process is shown in Annexure-3D

Rev No. 00 Prepared by Rev. Dt. 21.07.2010

Approved by

Issued by

Issue No. 02 QUALITY PROCEDURE Date 03.05.10 NATIONAL INSTITUTE OF OCEAN TECHNOLOGY Doc.No.N IOT/QP/S&P Page No. 6 of 28 1.3.2 TENDER PROCESS There are three types of tenders as follows: Single Tender for Proprietary item. Limited Tenders for indent value up to 2 Lakhs. Limited Tenders for indent value more than 2 Lakhs and less than 25 lakhs. Open Tenders for indents value above or equal to 25 Lakhs. There are two forms of bid submission: Single bid Dual bid (Part A- Technical bid; Part B- Price bid) A) SINGLE TENDER: Single / Proprietary / Specific Brands Items: a. The Indents below `25,00,000/- for the procurement of spare parts, accessories and consumables which are to be purchased on compatibility grounds are processed under single tender basis subject to justification of rate reasonableness. Procurements of proprietary / specific brand items / sole manufacturer can also be processed on single quotes. All purchases above `25.00 lakhs, however should be procured only on Open Tender basis except on emergency / in special circumstances where approval of Director is obtained for processing of Single Tender or Limited Tender. Tender Enquiry will be sent by the indenting groups in case of the Indent value up to ` 2.00 lakhs and by S&P in case the Indent value is above `2.00 lakhs. Enquiry should contain a detailed specification of the item to be procured along with the due date for submission of the quotation. Usually, in case of single tenders, quotations are obtained as single part bid containing both commercial and technical specifications. In case, if the tender is not received in time, date for submission of single tender can be extended with recommendation from the Group Head and acceptance by S&P under intimation to the vendor. Single tender quotation should be opened on due date by the Group or S&P as the case may be and Purchase docket is prepared by the group as prescribed in the Annexure-3K. The file consists of docket, proof of sending tender notice, quotation Rev No. 00 Prepared by Rev. Dt. 21.07.2010 Approved by Issued by

Issue No. 02 QUALITY PROCEDURE Date 03.05.10 NATIONAL INSTITUTE OF OCEAN TECHNOLOGY Doc.No.N IOT/QP/S&P Page No. 7 of 28 received and ordering specification are to be forwarded to S&P section through Group Head for further process. The maximum time limit for inviting single Tender quotations is 15 days. The time limit for preparation of comparative statement and docket is expected to be 5 working days by the group depending upon the urgency and complexity from the date of tender opening. (Pl review actual duration and average time may be taken) B) LIMITED TENDER: In case of indents up to ` 2.00 lakhs, a. The indenting group will initiate action for calling of competitive quotations through central despatch, from the potential vendors after determining the specifications of the items required. The general conditions for Tender offers are listed in Annexure-3H b. Quotations are received by the Indentor/Group. c. After due date, the quotations will be opened by Indentor/Group on the same day. d. Delayed / late / post tenders will not be considered. e. These quotations should be assigned and numbered serially. For ex. 1/5, 2/5, 3/5, 4/5 and 5/5 (if 5 quotations have been received) and signed by the Indentor and any other person belong to the same Group. f. The covers through which these quotations have been received should also be similarly numbered and retained with the quotations. g. The Indentor will prepare the Comparative Statement for the received quotes. The technically unqualified quotes to be rejected and reflected in the comparison statement. The recommendations out of comparing minimum of three valid quotations which are technically qualified and commercially lowest bidder to be indicated in the Purchase docket as prescribed in the Annexure-3K along with the specification (if any). The file consists of the comparative statement, docket and quotations received are to be forwarded to S&P section through Group Head. In case the valid quites are less than 3, approval of the Director shall be obtained for waiver of minimum 3 comparable quotes. Rev No. 00 Prepared by Rev. Dt. 21.07.2010 Approved by Issued by

Issue No. 02 QUALITY PROCEDURE Date 03.05.10 NATIONAL INSTITUTE OF OCEAN TECHNOLOGY Doc.No.N IOT/QP/S&P Page No. 8 of 28 h. In case if specific approval from the Director is got for floating an enquiry through limited tender for any indent above ` 25.00 lakhs, then S&P Section should take initiative to send the tender enquiry and follow the procedure as said from a) to g) above. Tenders thus, obtained should be opened by S&P through a standing tender opening committee comprising along with F&A representative, Indentor/Group Head. After opening, the quotations are sent to the Indentor/F&A for deposit of EMD where applicable along with the file for preparing comparative statements. Limited tenders are floated only on single part basis except under special circumstances wherein, dual part bid is followed. Minimum three comparable quotes to be received The minimum time limit for inviting Limited Tender quotations is 15 days. Where the shorter period of tender is desired, specific approval of Director shall be obtained by the Director. In case of short tender notice, approval to be obtained prior to LTE. C) OPEN TENDERS: a. Indents costing >= ` 25,00,000/- are to be followed by open tender process. In case of high value tenders for sensitive specific requirement, Expresssion of Interest along with pre-qualification tenders can be floated and EOI meeting can be organized for discussion of techno-commercial terms. Those vendors who comply the pre qualification and the techno-commercial conditions, will be shortlisted by a duly constituted committee/Group by the Director and tender enquiries will be issued to only those qualified vendors. b. On receipt of the signed hard copy and soft copy of specifications from the respective groups, the S&P section will arrange for the issue of the open tender. While technical groups technical specification is vetted by an expert in the similar area of expertise for confirmation of generalization of specification to attract more competition, S&P ensures commercial terms and other contractual terms as per prescribed guidelines of Ministry of Finance and CVC and relevant Guidelines. The estimated cost for publishing the advertisement is obtained from the advertising agency and approval for the same is got from the Director before publishing the open tenders in newspapers. S&P plays a major role in obtaining the technical specifications from the Groups and merge the same with the commercial terms and general instructions of the tenders and managing uploading, issue of corrigendum, Pre bid minutes etc., in our website. A minimum of 30 days are Rev No. 00 Prepared by Approved by Issued by Rev. Dt. 21.07.2010

Issue No. 02 QUALITY PROCEDURE Date 03.05.10 NATIONAL INSTITUTE OF OCEAN TECHNOLOGY Doc.No.N IOT/QP/S&P Page No. 9 of 28 allowed between the date of uploading of the tender in the web site to due date. The detailed specifications and other related documents will be placed in the website of the Institute. The tenderer can download the documents free of cost and no physical tender documents are issued by the S&P Section. The tender may be single part or dual part bid. In case of high value tenders where the techno commercial competence of the tenderer has to be evaluated before deciding to place the order, the tenders can be invited in 2 parts, Part A containing techno commercial bids and Part B price bids. After evaluation of techno commercial bids, the price bids of those who technically qualified would be opened and decision taken. c. If any potential vendors list is received from the Indentor, S&P section will draw their attention about the tender published, to get more competitive quotes. d. Sealed envelopes with the details of the tender super scribed on the outside of the cover will be required to be dropped by the tenderers in the tender box. Tenders received through post would also be received and dropped in the tender box. e. The tenders will be opened on the stipulated date in the presence of the duly constituted tender opening committee comprising the Indentors, representatives of S&P, finance and representatives of tenderer if present (on production of authorization certificate from competent authority), and numbered serially as prescribed for quotations with signatures. f. S&P section will forward all the EMD to F&A for necessary action and forward the opened quotations to the F&A for EMD deposit and to the concerned group for evaluation within one working day from the date of receipt of file. g. In cases of dual bids technical comparison is done by Indentor and submitted to JSWC / SWC for opening of price bids of the technically qualified bids. There after the selected vendors will be informed of the date and time of the price bid opening. h. After the price bid (Part B) is opened, the same will be forwarded to the Indentor for preparing comparison statement and submit their recommendation to SWC to place the order within 2 working days from the date of approval of JSWC / SWC minutes i. In case of single part bid, the quotations will be forwarded to the Indentor for preparing comparison statement and submit their recommendation to SWC to place the order. The time limit for inviting Open Tender quotations is 30 days. Rev No. 00 Prepared by Rev. Dt. 21.07.2010 Approved by Issued by

Issue No. 02 QUALITY PROCEDURE Date 03.05.10 NATIONAL INSTITUTE OF OCEAN TECHNOLOGY Doc.No.N IOT/QP/S&P Page No. 10 of 28 The time limit for preparation of comparative statement is 15 days. If no action is completed within the tender validity the file is deemed to be closed. Depending upon the need and clarification needed bid validity extension will also be sought from such vendors. For all types of tenders, late tenders will never be entertained and such covers will be kept in the file without opening after super-scribing them as late tender. The tender enquiry costing more than ` 25 lakhs is floated incorporating EMD clause, its procedure is as follows. The EMD about 2% to 5% as per Ministry of Finance Guidelines/GFR to ensure successful contractual obligation of the bidder in the event of award of tender to them. If the vendor resorts to non execution or breach of contract EMD shall be forfeited. The EMD submitted by the unsuccessful tenderers would be returned to them after submission of Performance Security by the successful bidder Format of tender enquiry is shown in Annexure-3H&I. Format of tender opening sheet is shown in Annexure-3J.

E-Tendering Process With the approval of Director Stores and Purchase section has also implemented the on-line E-tendering with a view to achieve efficiency in decision in decision making and cut down processing time and ensure transparency as per Ministry of Finance Guidelines. The format for obtaining the techno commercial bid is uploaded in the net and quotations are obtained on line. Accordingly, the comparison of the above are automatically drawn and forwarded to Group for verification and certification on the same day all other processes are same as open tender.

Rev No. 00 Prepared by Rev. Dt. 21.07.2010

Approved by

Issued by

Issue No. 02 QUALITY PROCEDURE Date 03.05.10 NATIONAL INSTITUTE OF OCEAN TECHNOLOGY Doc.No.N IOT/QP/S&P Page No. 11 of 28 1.3.3 PURCHASE PROCESS The purchase process is classified as follows Indents costing less than ` 1,00,000/The Indentor will prepare a comparative statement and along with his / Group Heads recommendations will forward the purchase docket to Finance for fund commitment and to S&P for Purchase order for technically qualified, commercially lowest vendor. If there is any deviation, approval of the competent authority to be attached with the docket. The Terms and conditions of the order are enclosed as Annexure-3AB or Annexure-3AC. All purchases costing less than ` 1,00,000/- would be processed for issue of purchase order by S&P section with the approval of group heads for such procurement vide purchase docket. If payment is to be made prior to supply or work, approval for making advance payment is to be obtained from Director. The time limit for placing the Purchase Order after receipt of purchase docket and ordering specification is 3 working days. Indents costing more than ` 1,00,000/The Indentor will prepare the comparative statement and along with his and his Group Heads recommendations for technically qualified, commercially lowest vendor, the purchase docket will be forwarded to Finance for fund commitment and to S&P to present the file to Store Works committee. If there is any deviation in recommendation, appropriate approval by the competent authority to be attached. Purchase dockets costing 1,00,000/- and more are to be presented to the Junior Stores Works committee (JSWC) and Purchase dockets costing more than 4,00,000/- to Stores Works committee (SWC) for obtaining approval to place the order. The scope of JSWC / SWC is detailed in Annexure-3AA. If the

Rev No. 00 Prepared by Rev. Dt. 21.07.2010

Approved by

Issued by

Issue No. 02 QUALITY PROCEDURE Date 03.05.10 NATIONAL INSTITUTE OF OCEAN TECHNOLOGY Doc.No.N IOT/QP/S&P Page No. 12 of 28 purchase docket is not approved by SWC, the file will be returned back to the Indentor with the remarks of the SWC committee. If the purchase docket is approved by JSWC / SWC, order will be issued by S&P for the recommended Party. If any recommendation for negotiations, the file will be forwarded to Negotiation Committee comprising of one SWC member, Indentor and Member Secretary (SWC). Based on the approved recommendations of the Negotiation Committee the order will be issued. The Terms and conditions of the order is enclosed as Annexure-3AB&3AC. If payment is to be made prior to supply or work, approval for making advance payment is to be obtained from Director. The time limit for placing the Purchase Order will be three working days after receipt of docket with ordering specification, SWC minutes and Negotiation committee Minutes(if any) and clearance for the draft order sent for vetting. The types of orders are Local supply orders High sea sales Import orders Work orders Manpower supply orders Annual Maintenance contract Rate Contract Repeat Order Emergency purchase Parallel order Rate Contract Split order Trial order Turnkey Order

Rev No. 00 Prepared by Rev. Dt. 21.07.2010

Approved by

Issued by

Issue No. 02 QUALITY PROCEDURE Date 03.05.10 NATIONAL INSTITUTE OF OCEAN TECHNOLOGY Doc.No.N IOT/QP/S&P Page No. 13 of 28 LOCAL ORDERS Order placed on Indian companies for INR value. The Terms and conditions of the order is enclosed as Annexure-3AB& AC. For Imports whose payment will be in INR, the order will be in the following type. High Sea Sale basis - procurement of foreign items in Indian Rupee through High Sea Sale Agreement between the vendor and NIOT. In High Sea Sale basis, Custom Duty concession Certificate should be issued if required by the vendor and High Sea Sale Agreement should also be signed. Annual Maintenance Contract - In respect of Machinery and equipments after the warranty period maintenance contracts can be entered into either with the manufacturers or their agents or through third parties who are capable of undertaking such contracts. The rates quoted have to be justified with reference to the capital cost and the nature of input such as spares, consumables. Renewal Annual Maintenance Contract : In respect of renewals the proposal should be supported by the copies of the log sheets/ service reports indicating the preventive and breakdown calls attended by the Contractor in the previous year. The Indentor should also certify the satisfactory service of the contractor. In general the payment for AMC will be made based on the completion certification for the stipulated period from the user. However advance payments when become inevitable and keeping in view of the interests of the Institute Quarterly / Half Yearly advance payments can be proposed for an equivalent value of Bank Guarantee. Rate Contract For items of repetitive in nature, which are identified as common user items and are needed on recurring basis by various groups, can be procured through Rate Contract. Rate contracts can be concluded by Open Tender process normally. For items of proprietary in nature like spare parts for ship or sub components/sensors for the Data buoy programme, Rate contract can also be considered with OEM. After calling for tenders, Rate Contracts can be concluded Rev No. 00 Prepared by Approved by Issued by Rev. Dt. 21.07.2010

Issue No. 02 QUALITY PROCEDURE Date 03.05.10 NATIONAL INSTITUTE OF OCEAN TECHNOLOGY Doc.No.N IOT/QP/S&P Page No. 14 of 28 requesting the contractors to keep their rates fixed during the currency of the contract. For ordering items from rate contract, purchase orders may be placed by the S&P section immediately on receipt of the approved indents along with dockets from the respective indentors / groups after ascertaining funds availability. For such rate contracts discounts given by the vendors should be clearly mentioned in the Purchase Order and a rate contract letter should be issued to each vendor denoting the period of rate contract, discount and other important commercial terms. When rate contract is operated, every time confirmed order is issued based on needs approved by the competent authority. Extension of rate Contract: The rate contract can be extended provided it is recommended by the group head, S&P, SWC and with the approval of Director and also after the party accepts to execute the supply / work for the same cost and conditions. Repeat Orders - Repeat Order can be resorted if they are advantageous to the Institute. Repeat Orders can be placed within a period of one year from the date of original order. The proposals should be sent to S&P section by the indentor. After obtaining the price confirmation / price discount (if any) from the supplier, these proposals should also be treated as regular purchase. For ST, normally the quantity to be ordered cannot exceed the original order quantity. If quantity is increasing with the approval of the competent authority same may be considered. PARALLEL ORDERS Where the requirements cannot not be met by one single party, to have a reliable vendor base, parallel order are issued at the same rates and terms and conditions. SPLIT ORDER When the quotations are compared for line items and if the items are not interdependent for compatibility, spilt order can be placed for the L1 rates of the line items when considered to be advantageous to the vendor.

Rev No. 00 Prepared by Rev. Dt. 21.07.2010

Approved by

Issued by

Issue No. 02 QUALITY PROCEDURE Date 03.05.10 NATIONAL INSTITUTE OF OCEAN TECHNOLOGY Doc.No.N IOT/QP/S&P Page No. 15 of 28 TRIAL ORDER In case of bulk requirement or where the validation of the production through trials are critical to ensure quality of the product for anticipated performance, rate contract, to ensure the quality of the supply trial order can be placed for sample items. Based on the acceptance of the sample after performance evaluation, regular order can be placed. EMERGENCY PURCHASE PROCEDURE (EPP) If an item is to be procured or any work to be executed for emergency requirement, approval to be obtained by the Indentor in the Indent EMERGENCY PURCHASE form for PROCEDURE Director. After obtaining the approval, the Indent form along with from purchase docket should be routed through the Purchase officer, Internal Auditor / AO for approval of Director for placing the Purchase order. The procedures to be followed for EPP are: Tendering process: Quotes can be received through fax / email / conducting market survey / by post / by hand. In case of single tender / proprietary procurement / specific brand the approval of Director to be obtained at the EPP Indent. The price reasonability should be established by the Indentor before placing PO/WO. Emergency Indent with the approval of Director along with the quotations, comparative statement and purchase docket duly signed by the Indentor, Project Head to be forwarded to S&P for placing the order. Further ratification to be done through JSWC / SWC. CON FIRMATORY ORDER Placing order after effecting the supply / execution of work. During field work upon receipt of Directors approval Emergency procurement / Work can be done by obtaining minimum three quotations by conducting market survey. On return from Rev No. 00 Prepared by Rev. Dt. 21.07.2010 Approved by Issued by

Issue No. 02 QUALITY PROCEDURE Date 03.05.10 NATIONAL INSTITUTE OF OCEAN TECHNOLOGY Doc.No.N IOT/QP/S&P Page No. 16 of 28 the field work, the approved EPP Indent, Certified Invoice, SRB may be forwarded to S&P for placing confirmatory order for effecting the payment. Technical Work contracts / Civil work contract of Estate & Maintenance Proposals - All orders above 50,000/- will be issued by the S&P Section after clearance of the same by the JSWC / SWC. B) IMPO RT OF EQUIPMENT THROUGH FOREIGN ORDERS: The procedure for calling quotations / tenders for import of items is similar to that of Local purchases, however, the purchase order should be issued on the foreign supplier. The decision for placing order on the foreign supplier should preferably be made on the offer received from the foreign supplier rather than from the local agent. In cases where the local agent in India is authorized to quote and negotiate on behalf of their principals, the letter of accreditation should be secured from the local agent before any decision is taken as per OEM authorization format prescribed by NIOT (Annexure 3AH). The orders are placed with the approval of JSWC / SWC on the commercially lowest and technically qualified vendor. Deviation if any, to be accompanied by approval of competent authority. The terms and conditions attached to the order & description of item ordered should be in consonance with tender specification and vendors quote where acceptable. The mandatory terms and conditions to be incorporated in Import orders are at Annexure-3AC. In both the cases, payment terms should be only after receipt of materials / completion of work should be encouraged. Advance Payments, if considered acceptable, should be incorporated in the order only after getting approval of the competent authority. To safeguard the interest of the Institute and in cases of huge advance payments, furnishing of Advance Bank Guarantees from the suppliers should be incorporated in the orders to cover the advance payments. C) AMENDMEN TS: Any changes in the Order will be incorporated as amendment to the Order based on approval for the same will be obtained from the competent authority from time to time as per the requirement. Rev No. 00 Prepared by Approved by Issued by Rev. Dt. 21.07.2010

Issue No. 02 QUALITY PROCEDURE Date 03.05.10 NATIONAL INSTITUTE OF OCEAN TECHNOLOGY Doc.No.N IOT/QP/S&P Page No. 17 of 28 D) AGREEMENTS: Agreements are generally signed for work contracts of huge values containing several stage payments involving several conditions. A Letter of Intent will be issued to the Contractor before signing of agreement. All documents like tender enquiry, quotation, minutes of prebid / negotiation meeting (if any), specifications, drawings, commercial conditions, letter of intents, amendments if any should form part and parcel of the agreement. Agreement should be taken in a non-judicial stamp paper and should be signed by both the parties viz. Contractor and NIOT agreeing to all terms and conditions incorporated in it. Agreements will be prepared and signed by both the parties after receipt of acceptance for the Letter of Intent from the party. The maximum process time for issue of agreement is 5 working days from the date of receipt of clear documents and reaching agreement on the contents of the contract if not provided along with the tender. Format of Purchase Docket is shown in Annexure-3K&L Format of JSWC / SWC Agenda is shown in Annexure-3M. Format of Purchase Order is shown in Annexure-3N&O. Format of Warranty Certificate is given in Annexure-3P. Format of Performance Bank Guarantee and Format of Advance Bank Guarantee are given in Annexure-3T. Format of Bank Guarantee for Security Deposit / EMD is given in Annexure-3U. Format of High Sea Sale Agreement is given in Annexure-3W. Short closure of order / Cancellation of order. In case if the Indentor recommends to cancel any/all ordered item/work, cancellation/short closure of the order will be intimated to the party after getting approval from SWC/competent Authority as the case may be. Time limit: 3 Working days from the date of submission of clear documents.

Rev No. 00 Prepared by Rev. Dt. 21.07.2010

Approved by

Issued by

Issue No. 02 QUALITY PROCEDURE Date 03.05.10 NATIONAL INSTITUTE OF OCEAN TECHNOLOGY Doc.No.N IOT/QP/S&P Page No. 18 of 28 1.3.4 POST PURCHASE PROCESS Delivery of items: The post purchase process starts after the placement of order. S&P takes follow-up action atleast two weeks before the scheduled delivery date to ensure delivery of the item within the delivery schedule as per the terms and conditions of Purchase Order. If there is any delay in the delivery schedule, S&P takes necessary steps to send reminders to the vendors and pursue the matter vigorously to procure the materials at the earliest time possible. If the delivery is delayed twice the time of original delivery schedule committed by the party, if the group prefers not to wait, S&P ensure appropriate action to provide ultimatum to proceed further to either get the supply or to proceed alternatively. The items delivered at NIOT as per PO and material inward endorsed thro a seal put by the Security at the Main gate are received by a representative of the Stores and Purchase and Stores Receipt Inward Voucher is prepared. The SRIV along with the delivered item is forwarded to the identified NIOT officer for Inspection and to the Indentor for inspection and acceptance. Defective / non acceptance / Short supply of items. In case of defective or non acceptance or short supply of the items, the same need to be recorded in the SRIV and sent back to S&P for necessary action for rectification/follow up Forwarding of bills to F&A for payment to Local supply / work after delivery. On receipt of the clear documents viz, certified Invoice, SRIV / SRB (Annexure 3AF) and other related documents S&P Section will forward the same along with the file and checklist to F&A for payment process. 3 working days from the date of receipt of clear recommendation and documents. Payments prior to dispatch / against delivery and stage payment: In case, if the payment has to be made in advance, prior to receipt of materials, the file will be forwarded for payment with certified pro forma Invoice, checklist for advance payment and approval of Director for advance payment. (Action taken by S&P for follow up of advance payment made supplies) Rev No. 00 Prepared by Approved by Issued by Rev. Dt. 21.07.2010

Issue No. 02 QUALITY PROCEDURE Date 03.05.10 NATIONAL INSTITUTE OF OCEAN TECHNOLOGY Doc.No.N IOT/QP/S&P Page No. 19 of 28 In case, if the payment has to be made against delivery, pro forma Invoice duly recommended by the Indentor for payment against delivery is forwarded to Finance and Accounts section for payment. The cheque / DD will be issued to the supplier against receipt/installation/commissioning of the items as per Purchase order. In some cases stage payment / part payment will be made as stipulated in the order / agreement and based on the recommendation of the Indentor. Adjustment procedure for advance payment / against delivery: Indentor will forward the documents viz, certified Invoice, SRIV / SRB (Annexure 3AF) and other related documents to S&P Section. S&P section will check the entire bill and will forward the same along with the file to F&A for adjustment. Time Limit: 3 Working days from the date of receipt of clear documents from the Indentor. CUSTOMS DUTY PAYMENT: For every import clearance, custom duty is to be paid based on the assessable value. Since NIOT is a Research Organization, a concessional rate is being paid on the assessable value towards Customs Duty payment. Demand for CD is raised by S&P in the prescribed format at Annexure-3X after arrival of Cargo Arrival Notice. The bill is forwarded to F&A along with the following documents thro file for providing the Customs Duty thro a demand draft for ensuring timely clearance. Airway Bill / CAN / Bill of lading Invoice Packing list Time Limit: 3 Working days from the date of receipt of clear documents. Clearing of Imports: On receipt of Bank Demand draft in favour of Commissioner of Customs, Chennai, the C&F agent is called for to collect the following documents for customs filing. Documents to be provided to C&F Agents for custom clearance are: Rev No. 00 Prepared by Approved by Issued by Rev. Dt. 21.07.2010

Issue No. 02 QUALITY PROCEDURE Date 03.05.10 NATIONAL INSTITUTE OF OCEAN TECHNOLOGY Doc.No.N IOT/QP/S&P Page No. 20 of 28 Letter to C&F Agent Authorization Letter to Collect DO from Carrier of the freight forwarder Essentiality Certificate DSIR Certificate Copy of Cargo Arrival Notice (CAN) got from Air/ship carrier copy of Airway bill / Bill of Lading (if available from the supplier) Copy of Invoice (if available from the supplier) etc. Bank release order (in case of payments by way of LC / Sight draft) The material has to be cleared within 8 working hours of the assessment of Bill of Entry to avail the Green Channel Facility. Demurrage charges will be levied on the materials, which are not cleared from the customs within 3 working days from the date of landing of consignment. As a matter of general rule, demurrage should be avoided. Any demurrage charges to be incurred, the reasons are analyzed and only when established that it is unavoidable, the C&F Agents are reimbursed with the demurrage charges vide their respective Invoice. Demurrage charges if attributable to the supplier, C&F agents, the same will be recovered from them. Approval for demurrage charges when absorbed by NIOT are obtained from competent authority. The consignment will be brought to NIOT warehouse by the C&F agent. S&P will receive goods, ensure physical condition, and process thro the SRIV process for domestic supplies. In case of physical defective goods, the local representative of the respective insurer is informed to conduct a survey and give a report to the supplier. If the defect has occurred during the transit, the supplier requested to replace the goods or insurance claim need to be preferred Payments for foreign orders The mode of payments are: Letter of credit Wire transfer / DD in advance Wire Transfer / DD after supply Wire Transfer against supply (Sight draft) Rev No. 00 Prepared by Approved by Rev. Dt. 21.07.2010

Issued by

Issue No. 02 QUALITY PROCEDURE Date 03.05.10 NATIONAL INSTITUTE OF OCEAN TECHNOLOGY Doc.No.N IOT/QP/S&P Page No. 21 of 28 Wire transfer in advance Generally advance payments are avoided in case of foreign supplies. Hence, if the value of purchase is small / if the vendor is not willing to supply the goods without advance payment, then recommendation for advance payment should be made by Indentor / Group Head and approval should be taken from the Director for the same. In case of Advance Wire Transfer, after receiving the Order Acknowledgement, the file should be sent to the Accounts Section duly recommended for payments with the following set of documents. A1 form for release of payment Declaration cum Undertaking FEMA Declaration Order Acknowledgement Proforma Invoice Purchase Order Copy Time Limit: 5 Working days from the date of receipt of clear documents. LETTER OF CREDITS: In case of Letter of Credits, either unconditional Letter of Credit or Conditional Letter of Credit, it will be opened after getting order acknowledgement from the principal supplier. While opening the Letter of Credit, the following essential documents are to be forwarded to Accounts Section along with checklist: Order acknowledgement / Proforma Invoice LC application duly filled with additional condition if any Declaration cum undertaking FEMA declaration form Order copy

Rev No. 00 Prepared by Rev. Dt. 21.07.2010

Approved by

Issued by

Issue No. 02 QUALITY PROCEDURE Date 03.05.10 NATIONAL INSTITUTE OF OCEAN TECHNOLOGY Doc.No.N IOT/QP/S&P Page No. 22 of 28 LC AMENDMENTS: The changes / Amendments made in the Order will be incorporated in the respective Letter of Credit by issuing a LC amendment form suitably. LC RETIREMENT After the receipt of Cargo Arrival Notice, the process of LC retirement is initiated by S&P. The documents to be submitted along with LC retirement are: Form A1 indicating the respective LC No. to be retired Copy of CAN / Airway Bill / Bill of Lading Copy of Invoice

Rev No. 00 Prepared by Rev. Dt. 21.07.2010

Approved by

Issued by

Issue No. 02 QUALITY PROCEDURE Date 03.05.10 NATIONAL INSTITUTE OF OCEAN TECHNOLOGY Doc.No.N IOT/QP/S&P Page No. 23 of 28 WIRE TRANSFER / DD AFTER SUPPLY: In cases where the payment has to be made after supply, the following documents are to be submitted to the Accounts Section recommending for payment along with the SRIV duly signed by Indentor / Group Head. A1 form FEMA declaration Covering letter to Bank (if required) Copy of Airway Bill / Cargo Arrival Notice Copy of Warranty Certificate / Inspection Certificate / Test certificates (if any) PBG submitted if any Copy of Price certification (if any) Bill of Entry Time Limit: 5 Working days from the date of receipt of clear documents. SIGHT DRAFT: In cases where the payment has to be made against supply or collection of document, the following documents are to be submitted bank through the Accounts Section recommending for obtaining release order. A1 form Order acknowledgement / pro forma Invoice FEMA declaration Declaration cum under taking Covering letter to Bank (if required) Time Limit: 5 Working days from the date of receipt of clear documents. The triplicate copy of Bill of Entry for all imports will be submitted to bank towards proof of import before three months from the date of import. Rev No. 00 Prepared by Rev. Dt. 21.07.2010 Approved by Issued by

Issue No. 02 QUALITY PROCEDURE Date 03.05.10 NATIONAL INSTITUTE OF OCEAN TECHNOLOGY Doc.No.N IOT/QP/S&P Page No. 24 of 28 ALL IMPORT PAYMENT ADJUSTMENT After receipt of Bank debit advice the file will forwarded to Accounts section for payment adjustment along with the following documents. 1. Certified Invoice 2. Certified SRIV 3. Other related documents such as Test Certificate, Inspection certificate etc. Time Limit for forwarding the above documents for adjustment is 5 Working days from the date of receipt of clear documents. CLEARIN G AND FORWARDING AGENTS BILLS: Customs clearance bill submitted by the CHA agents, after checking arithmetic accuracy, forwarded along with the following supporting documents to F&A for payment process as per contract terms. Custom House Agent (CHA) Invoice Terminal Storage Payment (TSP) receipt of Airport Authority of India CMC claim Copy of Bill of Entry Copy of TR6 Challan Steamer Agent Bill Container Terminal Storage receipt Time Limit: 5 Working days from the date of receipt of clear documents.

Rev No. 00 Prepared by Rev. Dt. 21.07.2010

Approved by

Issued by

ASSET ENTRY As a part of inventory process, asset entry is made according to the nature of the item viz. Plant & machinery Electrical Computer & peripherals Furniture & fixtures Spares / Consumables Vehicle Office equipments Oceanographic and survey equipments Ship and ship related accessories Any other category as demanding according to the status of the item Re-Export: Items re-exported during the warranty period where there is no foreign exchange Involved. Approval for re-export to be obtained. Confirmation letter from the supplier along with the value of the spare for customs purpose. The following documents are prepared submitted to agent for re-export. a) Request letter to Customs Commission for re-export. b) Re-export certificate issued by NIOT bankers (GR waiver Notification no. FEMA 36, RBI dated 27.2.2001) Export of goods and services under regulation IV (1) / 2000. Modification of the Notification No. 23/2000 RBI dated 3.5.2002 c) Re-export Invoice cum packing list d) Working sheet for the value of the consignment for custom purpose (Value of the equipment + 1% landing cost) x prevailing Ex rate at the time original Import. e) Consignment booked on FOB basis. Rev No. 00 Prepared by Approved by Issued by Rev. Dt. 21.07.2010

Issue No. 02 QUALITY PROCEDURE Date 03.05.10 NATIONAL INSTITUTE OF OCEAN TECHNOLOGY Doc.No.N IOT/QP/S&P Page No. 26 of 28 Re-export for items not under Warranty when foreign exchange involved: 1. Request letter to Customs Commission for re-export. 2. Re-export certificate issued by RBI (GR waiver Notification no. FEMA 36, in banker letter Head, RBI dated 27.2.2001) Export of goods and services under regulation IV (1) / 2000 and Notification No. 23/2000 RBI dated 3.5.2002 3. Re-export invoice cum packing list 4. Working sheet for the value of the consignment (Value of the equipment + 1% landing cost) x prevailing Ex rate at the time original Import. 5. Freight & insurance to the supplier scope and consignment booked through CHA agent on FOB basis. 1.3.5 STOCK VERIFICATION PROCESS To be completed preferably before finalizing the accounts during the respective year i.e. 30 Sept. of the respective financial year by the respective groups. Maintaining of the correct account of the stock is as important as the purchase formalities. The following steps should be adhered to with regard to the maintenance of the stock: Whenever the material is issued from the stock of the Groups, suitable entry should be made in the group maintained Stock Register. The stock in the group must be verified periodically and at least once in a year thru a duly constituted physical verification committee. S&P shall facilitate the physical verification committee with the list of stocks to be verified and coordinate until submission of report by the committee. Items which are unserviceable and obsolete should be drawn up by the Group Head periodically and sent to Purchase Officer (S&P) in the prescribed format (Annexure ) for consideration by the duly constituted Stores Condemnation Committee as per terms of reference and submit suitable recommendation to the Director for further action. Items approved for condemnation shall be disposed of in following ways as economically found advantageous to NIOT: Rev No. 00 Prepared by Approved by Issued by Rev. Dt. 21.07.2010

Issue No. 02 QUALITY PROCEDURE Date 03.05.10 NATIONAL INSTITUTE OF OCEAN TECHNOLOGY Doc.No.N IOT/QP/S&P Page No. 27 of 28 Disposal thro public auction/tendering Buy Back Gifting to academic institutions For above the relevant guidelines of Govt. of India as amended from time to time shall be followed.

Rev No. 00 Prepared by Rev. Dt. 21.07.2010

Approved by

Issued by

Issue No. 02 QUALITY PROCEDURE Date 03.05.10 NATIONAL INSTITUTE OF OCEAN TECHNOLOGY Doc.No.N IOT/QP/S&P Page No. 28 of 28 1.3.6 DISPOSAL PROCESS: Items, which have become unserviceable due to wear and tear and due to continuous usage will become obsolete and hence need to be condemned. The items to be condemned are listed as unserviceable and with the help of the Committee approved by Director, the items are scrutinized and condemned. Auction if any needed, the procedure for auctioning the condemned materials is as follows. The realizable value of the condemned materials will be fixed by a Committee constituted by upon the realizable value, The entire tender process shall be Director and in line with prevalent guidelines of Government of India disposal procedure. Amount realized deposited with F&A for further action to removal of asset from the auction from Books The book value of the items that are condemned and disposed off would be informed write off as per procedure. F&A for to RECORD MANAGEMENT: The S&P has a separate Records Cell, managed by Group D of the Stores & Purchase. All action is completed is sent to Record Room for safe keeping files where final The files are kept / arranged year-wise / Group-wise / P.O. wise. Any file required for consultation can be the Record In-charge on the orders of Purchase Officer retrieved through or authorized officials of (Stores & Purchase), for which separate requisition slip should be kept in the retrieved & returned to the official when the recorded file is place of the file returned. The the file in the Records Cell is as under. File requisition retention of proforma is as at Annexure. P.O. valuing - Over ` 20,00,000/ - Permanent Between ` 50,000/ 5 Years to ` 20,00,000/Less than ` 50,000/ - 3 Years After the retention period, the files are destroyed over the approval of competent authority.prescribed for location of a file is 15-20 minutes. The time