Procurement of Goods in Government

Procurement of Goods and Condemnation 
of Un-serviceable Stores

-Dr. Lalit Kumar

1. Procurement of Goods in Government

In earlier article, we studied how tender and Central Vigilance Commission are concerned with each other. In procuring goods and services, there are rules generally followed by the procuring authorities in Government organizations. The rules can easily be understood by categorizing the purchases in various types like, (i) Purchase Without Quotation, (ii) Purchase with Quotations, (iii) Tender System, (iv) Online Procurement.

(i) Purchase Without Quotation:

The small purchases cannot afford the cost of tendering. Therefore, the authorities should decide to procure the small purchases without quotation or tender. The limit for the purchases without quotation should be fixed and such limit should be compliance strictly to avoid the financial irregularities in procurement. In General Financial Rules or State Government’s Financial Rules, the limit should be cited properly, however the limit can be revised by issuing the circular or notification by the competent authorities. In such purchases, the procuring authority certifies, “I, …… am personally satisfied that these goods purchased are of the requisite quality and specification and have been purchased from a reliable supplier at a reasonable price.”

In Government of India or central government department, the limit of such purchases is up to Rs. 25000 in each occasion. In Haryana Government, the limit of such purchases is up to Rs. 10000 in each occasion.

(ii) Purchase with Quotation:

In case of purchase amounting more than the specified limit of ‘purchase without quotations’; then quotation can be used up to a specified limit and in case such limit crossed, tender system is adopted for procurement of goods and services. In purchase with quotation or tender; it is required to frame a committee of at least three officers. The committee firstly survey the market and check the rates of the goods to be procured. The quality standards and specifications are also determined. In order to identify appropriate supplier with ensuring Economy, Efficiency, and Effectiveness in procurement; quotations from at least three vendors or suppliers are collected. After collecting the quotations, a comparative statement is prepared and jointly certified by the committee members with comments from which supplier it is economical to procure the goods. 

In Government of India or Central Government Departments, the limit for such purchases is for amount within the limits of Rs. 25001 to Rs. 100000. In Haryana Government, the limit of such purchases is for amount within the limits of Rs. 10001 to Rs. 100000.

2. Condemnation and Disposal of Store Articles

The Financial Rules contain the provisions for disposal of unserviceable store articles or surplus stores. In Haryana Government, the Punjab Financial Rules are followed. It is given in rules that the Director, Supplies and Disposal Haryana is entrusted for condemnation and disposal of store articles however in case of vehicles, the office of Deputy Commissioner constitute Condemnation Committee for disposal of unserviceable vehicles.

(a) Disposal of Goods other than Vehicles:

In every quarter, the Head of Departments prepare a statement of unserviceable articles or surplus stores and forward the same to Department of Supplies and Disposal on 1^st Jan, 1^st April, 1^st July, and 1^st October of each year.

The book value of the stores decides at which level the goods can be disposed through auction. If the book value is up to Rs. 10,000 then the goods are disposed at the level of Department but if the book value is more than Rs. 10,000 then a statement of the goods with value sent to the Department of Supplies and Disposal and put up to a Condemnation Board consisting for five persons including representative of indenting department, one from Department of Supplies and Disposal, One from the Deputy Commissioner office of the concerned District, and two from the Government Departments depending upon the nature of goods in question or goods to be disposed through auction i.e. may be from Irrigation Department, Public Health, Prisons, Police, Agriculture, Industries, Health Services, Forests etc.

Since the statement of goods to be disposed, received in each quarter; the board members meet in the month of Jan, Apr, Jul, and October and fix the reserve prices of the store articles in the inspection report and the report is sent by the indenting department to the concerned Administrative Department for declaring the stores unserviceable or Surplus for disposal. After getting the approval of Administrative Department, the indenting department send the case to Department of Supplies and Disposal (DSND). The DSND refer the case to Department of Industries for auction.

Auction of Unserviceable or Surplus Stores:

The DSND invites tenders for auction of the stores. However, the sanction is required to Department of Industries if the book value of the stores is more than 25,000. If it is less than Rs. 25,000 then no sanction required from Department of Industries.

(b) Disposal of Vehicles:

The Deputy Commissioners at District Level under their chairmanship with the help of committees including one representative of indenting organization, Sub-Divisional Officer (Mechanical) from PWD (B&R) Department, and Works Manager of Haryana Roadways. An auction notice is published in the press and the vehicles are brought to the venue of auction at least one hour before the scheduled time of auction. The GST also collected (in addition) to the auction price settled by the bidders.

Auction of Vehicles:

An amount for Rs. 500 collected as earnest money from each bidder and the successful bidder requires to deposit 25% of the highest bid on the spot and the remaining 75% is required to be deposited within 72 hours. After getting the full payment, the delivery of vehicle is made with Sales order to the successful bidder.

In next article, it is detailed how tenders are floated and types of tenders in Government.

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