(a) These
rules may be called "The Bihar Finance (Amendment) Rules, 2005. (b) It
shall extend to the whole of the state of Bihar. (c) It
shall come in to force at once. The
title of Section XI "Contracts" will be substituted by "Contract Management" Rule
29 to 30 of the Bihar Finance Rules will be substituted by the following? rules :- "Rule 29. (1) All
contracts shall be made by an authority empowered to do so by or under the
orders of the Governor in terms of Article 299 (1) of the Constitution of
India. (2)
All the contracts and assurances of
property made in the exercise of the executive power of the State shall be
executed on behalf of the Governor. The words ?for and on behalf of the
Governor of Bihar? should follow the designation appended below the signature
of the officer authorized in this behalf. Rule 30. General principles for
contract : The following general principles should be observed while entering into
contracts: (i)
The terms of contract must be
precise, definite and without any ambiguities. The terms should not involve an
uncertain or indefinite liability, except in the case of a cost plus contract
or where there is a price variation clause in the contract. (ii) Standard
forms of contracts should be adopted wherever possible, with such modifications
as are considered necessary in respect of individual contracts. The
modifications should be carried out only after obtaining financial and legal
advice. (iii) In
cases where standard forms of contracts are not used, legal and financial
advice should be taken in drafting the clauses in the contract. (iv) (a)
A Ministry or Department may, at its discretion, make purchases of value upto
Rupees one lakh by issuing purchase orders containing basic terms and
conditions: (b) ???In respect of
Works Contracts, or Contracts for purchases valued between Rupees one lakh to
Rupees ten lakhs, where tender documents include the General Conditions of
Contract (GCC), Special Conditions of Contract (SCC) and scope of work, the
letter of acceptance will result in a binding contract. (c) ???In respect of
contracts for works with estimated value of Rupees ten lakhs or above or for
purchase above Rupees ten lakhs, a Contract document should be executed, with
all necessary clauses to make it a self-contained contract. If however, these
are preceded by Invitation to Tender, accompanied by GCC and SCC, with full
details of scope and specifications, a simple one page contract can be entered
into by attaching copies of the GCC and SCC, and details of scope and
specifications, Offer of the Tenderer and Letter of Acceptance. (d) ???Contract
document should be invariably executed in cases of turnkey works or agreements
for maintenance of equipment, provision of services etc. (v) No
work of any kind should be commenced without proper execution of an agreement
as given in the foregoing provisions. (vi) Contract
document, where necessary, should be executed within 21 days of the issue of
letter of acceptance. Non-fulfilment of this condition of executing a contract
by the Contractor or Supplier would constitute sufficient ground for annulment
of the award and forfeiture of Earnest Money Deposit. (vii) Cost
plus contracts should ordinarily be avoided. Where such contracts become
unavoidable, full justification should be recorded before entering into the
contract. Where supplies or special work covered by such cost plus contracts
have to continue over a long duration, efforts should be made to convert future
contracts on a firm price basis after allowing a reasonable period to the
suppliers/contractors to stabilize their production /execution methods and
processes. Explanation
: A cost plus contract means a contract in which the price payable for supplies
or services under the contract is determined on the basis of actual cost of
production of the supplies or services concerned plus profit either at a fixed
rate per unit or at a fixed percentage on the actual cost of production. (viii) (a)
Price Variation Clause can be provided only in long-term contracts, where the
delivery period extends beyond 18 months. In short-term contracts firm and
fixed prices should be provided for. Where a price variation clause is
provided, the price agreed upon should specify the base level viz, the month
and year to which the price is linked, to enable variations being calculated with
reference to the price levels prevailing in that month and year. (b) ??A formula for
calculation of the price variations that have taken place between the Base
level and the Scheduled Delivery Date should be included in this clause. The
variations are calculated by using indices published by Governments or Chambers
of Commerce periodically. An illustrative formula has been appended to these
rules at Appendix -1A for guidance. (c) ??The Price variation clause should also
specify cut off dates for material and labour, as these inputs taper off well
before the scheduled Delivery Dates. (d) ??The price
variation clause should provide for a ceiling on price variations, particularly
where escalations are involved. It could be a percentage per annum or an overall
ceiling or both. The buyer should ensure a provision in the contract for
benefit of any reduction in the price in terms of the price variation clause
being passed on to him. (e) ??The clause
should also stipulate a minimum percentage of variation of the contract price
above which price variations will be admissible (e.g. where resultant increase
is lower than two per cent. no price adjustment will be made in favour of the
supplier). (f) ???Where advance
or stage payments are made there should be a further stipulation that no price
variations will be admissible on such portions of the price, after the dates of
such payment. (g) ??Where deliveries
are accepted beyond the scheduled Delivery Date subject to levy of liquidated
damages as provided in the Contract, the liquidated damages (if a percentage of
the price) will be applicable on the price as varied by the operation of the
Price variation clause. (h) ???No price
variation will be admissible beyond the original Scheduled Delivery Date for
defaults on the part of the supplier. (i) ????Price
variation may be allowed beyond the original Scheduled Delivery Date, by
specific alteration of that date through an amendment to the contract in cases
of Force Majeure or defaults by Government. (j) ???Where contracts
are for supply of equipment, goods etc, imported (subject to customs duty and
foreign exchange fluctuations) and / or locally manufactured (subject to excise
duty and other duties and taxes), the percentage and element of duties and
taxes included in the price should be specifically stated, along with the
selling rate of foreign exchange element taken into account in the calculation
of the price of the imported item. The
mode of calculation of variations in duties and taxes and Foreign exchange rates
and the documents to be produced in support of claims for such variations,
should also be stipulated in the Contract. (k) ???The clause
should also contain the mode and terms of payment of the price variation
admissible. (ix) Contracts
should include provision for payment of all applicable taxes by the contractor
or supplier. (x) ?Lumpsum?
contracts should not be entered into except in cases of absolute necessity.
Where lumpsum contracts become unavoidable, full justification should be
recorded. The contracting authority should ensure that conditions in the lump
sum contract adequately safeguard and protect the interests of the Government. (xi) Departmental
issue of materials should be avoided as far as possible. Where it is decided to
supply materials departmentally, a schedule of quantities with the issue rates
of such material as are required to execute the contract work, should form an
essential part of the contract. (xii) ?(a) In contracts where government property is
entrusted to a contractor either for use on payment of hire charges or for
doing further work on such property, specific provision for safeguarding
government property (including insurance cover) and for recovery of hire
charges regularly, should be included in the contracts. (b) ??Provision should
be made in the contract for periodical physical verification of the number and
the physical condition of the items at the contractors premises. Results of
such verification should be recorded and appropriate penal action taken where
necessary. (xiii) Copies
of all contracts and agreements for purchases of the value of Rupees
Twenty-five Lakhs and above, and of all rate and running contracts entered into
by civil departments of the Government other than the for which a special audit
procedure exists, should be sent to the Audit Officer and /or the Accounts
officer as the case may be. (xiv) ?(a) The terms of a contract, including the
scope and specification once entered into, should not be materially varied. (b) ??Wherever
material variation in any of the terms or conditions in a contract becomes
unavoidable, the financial and other effects involved should be examined and
recorded and specific approval of the authority competent to
approve the revised financial and other commitments obtained, before varying
the conditions. (c) ??All such changes
should be in the form of an amendment to the contract duly signed by all
parties to the contract. (xv) Normally
no extensions of the scheduled delivery or completion dates should be granted
except where events constituting force majeure, as provided in the contract,
have occurred or the terms and conditions include such a provision for other
reasons. Extensions as provided in the contract may be allowed through formal
amendments to the contract duly signed by parties to the contract. (xvi) All
contracts shall contain a provision for recovery of liquidated damages for
defaults on the part of the contractor. (xvii)A
warranty clause should be incorporated in every contract, requiring the
supplier to, without charge, repair or rectify defective goods or to replace
such goods with similar goods free from defect. Any goods repaired or replaced
by the supplier shall be delivered at the buyers premises without costs to the
buyer. (xviii) All
contracts for supply of goods should reserve the right of Government to reject
goods which do not conform to the specifications. Rule 30A. Management of Contracts : (1) Implementation
of the contract should be strictly monitored and notices issued promptly
whenever a breach of provisions occur. (2) Proper
procedure for safe custody and monitoring of Bank Guarantees or other
Instruments should be laid down. Monitoring should include a monthly review of
all Bank Guarantees or other instruments expiring after three months, alongwith
a review of the 83 progress of supply or work. Extensions of Bank Guarantees or
other instruments, where warranted, should be sought immediately. (3) Wherever
disputes arise during implementation of a contract, legal advice should be
sought before initiating action to refer the dispute to conciliation and/or
arbitration as provided in the contract or to file a suit where the contract
does not include an arbitration clause.The draft of the plaint for arbitration
should be got vetted by obtaining legal and financial advice. Documents to be
filed in the matter of resolution of dispute, if any, should be carefully
scrutinized before filing to safeguard government interest." The
title of Chapter 8 "Stores" of the Bihar Finance Rules will be
substituted by "Procurement of goods and Services" Rules
124 to 131 of the Bihar Finance Rules will be substituted by the following rules:- "PROCUREMENT OF GOODS Rule 124. This
chapter contains the general rules applicable to all Ministries or Departments, regarding procurement of goods
required for use in the public service. Detailed instructions relating to
procurement of goods may be issued by the procuring departments broadly in
conformity with the general rules contained in this Chapter. Rule 125. Definition of Goods : The
term 'goods' used in this chapter includes all articles, material, commodities, livestock, furniture, fixtures, raw
material, spares, instruments, machinery, equipment, industrial plant etc.
purchased or otherwise acquired for the use of Government but excludes books,
publications, periodicals, etc. for a library. Rule 126. Fundamental principles of
public buying : Every authority delegated with the financial powers of procuring goods in
public interest shall have the responsibility and accountability to bring
efficiency, economy, transparency in matters relating to public
procurement and for fair and equitable treatment of suppliers and promotion of
competition in public procurement. The
procedure to be followed in making public procurement must conform to the
following yardsticks :- (i)
the specifications in terms of
quality, type etc., as also quantity of goods to be procured, should be clearly
spelt out keeping in view the specific needs of the procuring organisations.
The specifications so worked out should meet the basic needs of the
organisation without including superfluous and non-essential features, which may
result in unwarranted expenditure. Care should also be taken to avoid
purchasing quantities in excess of requirement to avoid inventory carrying
costs; (ii) offers
should be invited following a fair, transparent and reasonable procedure; (iii) the
procuring authority should be satisfied that the selected offer adequately
meets the requirement in all respects; (iv) the
procuring authority should satisfy itself that the price of the selected offer
is reasonable and consistent with the quality required; (v)
at each stage of procurement the
concerned procuring authority must place on record, in precise terms, the
considerations which weighed with it while taking the procurement decision. Rule 127. Authorities competent to
purchase goods : An authority which is competent to incur contingent expenditure may
sanction the purchase of goods required for use in public service in accordance
with Appendix 5, Compendium of Financial Delegations and Bihar Stationary
Manual, following the general procedure contained in the following rules. Rule 128. Powers for procurement of
goods : The Departments have been delegated full powers to make their own arrangements for procurement of goods. In
case however, a Department does not have the required expertise, it may
purchase through the Central Purchase Organisation (e.g. DGS&D) or State
Purchase Organisation with the approval of competent authority. The purchase
shall be done on direct payment basis and not on book transfer basis. Rule 129.?????? Designation of State Purchase Organisation: State
Government can designate one or more organizations as State Purchase
Organisation for the procurement of any particular class of goods keeping in
view the expertise developed or to be developed. Rule 130. Rate Contract : The
State Purchase Organisation shall conclude rate contracts with the registered suppliers, for goods and items of standard
types, which are identified as common user items and are needed on recurring
basis by various Departments. Definition
of Registered suppliers is given in Rule
131 below. The State Purchase Organisation will furnish and update all the
relevant details of the rate contracts in its web site. The Departments shall
follow those rate contracts to the maximum extent possible on direct payment
basis and not on book transfer basis. Rule 131. Registration of Suppliers
: (i)
With a view to establishing reliable
sources for procurement of goods commonly required for Government use, the
State Purchase Organisation will prepare and maintain item-wise lists of
eligible and capable suppliers. Such approved suppliers will be known as
"Registered Suppliers". All Departments may utilize these lists as
and when necessary. Such registered suppliers are prima facie eligible for
consideration for procurement of goods through Limited Tender Enquiry. They are
also ordinarily exempted from furnishing bid security along with their bids. A
Head of Department may also register suppliers of goods which are specifically
required by that Department or Office. (ii)
Credentials, manufacturing
capability, quality control systems, past performance, after-sales service,
financial background etc. of the supplier(s) should be carefully verified
before registration. (iii)
The supplier(s) will be registered
for a fixed period (between 1 to 3 years) depending on the nature of the goods.
At the end of this period, the registered supplier(s) willing to continue with
registration are to apply afresh for renewal of registration. New supplier(s)
may also be considered for registration at any time, provided they fulfil all
the required conditions. (iv)
Performance and conduct of every
registered supplier is to be watched by the concerned Department. The
registered supplier(s) are liable to be removed from the list of approved
suppliers if they fail to abide by the terms and conditions of the registration
or fail to supply the goods on time or supply substandard goods or make any
false declaration to any Government agency or for any ground which, in the
opinion of the Government, is not in public interest. Rule 131A. Enlistment of Indian
Agents : As per the Compulsory Enlistment Scheme of the Department of Expenditure, Ministry of
Finance, Government of India it is compulsory for Indian agents, who desire to
quote directly on behalf of their foreign principals, to get themselves enlisted
with the Central Purchase Organisation (eg. DGS&D). Such Indian agents will
have to get themselves registered with State Purchase Organisation. However,
such enlistment is not equivalent to registration of suppliers as mentioned
under Rule 131 above. Rule 131B. Price Preference and
other concessions for public sector and state suppliers: A
maximum of 2 (two) percent price preference will be given to the goods produced
by the large/medium industries (including Public Sector Undertakings) located
and registered in the State over the goods produced by the large/medium
industries located outside the State of Bihar . Similarly, 7 (seven) percent
price preference will be given to the goods produced by the small scale units
located and permanently registered in the State of Bihar over the goods
produced by the small/medium/large industries located outside the State. While
giving price preference, no relaxation is to made in terms of quality and
specifications. The small scale units located in Bihar shall not be liable to
deposit earnest money. They will have to deposit only 20 percent of the general
security amount. however, after receiving the purchase order, if they fail to
supply the goods, without any appropriate reason, they will be blacklisted as
per the procedure laid down. Rule 131C. Purchase of goods without
quotation : Purchase of goods upto the value of
Rs. 15,000/- (Rupees Fifteen
Thousand) only on each occasion may be made without inviting quotations or bids
on the basis of a certificate to be recorded by the competent authority in the
following format. "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." Rule 131D. Purchase of goods by
purchase committee : Purchase of goods costing above Rs. 15,000/- (Rupees Fifteen Thousand)
only and upto Rs. 1,00,000/- (Rupees One lakh) only on each occasion may be
made on the recommendations of a duly constituted Local Purchase Committee
consisting of three members of an appropriate level as decided by the Head of
the Department. The committee will survey the market to ascertain the
reasonableness of rate, quality and specifications and identify the appropriate
supplier. Before recommending placement of the purchase order, the members of
the committee will jointly record a certificate as under. "Certified
that we _____________________, members of the purchase committee are jointly and
individually satisfied that the goods recommended for purchase are of the
requisite specification and quality, priced at the prevailing market rate and
the supplier recommended is reliable and competent to supply the goods in
question. " Rule 131E. Purchase of goods
directly under rate contract : (1) In
case a Department directly procures Central Purchase Organisation (e.g.
DGS&D)/Sate Purchase Organisation rate contracted goods from suppliers, the
prices to be paid for such goods shall not exceed those stipulated in the rate
contract and the other salient terms and conditions of the
purchase should be in line with those specified in the rate contract. The
Department shall make its own arrangement for inspection and testing of such
goods where required. (2) The
State Purchase Organisation (e.g. DGS&D) should host the specifications,
prices and other salient details of different rate contracted items,
appropriately updated, on the web site for use by the procuring Department. Rule 131F. A
demand for goods should not be divided into small quantities to make piece meal purchases to avoid the necessity
of obtaining the sanction of higher authority required with reference to the
estimated value of the total demand. Rule 131G. Purchase of goods by
obtaining bids: Except in cases covered under Rule 131C, 131D and 131E(1), Departments
shall procure goods under the powers referred to in Rule 128 above by following the standard method of obtaining bids
in : (i)
Advertised Tender Enquiry; (ii) Limited
Tender Enquiry; (iii) Single
Tender Enquiry. Rule 131H. Advertised Tender
Enquiry. (i)
Subject to exceptions incorporated
under Rules 131I and 131J,
invitation to tenders by advertisement should be used for procurement of goods
of estimated value Rs. 25 lakh (Rupees Twenty Five Lakh) and above.
Advertisement in such case should be given in the Indian Trade Journal (ITJ),
published by the Director General of Commercial Intelligence and Statistics,
Kolkata and at least in one national daily having wide circulation. (ii) An
organisation having its own web site should also publish all its advertised
tender enquiries on the web site and provide a link with NIC web site. It
should also give its web site address in the advertisements in ITJ and
newspapers. (iii) The
organisation should also post the complete bidding document in its web site and
permit prospective bidders to make use of the document downloaded from the web
site. If such a downloaded bidding document is priced, there should be clear
instructions for the bidder to pay the amount by demand draft etc. along with
the bid. (iv) Where
the Department feels that the goods of the required quality, specifications
etc., may not be available in the country and it is necessary to also look for
suitable competitive offers from abroad, the Department may send copies of the
tender notice to the Indian embassies abroad as well as to the foreign
embassies in India. The selection of the embassies will depend on the
possibility of availability of the required goods in such countries. (v) Ordinarily,
the minimum time to be allowed for submission of bids should be three weeks
from the date of publication of the tender notice or availability of the
bidding document for sale, whichever is later.Where the department also
contemplates obtaining bids from abroad, the minimum period should be kept as
four weeks for both domestic and foreign bidders. Rule 131I. Limited Tender Enquiry. (i)
This method may be adopted when
estimated value of the goods to be procured is up to Rupees Twenty-five Lakhs.
Copies of the bidding document should be sent directly by speed post/registered
post/courier/e-mail to firms which are borne on the list of registered
suppliers for the goods in question as referred under Rule 131 above. The number of supplier firms in Limited Tender
Enquiry should be more than three. Further, web based publicity should be given
for limited tenders. Efforts should be made to identify a higher number of
approved suppliers to obtain more responsive bids on competitive basis. (ii) Purchase
through Limited Tender Enquiry may be adopted even where the estimated value of
the procurement is more than Rupees twenty five Lakhs, in the following
circumstances. (a)
The competent authority in the
Department certifies that the demand is urgent and any additional expenditure
involved by not procuring through advertised tender enquiry is justified in view of urgency. The Department should also put on record
the nature of the urgency and reasons why the procurement could not be
anticipated. (b)
There are sufficient reasons, to be
recorded in writing by the competent authority, indicating that it will not be
in public interest to procure the goods through advertised tender enquiry. (c)
The sources of supply are definitely
known and possibility of fresh source(s) beyond those being tapped, is remote. (iii) Sufficient
time should be allowed for submission of bids in Limited Tender Enquiry cases. Rule 131J. Two bid system : For
purchasing high value plant, machinery etc. of a complex and technical nature,
bids may be obtained in two parts as under :- (a)
Technical bid consisting of all
technical details alongwith commercial terms and conditions; and (b)
Financial bid indicating item-wise
price for the items mentioned in the technical bid. The technical bid and the financial bid should be sealed by
the bidder in separate covers duly superscribed and both these sealed covers
are to be put in a bigger cover which should also be sealed and duly
superscribed. The technical bids are to be opened by the purchasing Department
at the first instance and evaluated by a competent committee or authority. At
the second stage financial bids of only the technically acceptable offers
should be opened for further evaluation and ranking before awarding the
contract. Rule 131K. Late Bids : In
the case of advertised tender enquiry or limited tender enquiry, late bids (i.e. bids received after the
specified date and time for receipt of bids) should not be considered. Rule 131L. Single Tender Enquiry. Procurement
from a single source may be resorted to in the following circumstances : (i)
It is in the knowledge of the user
department that only a particular firm is the manufacturer of the required
goods. (ii) In
a case of emergency, the required goods are necessarily to be purchased from a
particular source and the reason for such decision is to be recorded and
approval of competent authority obtained. (iii) For
standardisation of machinery or spare parts to be compatible to the existing
sets of equipment (on the advice of a competent technical expert and approved
by the competent authority), the required item is to be purchased only from a
selected firm. Note
: Proprietary Article Certificate in the following form is to be provided by
the Department before procuring the goods from a single source under the
provision of sub Rule 131L (i) and 131L (iii) as applicable. (i)
The indented goods are manufactured
by M/s??..??????.. (ii)
No other make or model is acceptable
for the following reasons : ?????????. ?????????. ?????????. (iii)
Concurrence of internal finance
wing/Finance Department to the proposal vide : ??????.. (iv) Approval
of the competent authority vide :????????? ________________________ ________________________ (Signature
with date and designation of the procuring officer)' Rule 131M. Contents of Bidding
Document : All the terms, conditions, stipulations and information to be incorporated in the
bidding document are to be shown in the appropriate chapters as below :- Chapter ? 1 : Instructions to Bidders. Chapter
? 2 : Conditions of Contract. Chapter
? 3 : Schedule of Requirements. Chapter
? 4 : Specifications and allied Technical Details. Chapter
? 5 : Price Schedule (to be utilised by the bidders for quoting their prices). Chapter
? 6 : Contract Form. Chapter
? 7 : Other Standard Forms, if any, to be utilised by the purchaser and the
bidders. Rule 131N. Maintenance Contract : Depending
on the cost and nature of the goods to be
purchased, it may also be necessary to enter into maintenance contract(s)
of suitable period either with the supplier of the goods or with any other
competent firm, not necessarily the supplier of the subject goods. Such
maintenance contracts are especially needed for sophisticated and costly
equipment and machinery. It may however be kept in mind that the equipment or
machinery is maintained free of charge by the supplier during its warranty
period or such other extended periods as the contract terms may provide and the
paid maintenance should commence only thereafter. Rule 131O. Bid Security : (i)
To safeguard against a bidder?s
withdrawing or altering its bid during the bid validity period in the case of
advertised or limited tender enquiry, Bid Security (also known as Earnest
Money) is to be obtained from the bidders except those who are registered with
the Central Purchase Organisation/State Purchase Organisation, National Small
Industries Corporation (NSIC) or the concerned??????? Department.
The bidders should be asked to furnish bid security along with their bids.
Amount of bid security should ordinarily range between two percent to five
percent of the estimated value of the goods to be procured. The exact amount of
bid security, should be determined accordingly by the Department and indicated
in the bidding documents. The bid security may be accepted in the form of
Account Payee Demand Draft, Fixed Deposit Receipt, Banker's Cheque or Bank
Guarantee from any of the commercial banks in an acceptable form, safeguarding
the purchaser's interest in all respects. The bid security is normally to
remain valid for a period of forty-five days beyond the final bid validity
period. (ii)
Bid securities of the unsuccessful
bidders should be returned to them at the earliest after expiry of the final
bid validity and latest on or before the 30th day after the award of the
contract. Rule 131P. Performance Security : (i)
To ensure due performance of the
contract, Performance Security is to be obtained from the successful bidder
awarded the contract. Performance Security is to be obtained from every
successful bidder irrespective of its registration status etc. Performance
Security should be for an amount of five to ten per cent. of the value of the
contract. Performance Security may be furnished in the form of an Account payee
Demand Draft, Fixed Deposit Receipt from a Commercial bank, Bank Guarantee from
a Commercial bank in an acceptable form safeguarding the purchasers interest in
all respects. (ii) Performance
Security should remain valid for a period of sixty days beyond the date of
completion of all contractual obligations of the supplier including warranty
obligations. (iii) Bid
security should be refunded to the successful bidder on receipt of Performance
Security. Rule 131Q. (1) Advance payment to supplier : Ordinarily,
payments for services rendered or supplies
made should be released only after the services have been rendered or
supplies made. However, it may become necessary to make advance payments in the
following types of cases :- ?????????????????????????????????????????????????? (i)
Advance payment demanded by firms
holding maintenance contracts for servicing of Air-conditioners, computers,
other costly equipment, etc. (ii)
Advance payment demanded by firms
against fabrication contracts, turn-key contracts etc. Such advance payments
should not exceed the following limits : (i)
Thirty per cent. of the contract
value to private firms; (ii) Forty
per cent. of the contract value to a State or Central Government agency or a
Public Sector Undertaking; or (iii) in
case of maintenance contract, the amount should not exceed the amount payable
for six months under the contract. Departments
may relax, in consultation with Internal Finance Advisor/Finance Department
concerned, the ceilings(including percentage laid down for advance payment for
private firms) mentioned above. While making any advance payment as above,
adequate safeguards in the form of bank guarantee etc should be obtained from
the firm. (2) Part payment to suppliers : Depending on the terms of
delivery incorporated in a contract,
part payment to the supplier may be released after it despatches the goods from
its premises in terms of the contract. Rule 131R. Transparency,
competition, fairness and elimination of arbitrariness in the procurement
process : All government purchases should be made in a transparent, competitive and fair manner, to secure
best value for money. This will also enable the prospective bidders to
formulate and send their competitive bids with confidence. Some of the measures
for ensuring the above are as follows:- (i)
the text of the bidding document
should be self-contained and comprehensive without any ambiguities. All
essential information, which a bidder needs for sending responsive bid, should
be clearly spelt out in the bidding document in simple language. The bidding
document should contain, inter alia; (a)
the criteria for eligibility and
qualifications to be met by the bidders such as minimum level of experience,
past performance, technical capability, manufacturing facilities and financial
position etc.; (b)
eligibility criteria for goods
indicating any legal restrictions or conditions about the origin of goods etc
which may required to be met by the successful bidder; (c)
the procedure as well as date, time
and place for sending the bids; (d)
date, time and place of opening of
the bid; (e)
terms of delivery; (f) special
terms affecting performance, if any. (ii)
Suitable provision should be kept in
the bidding document to enable a bidder to question the bidding conditions,
bidding process and/ or rejection of its bid. (iii)
Suitable provision for settlement of
disputes, if any, emanating from the resultant contract, should be kept in the
bidding document. (iv)
The bidding document should indicate
clearly that the resultant contract will be interpreted under Indian Laws. (v)
The bidders should be given
reasonable time to send their bids. (vi)
The bids should be opened in public
and authorised representatives of the bidders should be permitted to attend the
bid opening. (vii)
The specifications of the required
goods should be clearly stated without any ambiguity so that the prospective
bidders can send meaningful bids. In order to attract sufficient number of
bidders, the specification should be general and broad based to the extent
feasible. Efforts should also be made to use standard specifications which are
widely known to the industry. (viii)
(Pre-bid conference : In case of
turn-key contract(s) or contract(s) of special nature for procurement of
sophisticated and costly equipment, a suitable provision is to be kept in the
bidding documents for a pre-bid conference for clarifying issues and clearing
doubts, if any, about the specifications and other allied technical details of
the plant, equipment and machinery projected in the bidding document. The date,
time and place of pre-bid conference should be indicated in the bidding
document. This date should be sufficiently ahead of bid opening date. (ix) Criteria
for determining responsiveness of bids, criteria as well as factors to be taken
into account for evaluating the bids on a common platform and the criteria for
awarding the contract to the responsive lowest bidder should be clearly
indicated in the bidding documents. (x)
Bids received should be evaluated in
terms of the conditions already incorporated in the bidding documents; no new
condition which was not incorporated in the bidding documents should be brought
in for evaluation of the bids. Determination of a bid's responsiveness should
be based on the contents of the bid itself without recourse to extrinsic
evidence. (xi)
Bidders should not be permitted to
alter or modify their bids after expiry of the deadline for receipt of bids. (xii)
Negotiation with bidders after bid
opening must be severely discouraged. However, in exceptional circumstances
where price negotiation against an ad-hoc procurement is necessary due to some
unavoidable circumstances, the same may be resorted to only with the lowest
evaluated responsive bidder (xiii)
In the rate contract system, where a
number of firms are brought on rate contract for the same item, negotiation as
well as counter offering of rates are permitted with the bidders in view and
for this purpose special permission should be given to the State Purchase
Organisation. (xiv) Contract
should ordinarily be awarded to the lowest evaluated bidder whose bid has been
found to be responsive and who is eligible and qualified to perform the
contract satisfactorily as per the terms and conditions incorporated in the
corresponding bidding document. However, where the lowest acceptable bidder
against ad-hoc requirement is not in a position to supply the full quantity
required, the remaining quantity, as far as possible, be ordered from the next
higher responsive bidder at the rates offered by the lowest responsive bidder. (xv)
The name of the successful bidder
awarded the contract should be mentioned in the Departments notice board or
bulletin or web site 66. Rule 131S. Efficiency, Economy and
Accountability in Public Procurement System : Public
procurement procedure is also to ensure efficiency, economy and accountability
in the system. To achieve the same, the following keys areas should be
addressed :- (i)
To reduce delay, appropriate time
frame for each stage of procurement should be prescribed by the Department.
Such a time frame will also make the concerned purchase officials more alert. (ii) To
minimise the time needed for decision making and placement of contract, every
Department, with the approval of the competent authority, may delegate,
wherever necessary, appropriate purchasing powers to the lower functionaries. (iii)
The Departments should ensure
placement of contract within the original validity of the bids. Extension of
bid validity must be discouraged and resorted to only in exceptional
circumstances. (iv) The
designated State Purchase Organisation(s) should bring into the rate contract system
more and more common user items which are frequently needed in bulk by various
Government departments. (v)
The State Purchase Organisation
should also ensure that the rate contracts remain available without any break. Rule 131T. Buy-Back Offer : When
it is decided with the approval of the competent authority to replace an
existing old item(s) with a new and better version, the department may trade
the existing old item while purchasing the new one. For this purpose, a
suitable clause is to be incorporated in the bidding document so that the
prospective and interested bidders formulate their bids accordingly. Depending
on the value and condition of the old item to be traded, the time as well as
the mode of handing over the old item to the successful bidder should be decided
and relevant details in this regard suitably incorporated in the bidding
document. Further, suitable provision should also be kept in the bidding
document to enable the purchaser either to trade or not to trade the item while
purchasing the new one. Rule 131U. The
Departments may hire external professionals, consultancy firms or consultants (referred to as consultant
hereinafter) for a specific job, which is well defined in terms of content and
time frame for its completion or outsource certain services. Rule 131V. This
chapter contains the fundamental principles applicable to all Departments regarding engagement of consultant(s)
and outsourcing of services. Detailed instructions to this effect may be issued
by the concerned Ministries or Departments. However, the Departments shall
ensure that they do not contravene the basic rules contained in this chapter. Rule 131W. Identification of Work /
Services required to be performed by Consultants : Engagement
of consultants may be resorted to in situations requiring high quality services
for which the concerned Department
does not have requisite expertise. Approval of the competent authority should
be obtained before engaging consultant(s). Rule 131X. Preparation of scope of
the required work / service : The Departments should prepare in simple and concise language
the requirement, objectives and the scope of the assignment. The eligibility
and pre-qualification criteria to be met by the consultants should also be
clearly identified at this stage. Rule 131Y. Estimating reasonable
expenditure : Department proposing to engage consultant(s) should estimate
reasonable expenditure for the same by ascertaining the prevalent market
conditions and consulting other organisations engaged in similar activities. Rule 131Z. Identification of likely
sources : (i)
Where the estimated cost of the work
or service is upto Rupees twenty-five lakhs, preparation of a long list of
potential consultants may be done on the basis of formal or informal enquiries
from other Departments or Organisations involved in similar activities,
Chambers of Commerce & Industry, Association of consultancy firms etc. (ii) Where
the estimated cost of the work or service is above Rupees twenty-five lakhs, in
addition to (i) above, an enquiry for seeking ?Expression of Interest? from
consultants should be published in at least one national daily and the
Department's web site. The web site address should also be given in the
advertisements. Enquiry for seeking Expression of Interest should include in
brief, the broad scope of work or service, inputs to be provided by the
Department, eligibility and the pre-qualification criteria to be met by the
consultant(s) and consultant?s past experience in similar work or service. The consultants
may also be asked to send their comments on the objectives and scope of the
work or service projected in the enquiry.Adequate time should be allowed for
getting responses from interested consultants Rule 131ZA. Short listing of consultants
: On the basis of responses received from the interested parties as per Rule 131Z above, consultants meeting
the requirements should be short listed for further consideration. The number
of shortlisted consultants should not be less than three. Rule 131ZB. Preparation of Terms of
Reference (TOR) : The TOR should include (i)
Precise statement of objectives; (ii) Outline
of the tasks to be carried out; (iii) Schedule
for completion of tasks; (iv) The
support or inputs to be provided by the Department to facilitate the
consultancy. (v) The
final outputs that will be required of the Consultant; Rule 131ZC. Preparation and Issue of
Request for Proposal (RFP) : RFP is the document
to be used by the Department for obtaining offers from the consultants for the
required work / service. The RFP should be issued to the shortlisted
consultants to seek their technical and financial proposals. The RFP should
contain : (i)
A letter of Invitation (ii) Information
to Consultants regarding the procedure for submission of proposal . (iii) Terms
of Reference (TOR). (iv) Eligibility
and pre-qualification criteria incase the same has not been ascertained through
Enquiry for Expression of Interest. (v) List
of key position whose CV and experience would be evaluated. (vi) Bid
evaluation criteria and selection procedure. (vii) Standard
formats for technical and financial proposal. (viii)Proposed
contract terms. (ix) Procedure
proposed to be followed for midterm review of the progress of the work and
review of the final draft report. Rule 131ZD. Receipt and opening of
proposals : Proposals should ordinarily be asked
for from consultants in ?Two-bid?
system with technical and financial bids sealed separately. The bidder should
put these two sealed envelops in a bigger envelop duly sealed and submit the
same to the Department by the specified date and time at the specified place.
On receipt, the technical proposals should be opened first by the Department at
the specified date, time and place. Rule 131ZE. Late Bids : Late
bids i.e. bids received after the specified date and time of receipt, should not be considered. Rule 131ZF. Evaluation of Technical
Bids : Technical bids should be analysed and evaluated by a Consultancy Evaluation Committee
(CEC) constituted by the Department. The CEC shall record in detail the reasons
for acceptance or rejection of the technical proposals analysed and evaluated
by it. Rule 131ZG. Evaluation of Financial
Bids of the technically qualified bidders : The Department
shall open the financial bids of only those bidders who have been declared
technically qualified by the Consultancy Evaluation Committee as per Rule 131ZF above for further analysis
or evaluation and ranking and selecting the successful bidder for placement of
the consultancy contract. Rule 131ZG. Consultancy by
nomination : Under some special circumstances, it
may become necessary to select a
particular consultant where adequate justification is available for such
single-source selection in the context of the overall interest of the
Department. Full justification for single source selection should be recorded
in the file and approval of the competent authority obtained before resorting
to such single-source selection. Rule 131ZH. Monitoring the Contract
: The Department should be involved throughout in the conduct of consultancy, preferably
by taking a task force approach and continuously monitoring the performance of
the consultant(s) so that the output of the consultancy is in line with the
Department?s objectives. ?OUTSOURCING OF SERVICES Rule 131ZI. Outsourcing of Services
: A Department may outsource certain services in the interest of economy and efficiency and
it may prescribe detailed instructions and procedures for this purpose without,
however, contravening the following basic guidelines. Rule 131ZJ. Identification of likely
contractors : The Departmentshould prepare a list
of likely and potential contractors
on the basis of formal or informal enquiries from other Ministries or
Departments and Organisations involved in similar activities, scrutiny of
?Yellow pages?, and trade journals, if available, web site etc. Rule 131ZK. Preparation of Tender
enquiry : Department should prepare a tender enquiry containing, inter alia : (i)
The details of the work or service
to be performed by the contractor; (ii) The
facilities and the inputs which will be provided to the contractor by the? Department; (iii) Eligibility
and qualification criteria to be met by the contractor for performing the
required work / service; and (iv) The
statutory and contractual obligations to be complied with by the contractor. Rule 131ZL. Invitation of Bids : (a)
For estimated value of the work or
service upto Rupees ten lakhs or less : The Department should scrutinise the preliminary list of likely contractors as
identified as per Rule 131ZJ above,
decide the prima facie eligible and capable contractors and issue limited
tender enquiry to them asking for their offers by a specified date and time
etc. as per standard practice. The number of the contractors so identified for
issuing limited tender enquiry should not be less than six. (b) For
estimated value of the work or service above Rupees ten lakhs: The
Department should issue advertised tender enquiry asking for the offers by a
specified date and time etc. in at least one popular largely circulated
national newspaper and web site of the Department. Rule 131ZM. Late Bids : Late
bids i.e. bids received after the specified date and time of receipt, should not be considered. Rule 131ZN. Evaluation of Bids
Received : The Department should evaluate, segregate, rank the responsive bids and select
the successful bidder for placement of the contract. Rule 131ZO. Outsourcing by Choice : Should
it become necessary, in an exceptional situation
to outsource a job to a specifically chosen contractor, the Competent Authority
in the Department may do so in consultation with the Internal Financial
Adviser. In such cases the detailed justification, the circumstances leading to
the outsourcing by choice and the special interest or purpose it shall serve
shall form an integral part of the proposal. Rule 131ZP. Monitoring the Contract
: The Department should be involved throughout in the conduct of the contract and
continuously monitor the performance of the contractor. Appendix
8 of the Bihar Finance Rules will be deleted. The
title of Chapter 8?? "Receipts of
Stores" of the Bihar Finance Rules will be substituted by "Inventory
Management" Rules
132 to 153 of the Bihar Finance Rules will be substituted by the rules which
are as follows :- "Rule 132. This
chapter contains the basic rules applicable to all Ministries or Departments regarding inventory management.
Detailed instructions and procedures relating to inventory management
may be prescribed by various Ministries or Departments broadly in conformity
with the basic rules contained in this chapter. Rule 133. Receipt of goods and
materials from private suppliers : (1) While
receiving goods and materials from a supplier, the officer?incharge of stores
should refer to the relevant contract terms and follow the prescribed procedure
for receiving the materials. (2) All
materials shall be counted, measured or weighed and subjected to visual
inspection at the time of receipt to ensure that the quantities are correct,
the quality is according to the required specifications and there is no damage
or deficiency in the materials.
Technical inspection where required should be carried out at this stage by
Technical Inspector or Agency approved for the purpose. An appropriate receipt,
in terms of the relevant contract provisions may also be given to the supplier
on receiving the materials. (3) Details
of the material so received should thereafter be entered in the appropriate
stock register. The officer-in-charge of stores should certify that he has
actually received the material and recorded it in the appropriate stock
registers. Rule 134. Receipt / issue of goods
and materials from internal divisions of the same organisation : (1) The
indenting officer requiring goods and materials from internal division(s) of
the same organisation should project an indent in the prescribed form for this
purpose. While receiving the supply against the indent, the indenting officer
shall examine, count, measure or weigh the materials as the case may be, to
ensure that the quantities are correct, the quality is in line with the
required specifications and there is no damage or deficiency in the materials.
An appropriate receipt shall also be given to this effect by the indenting
officer to the division sending the materials. (2) In
the case of issue of materials from stock for departmental use, manufacture,
sale, etc., the Officer-in-charge of the stores shall see that an appropriate
indent, in the prescribed form has been projected by the indenting officer. A
written acknowledgement of receipt of material issued shall be obtained from
the indenting officer or his authorised representative at the time of issue of
materials. (3)
In case of materials issued to a
contractor, the cost of which is recoverable from the contractor, all relevant
particulars, including the recovery rates and the total value chargeable to the
contractor should be got acknowledged from the contractor duly signed and
dated. (4) If
the Officer-in-charge of the stores is unable to comply with the indent in
full, he should make the supply to the extent available and make suitable entry
to this effect in the indentor?s copy of the indent. In case alternative
materials are available in lieu of the indented
materials, a suitable indication to this effect may be made in the document. Rule 135. Custody of goods and
materials : The officer-in-charge of stores
having custody of goods and
materials, especially valuable and / or combustible articles, shall take
appropriate steps for arranging their safe custody, proper storage
accommodation, including arrangements for maintaining required temperature,
dust free environment etc. Rule 136. Lists and Accounts : (1) The
Officer-in-charge of stores shall maintain suitable item-wise lists and
accounts and prepare accurate returns in respect of the goods and materials in
his charge making it possible at any point of time to check the actual balances
with the book balances. The
form of the stock accounts mentioned above shall be determined with reference
to the nature of the goods and materials, the frequency of the transactions and
the special requirements of the concerned Ministries /Departments. (2)
Separate accounts shall be kept for (i)
Fixed Assets such as plant,
machinery, equipment, furniture, fixtures etc. in the Form F.R. - 5A. (ii)
Consumables such as office
stationery, chemicals, maintenance spare parts etc. in the Form F.R. - 5B. (iii) Library
books in the Form? F.R. 5C (iv) Assets
of historical / artistic value held by museum / government departments in the
Form F.R. - 5D. Note :
These forms can be supplemented with additional details by Departments as
required. Rule 137. Hiring out of Fixed Assets
: When a fixed asset is hired to local bodies, contractors or others, proper record should be
kept of the assets and the hire and other charges as determined under rules
prescribed by the competent authority, should be recovered regularly.
Calculation of the charges to be recovered from the local bodies, contractors
and others as above should be based on the historical cost. Rule 138. (1) Physical verification of Fixed
Assets : The inventory for fixed assets shall ordinarily be maintained at site. Fixed assets
should be verified at least once in a year and the outcome of the verification
recorded in the corresponding register. Discrepancies, if any, shall be
promptly investigated and brought to account. (2) Verification of Consumables : A
physical verification of all the consumable goods and materials should be undertaken at least once in a year and
discrepancies, if any, should be recorded in the stock register for appropriate
action by the competent authority. (3) Procedure for verification : (i)
Verification shall always be made in
the presence of the officer, responsible for the custody of the inventory being
verified. (ii)
A certificate of verification
alongwith the findings shall be recorded in the stock register. (iii)
Discrepancies, including shortages,
damages and unserviceable goods, if any, identified during verification, shall
immediately be brought to the notice of the competent authority for taking
appropriate action in accordance with provision given in Rule 31 to 35. Rule 139. Buffer Stock : Depending
on the frequency of requirement and quantity thereof as well as the pattern of supply of a consumable material, optimum
buffer stock should be determined by the competent authority. Note
: As the inventory carrying cost is an expenditure that does not add value to
the material being stocked, a material remaining in stock for over a year shall
generally be considered surplus, unless adequate reasons to treat it otherwise
exist. Rule 140. Physical verification of
Library books : (i)
Complete physical verification of
books should be done every year in case of libraries having not more than
twenty thousand volumes. For libraries having more than twenty thousand volumes
and upto fifty thousand volumes, such verification should be done at least once
in three years. Sample physical verification at intervals of not 74 more than
three years should be done in case of libraries having more than fifty thousand
volumes. In case such a verification reveals unusual or unreasonable shortages,
complete verification shall be done. (ii) Loss
of five volumes per one thousand volumes of books issued / consulted in a year
may be taken as reasonable provided such losses are not attributable to
dishonesty or negligence. However, loss of a book of a value exceeding Rs.
1,000/- (Rupees One thousand only) and rare books irrespective of value shall
invariably be investigated and appropriate action taken. Rule 141. Transfer of charge of
goods, materials etc. : In case of transfer of Officer-in-charge
of the goods, materials etc., the transferred officer shall see that the goods
or material are made over correctly to his successor. A statement giving all
relevant details of the goods, materials etc., in question shall be prepared
and signed with date by the relieving officer and the relieved officer. Each of
these officers will retain a copy of the signed statement. Rule 142. Disposal of Goods. (i) An
item may be declared surplus or obsolete or unserviceable if the same is of no
use to the Department. The reasons for declaring the item surplus or obsolete
or unserviceable should be recorded by the authority competent to purchase the
item. (ii) The
competent authority may, at his discretion, constitute a committee at
appropriate level to declare item(s) as surplus or obsolete or unserviceable. (iii) The
book value, guiding price and reserved price, which will be required while
disposing of the surplus goods, should also be worked out. In case where it is
not possible to work out the book value, the original purchase price of the
goods in question may be utilised. A report of stores for disposal shall be
prepared in Form F.R. - 5E. (iv) In
case an item becomes unserviceable due to negligence, fraud or mischief on the
part of a Government servant, responsibility for the same should be fixed. Rule 143. Modes of Disposal : (i) Surplus
or obsolete or unserviceable goods of assessed residual value above Rupees Two
Lakh should be disposed of by : (a)
obtaining bids through advertised
tender or (b)
public auction. (ii)
For surplus or obsolete or
unserviceable goods with residual value less than Rupees Two Lakh, the mode of
disposal will be determined by the competent authority, keeping in view the
necessity to avoid accumulation of such goods and consequential blockage of space
and, also,deterioration in value of goods to be disposed of. (iii)
Certain surplus or obsolete or
unserviceable goods such as expired medicines, food grain, ammunition etc.,
which are hazardous or unfit for human consumption, should be disposed of or
destroyed immediately by adopting suitable mode so as to avoid any health
hazard and / or environmental pollution and also the possibility of misuse of
such goods. (iv)
Surplus or obsolete or unserviceable
goods, equipment and documents, which involve security concerns (e.g. currency,
negotiable instruments, receipt books, stamps, security press etc.) should be
disposed of / destroyed in an appropriate manner to ensure compliance with
rules relating to official secrets as well as financial prudence. Rule 144. Disposal through
Advertised Tender. (i)
The broad steps to be adopted for
this purpose are as follows : a)
Preparation of bidding documents. b)
Invitation of tender for the surplus
goods to be sold. c)
Opening of bids. d)
Analysis and evaluation of bids
received. e)
Selection of highest responsive
bidder. f)
Collection of sale value from the
selected bidder. g)
Issue of sale release order to the
selected bidder. h)
Release of the sold surplus goods to
the selected bidder. i)
Return of bid security to the
unsuccessful bidders. (ii)
The important aspects to be kept in
view while disposing the goods through advertised tender are as under :- (i)
The basic principle for sale of such
goods through advertised tender is ensuring transparency, competition, fairness
and elimination of discretion. Wide publicity should be ensured of the sale
plan and the goods to be sold. All the required terms and conditions of sale
are to be incorporated in the bidding document comprehensively in plain and
simple language. Applicability of taxes, as relevant, should be clearly stated
in the document. (ii) The
bidding document should also indicate the location and present condition of the
goods to be sold so that the bidders can inspect the goods before bidding. (iii) The
bidders should be asked to furnish bid security along with their bids. The
amount of bid security should ordinarily be ten per cent.of the assessed or
reserved price of the goods. The exact bid security amount should be indicated
in the bidding document. (iv) The
bid of the highest acceptable responsive bidder should normally be accepted.
However, if the price offered by that bidder is not acceptable, negotiation may
be held only with that bidder. In case such negotiation does
not provide the desired result, the reasonable or acceptable price may be
counter-offered to the next highest responsive bidder(s). (v) In
case the total quantity to be disposed of cannot be taken up by the highest
acceptable bidder, the remaining quantity may be offered to the next higher
bidder(s) at the price offered by the highest acceptable bidder. (vi) Full
payment, i.e. the residual amount after adjusting the bid security should be
obtained from the successful bidder before releasing the goods. (vii) In
case the selected bidder does not show interest in lifting the goods, the bid
security should be forfeited and other actions initiated including re-sale of
the goods in question at the risk and cost of the defaulter, after obtaining
legal advice. (iii)
Late bids i.e. bids received after
the specified date and time of receipt should not to be considered. Rule 145. Disposal through Auction : (i)
A Department may undertake auction
of goods to be disposed of either directly or through approved auctioneers. (ii) The
basic principles to be followed here are similar to those applicable for
disposal through advertised tender so as to ensure transparency, competition,
fairness and elimination of discretion. The auction plan including details of
the goods to be auctioned and their location, applicable terms and conditions
of the sale etc. should be given wide publicity in the same manner as is done
in case of advertised tender. (iii) While
starting the auction process, the condition and location of the goods to be
auctioned, applicable terms and conditions of sale etc., (as already indicated
earlier while giving vide publicity for the same), should be announced again
for the benefit of the assembled bidders. (iv) During
the auction process, acceptance or rejection of a bid should be announced
immediately on the stroke of the hammer. If a bid is accepted, earnest money
(not less than twenty-five per cent. of the bid value) should immediately be
taken on the spot from the successful bidder either in cash or in the form of
Deposit-at-Call-Receipt (DACR), drawn in favour of the Department selling the
goods. The goods should be handed over to the successful bidder only after
receiving the balance payment. (v) The
composition of the auction team will be decided by the competent authority. The
team should however include an officer of the Internal Finance Wing of the
department. Rule 146. Disposal at scrap value or
by other modes : If a Department is unable to sell
any surplus or obsolete or
unserviceable item in spite of its attempts through advertised tender or
auction, it may dispose off the same at its scrap value with the approval of the
competent authority in consultation with Finance division. In case the
Department is unable to sell the item even at its scrap value, it may adopt any
other mode of disposal including destruction of the item in an eco-friendly
manner. Rule 147. A
sale account should be prepared for goods disposed of in Form F.R. 5F duly signed by the officer who supervised
the sale or auction. Rule 148. (1) Powers to write off : All
profits and losses due to revaluation, stock-taking or other causes shall be duly recorded and adjusted
where necessary. Formal sanction of the competent authority shall be obtained
in respect of losses, even though no formal correction or adjustment in
government accounts is involved. Power to write off of losses are available
under the Compendium of Financial Delegations. (2) Losses due to depreciation : Losses
due to depreciation shall be analyzed, and recorded under following heads, as applicable :- (i)
normal fluctuation of market prices;
(ii)
normal wear and tear; (iii)
lack of foresight in regulating
purchases; and (iv) negligence after purchase. (3)
Losses
not due to depreciation : Losses not due to depreciation shall
be grouped under the following heads
:- (i)
losses due to theft or fraud; (ii)
losses due to neglect; (iii)
anticipated losses on account of
obsolescence of stores or of purchases in excess of requirements; (iv)
losses due to damage, and (v)
losses due to extra ordinary
situations under ?Force Majeure? conditions like fire, flood, enemy action,
etc.;" Rules
199 to 322 of the Bihar Finance Rules will be substituted by the following
rules :- "Rule 199. Original works means
all new constructions, additions and alterations to existing works, special repairs to newly
purchased or previously abandoned buildings or structures, including remodeling
or replacement. Repair works means
works undertaken to maintain building and fixtures. Rule 200. Administrative control of
works includes: (i)
assumption of full responsibility
for construction, maintenance and upkeep; (ii)
proper utilization of buildings and
allied works; (iii)
provision of funds for execution of
these functions. Rule 201. Powers to sanction works :
The powers delegated to various subordinate authorities to accord administrative
approval, sanction expenditure and re-appropriate funds for works are regulated
by the Compendium of of Financial Delegation and other orders contained in the
respective departmental regulations. Rule 202. (1) A
Ministry or Department at its discretion may directly execute repair works
estimated to cost upto Rupees ten
Lakhs after following due procedure indicated in Rule 208. (2) A
Ministry or Department may, at its discretion, assign repair works estimated to
cost above Rupees ten Lakhs and upto
Rupees thirty Lakhs to any Public Works Organisation, which includes State
Public Works Divisions, other Central Government organisations authorised to
carry out civil or electrical works such as Central Public Works Department
(CPWD), Military Engineering Service (MES), Border Roads Organisation etc. or
Public Sector Undertakings set up by the Central or State Government to
carryout civil or electrical works. (3) All
original works costing upto Rupees ten Lakhs may be assigned by the Ministry or Department concerned to a Public Works
Organisations as defined in Rule 202(2). (4) All
original works estimated to cost above Rupees ten Lakhs and repair works
estimated to cost above Rupees
thirty Lakhs may be got executed through a Public Works Organisations as
defined in Rule 202(2) after
consultation with the Building Construction Department. Rule 203. Work under the
administrative control of the Public Works Departments : Works
not specifically allotted to any Ministry or Department shall be included in the Grants for Civil Works to be
administered by Building Construction Department. No such work may be financed
partly from funds provided in departmental budget and partly from the budget
for Civil works as mentioned above. Rule 204. General Rules : Subject
to the observance of these general rules, the initiation, authorization and execution of works allotted to a particular
Ministry or Department shall be regulated by detailed rules and orders
contained in the respective departmental regulations and by other special orders
applicable to them. Rule 205. (1) No
works shall be commenced or liability incurred in connection with it until, - (i)
administrative approval has been
obtained from the appropriate authority in each case; (ii)
sanction to incur expenditure has
been obtained from the competent authority; (iii)
a properly detailed design has been
sanctioned; (iv)
estimates containing the detailed
specifications and quantities of various items have been prepared on the basis
of the Schedule of Rates maintained by PWD or other Public Works Organisations
and sanctioned; (v)
funds to cover the charge during the
year have been provided by competent authority; (vi)
tenders invited and processed in
accordance with rules; (vii)
a Work Order issued. (2) On
grounds of urgency or otherwise, if it becomes necessary to carry out a work or
incur a liability under circumstances when the provisions set out under sub
rule 1 of rule 205 cannot be complied with, the concerned executive officer may
do so on his own judgement and responsibility. Simultaneously,
he should initiate action to obtain approval from the competent authority and
also to intimate the concerned Accounts Officer. (3) Any
development of a project considered necessary while a work is in progress,
which is not contingent on the execution of work as first sanctioned, shall
have to be covered by a supplementary estimate. Rule 206. For
purpose of approval and sanctions, a group of works which forms one project, shall be considered as one work. The
necessity for obtaining approval or sanction of higher authority to a project
which consists of such a group of work should not be avoided because of the
fact that the cost of each particular work in the project is within the powers
of such approval or sanction of a lower authority. This provision, however,
shall not apply in case of works of similar nature which are independent of
each other. Rule 207. Any
anticipated or actual savings from a sanctioned estimate for a definite
project, shall not, without special
authority, be applied to carry out additional work not contemplated in the
original project. Rule 208. Procedure for Execution of
Works : The broad procedure to be followed by a Department for
execution of works under its own arrangements shall be as under :- (i)
the detailed procedure relating to
expenditure on such works shall be prescribed by departmental regulations
framed in consultation with the Finance Department, generally based on the
procedures and the principles underlying the financial and accounting rules
prescribed for similar works carried out by the Public Works Department (PWD); (ii)
preparation of detailed design and
estimates shall precede any sanction for works; (iii)
no work shall be undertaken before
Issue of Administrative Approval and expenditure Sanction by the competent
Authority on the basis of estimates framed; (iv)
open tenders will be called for
works costing Rupees five lakhs to Rupees ten lakhs; (v)
limited tenders will be called for
works costing less than Rupees five lakhs; (vi)
execution of Contract Agreement or
Award of work should be done before commencement of the work; (vii)
final payment for work shall be made
only on the personal certificate of the officer-in-charge of execution of the
work in the format given below: ?
I ???????..??, Executing Officer of (Name of the Work), am personally satisfied
that the work has been executed as per the specifications laid down in the
Contract Agreement and the workmanship is upto the standards followed in the
Industry.? Rule 209. For
original works and repair works entrusted to a 'Public Works Organisation' as defined in Rule 202(2), the administrative approval and expenditure sanction
shall be accorded and funds allotted by the concerned authority under these
rules and in accordance with the Compendium of Financial Delegation. The Public
Works Organisation shall then execute the work entrusted to it in accordance
with the rules and procedures prescribed in that organisation. Rule 210. Review of Projects : After
a project costing Rupees ten crores or above is approved, the Administrative Ministry or Department will set up a Review
Committee consisting of a representative each from the Administrative Ministry,
Finance (Internal Financial Advisor) and the Executing Agency to review the
progress of the work. The Review Committee shall have the powers to accept
variation within 10% of the approved estimates. For works costing less that Rupees ten crores, it will be at the discretion of the
Administrative Department to set up a Review Committee on the above lines. The
following will be inserted as appendix 1A in the Bihar Finance Rules :- "Formula for Price variation
Clause The
formula for Price Variation should originally include a fixed element, a
material element and a labour element. The figures representing the material
element and the labour element should reflect the corresponding proportion of
input costs, while the fixed element may range from 10 to 25%. That portion of
the price represented by the fixed element, will not be subject to variation.
The portions of the price represented by the material element and labour
element alone will attract Price variation. The formula for Price Variation
will thus be : P1
= P0 { F + a(M1/M0) +? b(L1/L0)} - P0 where
P1 is the adjustment amount payable to the supplier (a minus figure
will indicate a reduction in the Contract Price) P0
is the Contract Price at the base level. F
is the Fixed element not subject to Price variation. a
is the assigned percentage to the material element in the Contract price. b
is the assigned percentage to the labour element in the Contract price. L0
and L1 are the wage indices at the base month and year and at the
month and year of calculation respectively. M0
and M1 are the material indices at the base month and year and at
the month and year of calculation respectively. If
more than one major item of material is involved, the material element can be
broken up into two or three components such as Mx, My & Mz. Where price
variation clause has to be provided for services (with insignificant inputs of
materials) as for example in getting Technical assistance normally paid in the
form of per diem rates, the price variation formula should have only two
elements viz. a high fixed element and a labour element. The fixed element can
in such cases be 50% or more, depending on the markup by the supplier of the
per diem rate vis-a-vis the wage rates." By the order of Governor, Bihar Memo
No.-6976F(2) Patna, dated-10-11-2005 Copy forwarded to- The Superintendent,
Government Press, Patna for publication in extraordinary issue of Bihar
Gazette. He is also requested to make arrangement for providing 500 copies of
the Gazette published to this department. Memo
No.-6976F(2)? Patna, dated-10-11-2005 Copy
forwarded to- Chief Secretary, Bihar/ Principal Secretary to
Governor/Development Commissioner/Secretary, Cabinet and Co-ordination
Department/All Commissioners and Secretaries/ All Secretaries/ Resident
Commissioner, Bihar Bhawan/All Divisional Commissioners/ All District
Magistrates/ All Deputy Development Commissioners for information and necessary
action. Memo
No.-6976F(2) Patna, dated-10-11-2005 Copy forwarded to- All concerned officers
for information and necessary action. Memo
No.-6976F(2) Patna, dated-10-11-2005 Copy forwarded to-Accountant General,
Patna for information and necessary action.The Bihar Finance (Amendment)
Rules, 2005
