RESTRICTED
WORLD TRADE S/WPGR/W/11/Add.14
17January 1997
ORGANIZATION(97-0145)
Original: English Working Party onGATS Rules
COMMUNICATION FROM INDIA
Response totheQuestionnaire onGovernment Procurement ofServices
Thefollowing communication isbeing circulated attherequest ofIndia toMembers ofthe
Working Party onGATS Rules.
_______________
I. EXISTING PROCUREMENT REGIMES
Where aMember 'sprocurement regime isdifferent forcentral government entities, sub-central
government entities, andother entities, suchaspublic undertakings (e.g.public utilities), it
would beuseful ifthesedifferences werespecified under eachoftheheadings indicated below.
Definition
1. What isthedefinition ofgovernment procurement employed incompleting this
questionnaire?
Government procurement isdefined astheprocurement made forandonbehalf ofthe
Government.ThisincludesCentralGovernment,StateGovernments,PublicSectorundertakings
andPublic bodies.
Administrative structure
2. Howaregovernment procurement activities administered? Towhatextent areprocurement
activities centralized? Please specify theidentity ofanycentral procurement agencies and
theirrespective responsibilities.
EachGovernment Department hasanadministrative structure tolookaftertheirprocurement
activity, andassistance ofanoutside agency issought whenever necessary. Purchases bythe
Governmentaredecentralized,exceptcommonuseritemsforwhichRateContractsareconcluded
bytheDirectorateGeneralofSuppliesandDisposals(DGS&D),thecentralpurchaseorganisation
oftheGovernment. Thisorganisation inaddition toRateContracts alsoentertains requests
from Central Government, State Governments andpublic bodies forprocuring theiradhoc
requirements.S/WPGR/W/11/Add.14
Page2
Laws andRegulations inforce
3.(a) Please specify thelaws, regulations, rules, guidelines, decrees, decisions andother measures
governing government procurement. What isthescope oftheirapplication? Inparticular,
please describe anyexemptions thatexist. Please provide abrief summary ofthecontent
ofeachofthese measures.
Thepurchases arebroadly governed bytheGeneral Financial Rules (GFRs) ofIndia andall
procurement agencies evolve theirownmethods andprocedure inkeeping withthegeneral
guidelines states intheGFRs. Thelegalaspects ofpurchase weregoverned bytheArbitration
Actof1940which hassince beenrepealed andreplaced by'TheArbitration andConciliation
Ordinance, 1996(No.8 of1996) '.TheOrdinance hascome intoforce on25thJanuary, 1996.
Thecontracts concluded bytheCentral Purchase Organisation aregenerally governed bythe
General Conditions oftheContract asstated intheForm DGS&D-68 (Revised) readwith
instructions toTenderers inForm No.DGS&D-229.
(b) Does theprocurement regime distinguish between theprocurement ofgoods andservices?
Ifso,thenhowistheapplication ofrules determined incases ofjointprocurement involving
bothgoods andservices?
Therulesgoverning contracts forservices aregenerally thesame asthatforgoods except that
certain provisions aremade totakecareoftheaftersale-service wherever required.
Procurement Procedures Applied
4.(a) What procedures arefollowed intheprocurement process?
Theessential ingredients oftheobjective ofpublic procurement areconsidered tobe
(i) procurement ofspecified quantity andspecified quality,
(ii) procurement oncompetitive basis atthelowest reasonable price, and
(iii) procurement withaplanned timely delivery.
Themethods ofpurchase adopted are:
1. Byadvertisement -open/advertised tender.
2. Bydirect invitation tolimited number offirms -Limited Tender.
3. Byinvitation toonefirmonly-Single Tender.
4. Bynegotiation toonefirmonly-Single Tender.
5. Byrepeat orders.
(b) Under whatcircumstances aredifferent procedures used? Forinstance, ifthemethod used
depends onthevalue oftheprocurement, thethresholds should begiven.
Open Tender system i.e.Invitation toTender byAdvertisement isusedasageneral rule.
Limited Tender system isadopted where thedemand isurgent, sources ofsupplies aredefinitelyS/WPGR/W/11/Add.14
Page3
known andsufficient reasons existtoindicate thatitisnotinthepublic interest tocallfortenders
byadvertisement. Asingle tender isissued forproprietary items. Ab-initio negotiations are
undertaken inextreme urgency tomeettheemergent demand within agiven timeframe where
sources ofsupplies areknown.
(c) What arethetimelimits forsubmission ofbids?
Thetimelimitforsubmission ofbidsareasunder:
1. Tender byAdvertisement -71daysfrom thedateofissue oftender notice.
2. Limited tender -30daysfrom thedateofissue oftender.
3. Negotiation } Time isfixed keeping inviewthe
} urgency ofrequirement
4. Single Tender }
Publicity forinviting tenders
5.(a) How areintended procurements publicised? Areinvitations totender published? Ifso,
where, andinwhat languages?
AllTender Notices arepublished intheIndian Trade Journal, amagazine published bythe
Directorate General ofCommercial Intelligence andStatistics, Calcutta which isaweekly
document. Copies oftheTender Notices arealsosenttotheknown prospective suppliers.
GFRs oftheGovernment ofIndia alsoprovide theTender Notices canbepublished intwo
National daily Newspapers. Thepublications aremade inEnglish andHindi. TheState
Governments mayalsopublish theTender Notices inthelocallanguage papers.
(b) Dotheextent andform ofpublicity differ according totendering procedures applied and/or
onthevalue ofprocurement?
Fordomestic bidding, auniform procedure isadopted forpublicity irrespective ofvalue.
However, forglobal tendering, Tender Notices arealsopublished/notified through Indian
Embassies allovertheworld andcopies arealsogiven tothelocalrepresentatives ofEmbassies/
High Commissions.
(c) What details oftheintended procurement arenormally published? Isthere aminimum set
ofinformation thatisrequired tobepublished? Ifso,please specify.
TheTender Notices normally contains thefollowing details:
1. Name oftheprocurement agency.
2. Description ofitems.
3. Specifications applicable.
4. Quantities tobeprocured.
5. Price oftheTender Set.S/WPGR/W/11/Add.14
Page4
6. Duedateofopening oftender.
7. Tender salespoints.
8. Thelastdateuptowhich tenders aretobekeptvalid.
(d) Arethere anycharges forobtaining thefullsetoftender documents? Ifso,please specify
anddescribe howthese charges areset?
Advertised Tender setsaresoldonpayment offeesasperscale given below:-
Estimated value of Price (Rs.) ofthefirstTender
theTender. setincluding accompanying
schedule.
(i) UptoRs.5,000,000 Rs.100/-
(ii) from Rs.5,000,000 Rs.250/-
toRs.10,000,000
(iii) from Rs.10,000,000 toRs.50,000,000 Rs.500/-
(iv) above Rs.50,000,000 Rs.1000/-
(e) Areelectronic means usedtoadvertise procurement opportunities? What isthenature of
systems thatareinplace? Aredifferent tendering provisions applied tocontracts advertised
inthismanner? Ifso,please describe.
Theinformation inTender Notices isalsotransmitted through NICNET programme ofthe
National Informatic Centres.
Requirements laiddown forpossible suppliers
6.(a) Arethere registration, residence orother requirements forpotential suppliers?
DGS&D asaCentral Purchase Organisation haveasystem ofregistering firms forvarious
items. National Small Industries Corporation (NSIC) isalsoauthorised toregister small scale
industries under single pointregistration programme. RateContracts areonlyawarded tofirms
registered withDGS&D/NSIC. Unregistered/untried firms areconsidered foradhoctenders.
TheRegistration Certificate issued stipulates certain monetary limits depending upon the
financial reports obtained from thebankers andtheirturn-over.
(b) What isthenature ofanyconditions forparticipation required from suppliers -such as
financial guarantees, commercial standing andtechnical qualifications? Dotheconditions
ofparticipation varyaccording tothenature ofthetender process and/or thevalue ofthe
intended procurement?
Unregistered/untried firms arenormally considered forplacement ofadhocorders upto20%
oftheTender Enquiry quantity. Evenfirms registered areconsidered forquantities uptotwice
theirmonetary limit. Thecontracts foroperational demand areplaced onlyonpastsupplier.S/WPGR/W/11/Add.14
Page5
(c) Dothere existlistsofapproved suppliers? Ifso,what aretheprocedures forchecking the
capability offirms applying forinclusion ontenderers 'mailing lists? Arelistsofapproved
suppliers, ifany,regularly reviewed/updated?
Thelistsoffirms registered foranitemandpastsupplier ismaintained byeachpurchase unit.
Forfirms whoquote against tenders, acapacity report iscalled forthrough theInspectorate.
Theregistration granted bytheRegistration Branch ispermanent butisreviewed/updated after
every three years.
Criteria forassessing bidsandawarding contracts
7.(a) What criteria aretaken intoaccount intheaward oftenders? Arecriteria foraward of
contracts made available inadvance topotential suppliers?
AllTenderEnquiriesissuedforconcludingRateContractsstipulateaconditionthatRateContract
shallbeawarded onlytosuchfirms whoareregistered onthedateofTender opening forthe
itemorgetthemselves registered within 90daysofthedateofTender opening. Afirm
registered forallied items isconsidered asregistered. Another essential requirement foraward
ofRateContract isthatthefirms havetomeettheperformance levelduring thelastthreeyears
asspecified intheTender Enquiry. Foradhoctender, however, thecriteria foraward of
contract isnotindicated intheTender Enquiry, except thatitisstipulated thatfirms not
registered withDGS&D orNSIC ortheprocurement agency aretobeconsidered onlyifthe
bidsaresubmitted withanearnest money asspecified intheTender Enquiry. Normal scale
ofseeking earnest money is2%ofthelikely value ofthetender.
(b) Isprocurement subject toanyoffset provisions, suchaslocal content, technology transfer
orcountertrade requirements?
No.
(c) Ispreference given toanyparticular enterprises orgroup ofenterprises? Ifso,please specify.
Themain parameter ofthepolicy relating topurchase andprice preference areasunder:
(i) Small Scale Sectors areentitled foraprice preference upto15%overthelarge scale
sector. Buttheprice preference toSmall Scale Sector overLarge Scale Sector isnot
automatic andisconsidered onmerits ofeachcase.
(ii) Public Sector Undertakings areentitled forpurchase preference. Thisfacility isvalid
upto31.3.97.
(d) Dotheprocurement criteria differ according tosector orregion oftheeconomy?
Certain sectors ofindustry aregiven preference asexplained against 7(a). Nopreference is
accorded onregional basis. Certain regions depending upon thelocations aregiven certain
concessions intaxesandduties bytheCentral/State Governments. Theprocurement isdecided
based ontheultimate costtothepurchaser.S/WPGR/W/11/Add.14
Page6
(e) What isthemargin ofchoice ordiscretion allowed tothepurchasing authority? What does
theextent, ifany,ofdiscretion allowed depend upon?
Purchasing authority isexpected toaward contracts keeping inviewthelaiddown policy and
alsothecapacity oftheindividual firms anddelivery requirements. Except thisnoother
discretion isavailable tothePurchase Authority. Themargin ofpreference isregulated by
thepolicy ofpurchase/price preference asdetailed against 7(a). Negotiation, ifresorted to,
isconducted withalltheeligible tenderers.
Disclosure ofbidsreceived andcontracts awarded
8.(a) How aretenders received, registered andopened?
Tenders arereceived through theTender Boxinasealed cover. These aredulyregistered
inaseparate register aftertaking tenders from thetender boxandopened inpublic atthe
specified time.
(b) Areentities required topublish details ofthecontracts awarded and/or notify unsuccessful
tenderers?
Theunsuccessful tenderers arenotified through astandard regret card. Atpresent, there is
norequirement topublish details ofthecontracts awarded.
(c) Areentities required topublish, orprovide tounsuccessful bidders, pertinent reasons why
theirbidwasrejected?
Thecompetent authority isrequired torecord thereason forrejection ofthebids. The
unsuccessful tenderers arenotgiven thereason forrejection oftheirbids.
Treatment granted todomestic andforeign services and/or suppliers
9. What laws, regulations, procedures orpractices accord domestic services and/or suppliers
treatment more favourable thanthataccorded toforeign services and/or suppliers, oraccord
services and/or suppliers ofaMember more favourable treatment thanthose ofanother
Member? Please specify how, ifatall,more favourable treatment isaccorded. Please also
specify theworking definition of"domestic" inrelation todomestic services andsuppliers.
Thedomestic bidders aretreated atparwiththeforeign bidders andtheultimate priceavailable
totheuserdepartment isthedetermining criteria.
Procedures forhearing andreviewing complaints/appeals
10. What, ifany,aretheprocedures available forparties, domestic andforeign, tolodge
complaints against theaward ofacontract? Please provide details.
Theunsuccessful bidders canlodge theircomplaints totheconcerned procurement agency or
tothePublic Relation Officer. Whereas disputes arising outofthecontracts weregoverned
bytheArbitration Actof1940 which hassince been replaced by"The Arbitration and
Conciliation Ordinance, 1996 (No.8 of1996)" butanydispute atpre-contract stage canonly
bepetitioned bytheaggrieved party before thecourt.S/WPGR/W/11/Add.14
Page7
II. MEMBERSHIP OFPLURILATERAL, REGIONAL AND/OR BILATERAL AGREEMENTS
11. IstheMember party toanyplurilateral, regional and/or bilateral agreements withprovisions
ongovernment procurement? Ifso,please describe therelevant provisions.
No.
III. ECONOMIC IMPORTANCE OFSERVICES PROCUREMENT
12.(a) Please provide statistics (ifavailable) onthenumber andvalue ofservices procurements
- onbothanaggregate andsectoral basis;
- byorigin ofservices andsuppliers.
Service procurements areintegral partofthegeneral procurement contracts andnoseparate
datahavebeenmaintained.
(b) Please provide statistics (ifavailable) onthe
- share ofservices procurement intotalprocurement;
- share ofprocurement ofeachservice intotaldomestic output oftheservice;
- share ofprocurement ofeachservice intotaldomestic consumption oftheservice.
Total domestic consumption isdefined asthesumofpublic andprivate consumption
orthesumofdomestic output andnetimports (i.e.imports minus exports) oftheservice
inquestion.
Inviewof12(a) above, thisinformation cannot befurnished.