Functioning of IFA

The object/aim of functioning are :-

1. Decision making
2. Scrutinise proposal of 1.To expedite decision making .
expr. 2. To scrutinize all expenditure proposal from financial angle
3. Fin. Advice before sanctioning.
4. Consulted in exercising 3. Render financial advice.
fin. Powers beyond 4. Consulted in all financial proposals falling outside the
delegated Fin. Powers. delegated powers.
5. Consulted in planning &
monitoring 5.Consulted in planning implementation and monitoring of
various scheme and projects.

Specific Tasks:-

1. Budget formulation.
2. Buget Outcome.
3. Buget performance.
4. Buget Management.
5. Expenditure & cash management.
6. Project/ programme formulations.
7. Screening proposals.
8. Non Tax receipts.
9. Monitoring Assets & Liabilities.
10. Accounts & Audit.
11. Procurement & contract.
12. Finance Management system.
13. Use of technology.
Delegation of Financial powers Rules.
Expense of Duties &
responsibility Under the Delegation of Fin. Powers Rules, Min. of Fin. has
notified expense of duties & responsibility of integrated Fin.
Advisors in the Ministries/ Deptts.

Overall Incharge Bud. & IFA in the Min/Deptt will be overall incharge of Buget and
A/cs Accounts.

His duties will be to :-

Sch. For proposals adhere
to A) Ensure that the sch. For preparation of Bud. Adhered to.
Scrutinies Buget B) Scrutinise Budget properly.
Deptmental A/c. C) Complete departmental accounts maintained.

Watch & review Watch & Review of progress of expr. Against sanctioned grant.

Register of Proper maintinance of Register of Liabilities & Commitments.

Liabilities/commitment
Scrutiny of Supp. Demands Screening proposal for supplementry demands for Grants.

Foreign exchange Budgt Formulate Foreign Exchange Budget.

Advise on all matters Advise Adm Min. on all matters falling the delegated power.
within delegated power.

Scope of Work : IFA

Careful & intelligent Careful & intelligent Scrutiny of all expenditure.

Justification of proposal Justification of proposals involving fresh expenditure.
Challenge the necessity Challenge necessity for spending much money or such scale to
secure object.
IFA may also ask: Whether
Proposal really necessary
Result could not be obtained otherwise.
Expenditure is justified in the circumstances.
Canon of finance propriety observed.

Under Civil Work

A.O.N. Finance concurrence for A.O.N.
AEs Vetting of AEs.
Adm.Approval Administrative Approval.
Watching expr. Watching expr. Against funds released.
Scrutiny of Tender Scrutiny of Tender documents prior to acceptance.

Duties of IFA at Service HQ

Integrated Fin. Adv. He will be integrated Fin. Adviser at Service HQrs (AHQ).
Fin. Advice Render Fin. Advice.
Vetting proposal Vetting proposal falling with in enhanced fin. Power.
Advice in proposals Render advice & assist in all proposals requiring Govt. sanction.
requiring Govt. sanction.
TPC/PNC Participation in TPC/PNC.
Draft para / audit report Monitoring Draft audit paras /audit report/ internal audit
objection.
Data base for committee Preparing & monitoring data base on committed liabilities.
liabilition

Involvement of IFA in :-
Planning:- P.P.P. made at HQ/comd. in consultation with IFA.
Allocation under sub &
detailed heads
A part of Networking
Monitoring cases of capital
Budgeting:- Bud. Allocation against sub-heads, Detailed Heads
after consutation with IFA.
Data Base Mgt:- IFA become part of networking of database
with IFA.
Contract Mgt: Involved in contract monitoring of capital cases
with service HQrs.

Role of IFA in procurement:- As per DPM-2009, IFA’s role

in procurement cycle is summarized as under:-

(A) A.O.N. Stage:-

Necessity i) Necessity angle clearance.
Quantities ii) Vetting of Qunatities.
CFA iii) Competence of CFA.
Funds iv) Funds’ availability.
Tendering v) Mode of tendering.
Vetting T.E. vi) Vetting of Tender Enquiry.
Amend/Ext. vii) Amendment to TE/Extension of tender opening.
(B) Tendering Stage:-
Procedure of opening i) Procedural aspects for opening of tender.
CST ii) Vetting of CST.
Ranking L1 iii) C.N.C. for ranking L1, holding negotiation.
Cost Analysis iv) Cost analysis of quoted rates.
Data base & market v) Creation & utilization of Data base and Market intelligence.
intelligence
(C) Expr. Sanction stage:
i) Expr. Angle concurrence.
ii) Decision of retendering.
iii) Apportionment of Quantity, if requires.
iv) Acceptance of cost over estimates.
v) Types of Contracts for applying in a particular case.
vi) Vetting of supply order/ contract.
vii) Allotment of U.O. No.
(D) Post Contract Management:-
i) Extension of Delivery.
ii) Imposition/ wavier off LD.
iii) Extension of Letter of Credit.
iv) Amendment of contract.
v) Termination of contract.

Objectives & Duties of IFA-wing in CGDA’s Office.

Addl. CGDA Heads of IFA An addl. CGDA level IDAS officers is the heads of IAF Wing.
Wing.
Co ordinate/ Handle all To coordinate & handle all IFA issues with MOD, MOD(Fin)
issue and services.
Objective:-
Aiding/ Advising Aiding & Advising services HQrs, MOD & Sec. (Def/Fin)
through CGDA.
Control & supervision Overall control supervision , direction, co-ordination and
reporting in relation to the functioning of dedicated IFA below
service HQrs.
Adv. & Co-ordinate in Fin. Advice & co-ordination in relation to the working of IFA in
regard to working of IFA. the integrated with service HQrs.
Discharging Adm. Discharging of administrative responsibilities relating to the
Responsibilities functioning of IFA System.
Seeking direction & Seeking directions & guidance from CGDA in respect to
guidance functional responsibility to be discharged by IFA.
Postioning Positioning of IFAs.
APR Initiate, review or accept APR.
MIS Institute Appropriate M.I.S. for monitoring & reporting.
Duties:-
Act as repository for all Addl. CGDA head of IFA wing act as repository for all domain
Knowledge knowledge.
Circulation of orders Responsible for circulation of order relevant to functioning of
IFA & delegation of financial powers.
Issue of clarification Clarifications in regard to the issue raised by IFAs.
Manpower Planning Manpower planning for IFA coverages.
Inspection Periodical Inspection of IFAs.
S.O.P Watching formulation of SOP by the executive.

Fundamental Principles of Public Buying:

a) Every authority procuring goods in public interest shall have:

Responsibility and Accountability to bring:-
E.F.T. Efficiency, Economy, Transparency. And
Fair & equitable Fair & equitable treatment of suppliers.
treatments
Yardistic (b) Procurement must confirm to the following yardstic:
The specification offer meets on in term of Quality & Type.
Quantity of goods clearly spelt out.
Specification meets the basic heads of organization.
Superfluous & non essential goods not procured.
No purchase in excess of requirements.
Offers invited should be Fair, Transparent & reasonable.
Selected offer meets the requirement.
Price of the selected offer is reasonable and in consistent with

Text of Tender
comprehensive &
unambiguous
Specification contains
sufficient details
Eligibility criteria, past
experience etc kept in
mind.
To qualify the tender
Procedure, submission,
Date time & place etc.
incorporated.
Evaluated as per criteria
Sufficient time to tenderer
No alteration /
modification
Negotiations discouraged
Critically
Scaled or unscaled
Where PPP Exist
Ascertain authorization
No extravagance &
quality.
The authority at each stage record the reasons which weighed in
procuring decision.
Important measure to achieve:-
Transparency, competition, Fairness &
Arbitrariness
1. The text of tender document should be user friendly,
Comprehensive, unambiguous & relevant to the objective of
purchase.
2.The specification of required goods contains sufficient details
and essential requirements & should be standard which widely
known to industry.
3.In tender documents eligibility criteria, experience, past
performance, technical capability , manufacturing facilitation,
final position should be kept in mind.
4.Restrictions to qualify the tender confirm to extant Govt.
Policy & judicially chosen.
5.Procedure for preparing & submitting tender, deadline for
submission, date time & place of opening tenders, earnest money
, performance security for evaluating & ranking should be
incorporated.
6.Tenders evaluated in terms of criteria.
7. Sufficient time allowed to tenderer for preparation &
submission.
8.Tenderers not allowed to alter/modify tenders after expiry of
deadline.
9. Negotiations with tenderers discouraged.
C.V.C. Guidelines:-
In order to encourage transparency & culture off honesty the
CVC has issued a number of letter containing instructions &
guidelines . The IFA much ensure that these guidelines are
complied with while giving their financial adivice.
ACCEPTANCE OF NECESSITY:-
A.O.N. Stage
Why & How Much?
1.Examine justification critically.
2.Whether item pertains to scale/ unscaled category.
3.If PPP exist, compare nomenclature quantity and cost.
4.Ascertain details like authorization existing holding, quantity
ordered but delivery ordered.
5.Find out no extravagance and over provisioning.
Over provisioning
Modification/up gradation 6. Ascertain whether the purpose can be achieved by
of existing facilitation modification or upgradation of existing items/ facilitations.
Where existing facilities are
7.Where existing facilities are to be strengthened, see whether
to be strengthen standardization & compatibility taken into consideration.
In case of vetting of 8.For scaled items, vetting of quantities, assessment of
Quantities requirement and resources with budget availability taken into
consideration.
A.O.N. Stage :- Competence of CFA:-
Match ceiling powers of 1. Match the ceiling powers given with the total of likely
CFA expenditure.
Recurring or non-recurring 2. See whether expenditure recurring or non-recurring.
No Splitting 3. See no splitting of expenditure.
Similar item but different 4. Similar items with different size treated as different items
size. ( Drugs / Consumable).
Power not re-delegated 5. Delegated powers not re-delegated to lower authority.

A.O.N.: Funds availability:-

Minor/ Detailed Heads
Items chargeable to Capital
Funds availability
Progress Expenditure
Status report for all carry
over cases.
Bases for estimated cost
Realistic & not to get
clearance from lower CFA
ASK
How estimate
What assumption
What information & tools
How compared
Any part eliminated
Lower cost material be
used
OLPR2
1. Minor heads & Detailed heads correctly mentioned.
2. Items chargeable to capital head are not procured under
Revenue heads/power & vice-versa.
3. Confirm Funds availability.
4. Look for progressive expr. & add committed liabilities.
5.Look for status report of all carry over cases. Also ensure that
carry over cases are finalized before new projects taken up.
Ascertain the basis for estimated cost of proposal worked
out.
Is it based on?
L.P.P.
Budgetary quotes.
Market survey.
Ensure that estimates are realistic & not undervalued or to get
clearance of lower CFA.
Then ask following question:
How was the estimate made?
What assumption made?
What information & tools used?
How did previous estimate compared?
Can part of product be eliminated?
Can lower cost material/method be used?
MODE OF TENDERING
Open Tender.
Limited Tender.
PAC Tendering.

Rs. 25lakhs & above
Common use of items
Notification
For website
Bids sent
T.E. is more than 3
Web publicity
In case of more than
25lakhs
Urgent
Addl. Expr. Justified
Reason for urgency
recorded
When not in public interest
Why demand could not be
anticipated.
When on the grounds of
Limited/ known sources
If due to public interest
If due to gov. policy
Carefully see various
factors
Where OEM do not
manufacture assemblies,
components
Confirm that the required
items are available with
PAC vendor/ dealers.
PAC only issued to OEM
Single Tendering.
Rate Contract.
Repeat order.
OPEN TENDER :-
Used for procurement of estimated value of Rs. 25lakhs &
above.
All common use items, which are normally available in open
market with a wide range of sources, open tender enquiry
should be preferred.
Tender notified in Indian Trade Journal & DAVP.
Letter also sent to MOD/AHQ for publishing in their websites.
LIMITED TENDER:-
Upto Rs.25lakhs.
Copies of bidding sent by speed/reg.posts/email tofirm.
Tender Enquiry is more than 3.
Web based publicity given to limited tenders.
Where L.T.E. adopted for more than 25lakhs then look for
the following:-
Demand is urgent.
Addl. Expr. Involved by not procuring through Advertized
tender is justified.
Comp. Authority has put on record the nature of urgency.
Not in public interest .
Source of supply definitely known.
If on the ground of urgency, the see why demand could not be
anticipated earlier.
If proposed on the grounds of Limited/ Known sources, the look
for background papers.
If on the grounds of public interest, look for justification.
If based on Gov. policy, look for Govt. orders.
P.A.C. Tendering (Propriety Acquisition Certificate
Tendering)
Carefully see factors like Fitness, Availability, Standardizations
and value for money.
Where OEMs do not manufacture assemblies, components etc
but outsource which may be available at cheaper price, the users
must have proper sources knowledge to procure items from right
source.
Confirm that required item is only available with PAC vender
dealers, stockist or distributors.
Ensure in case of spares, PAC is issued only to OEM or OEM
approved manufacture
PAC Certificate only to
OEM
PAC not expired
PAC have concurrence of
IFA & approval of CFA
PAC Certificate issued by
Only non PAC items on
urgency basis
Justification from user
From Reputed firm only
Estimate rates prepared in
Advance
Only certain items from
CCIC,SSI, KVIC etc.
Ensure at DGS&D rate or
not
If on DGS& D Rate, order
placed against form-131
Ensure Rate Contract
concluded by central
Agency.
Concluded upto 3yrs with
the Firm
Items delivered successfully
Original order not on the
grounds of urgency
Not splitting requirement
to avoid sanction of next
CFA
Same terms & Conditions
Stores are identical
Orders within 6 months
Restricted to 50% of the
approved manufacturers.
See PAC certificate issued only to OEM even if purchase done
through OEM authorized dealers.
Ensure PAC not expired as it remains valid for two year.
See PAC certificate contains concurrence of IFA & approval by
CFA.
PAC certificate given not below by PSO/APSO/DG/ADG at
HQrs or by GOC-IN-C.
Single Tendering:-
Single tender for Non-PAC items is done on the ground of
urgency, operational or technical requirements.
Reasons form user for justification insisted upon.
Reputed firm only.
See whether reasonable estimates rates has been prepared in
advance.
Special dispension toNCCF/Kendriya Bhandar is no longer in
force. Certain items from KVIC, ACASH, CCIC & SSI may be
procured.
Rate Contract:-
Items bought on DGS&D Rate contract list or not.
If purchased on DGS&D Rate contract procurement can be done
by placing order against form 131.
Ascertain whether item being bought are on Rate Contract
concluded by Central Procurement agencies.
Rate Contract are concluded for a period of upto 3yrs with firm
and fixed prices subject to apparition of fall clause.
Repeat Order:-
See items ordered delivered successfully.
See original order did not cover urgent/emergent demand.
See that past & present order is not splitting requirement to avoid
sanction of next CFA.
Confirm that the firm is prepared to hold same terms and
conditions including delivery.
Stores are of identical nature.
Order placed with in 6 months from the date of supply against
previous order & place only once.
Repeat order restricted to 50% of the last order quantity.
quantity last ordered.
See w.r.t. PNC minutes the Look PNC minutes and ensure that the original order was based
original order placed on on the basis of lowest prices & not on delivery preference.
lowest price basis

Various clauses under Tender Enquiry:-

Mentioned in open or
Limited Tender Enquiry
2% to 5% of the estimated
value of good
In the form of DD, FDR,
Cheque etc.
Valid upto 45days
E.M.D. Clause: (Earnest Money Deposit)
E.M.D. asked from bidder except those who are registered with
C.P.O., N.S.I. corp., MOD or concerned AHQrs Deptt.
E.M.D. is ranging only between 2% to 5% of the estimated value
of goods to be procured.
It may be accepted in the form of A/c Payee DD, FDR, Banker’s
Cheque or Bank Guarantee.
See EMD is remaining valid for 45days beyond the final bid
validity period.

Standard clause 95% or
5% Kept
100% after delivery
Part supply payment
No Adv. Payment terms
If agreed for Adv.
Restricted to 15% of BGB.
PAYMENT TERMS :-
Ensure standard clause of 95% or 5% has been kept.
May agree for 100% after delivery and accounting terms.
Part supply payment terms may be considered when mentioned
in R.F.P.
Not agree for advance payment terms in T.E.
If advance payment included in exceptional circumstances, it can
be restricted only upto 15% against BGB.

Risk and Expense Purchase:-

1. It is undertaken by the purchaser in the event of the supplier
failing to honors the contracted obligations within the
stipulated period and where extension of delivery period is not
approved.
2. Risk purchase at the cost and expense of suppliers may not
always be practical, as it not be feasible to enforce recovery
without legal action.
3. This clause rarely involved in case of import contract.
4. Where only one quality firm to supply there is no alternative
source, a performance guarantee clause may be incorporated in
T.E.

Force Majeure clause:-

This clause used to meet the This clause is used in cases on non-performance of work results
force majeure from Force Majeure Circumstances as Flood, fire, Earthquake &
circumstance. other acts of God as well as war/ military operation etc beyond
the control of the parties that might arise after the conclusion of
the contract.

In Long term Contracts
Buyer reserve the right by
using “ Discounted cash
flow” method.
Firm-price-basis
In fluctuating market
condition
Standardize Price variation
clause should be indicated
in R.F.P.
Confirmation for
acceptance of bidder
LD CLAUSE
D.C.F. clause:-
DCF techniques are generally used in long-term contract.
The buyer reserve the right to evaluate the offers received by
using “ Discounted cash Flow” method at a discount rate of -----
%.
Price Variation clause:-
Normally contract is entered into on firm-price basis.
In the fluctuating market condition, supplier after quotes variable
prices. When contract period exceed 18months.
As per DGS&D manual, a standardized price variation clauses
need to be indicated in RFP.
ERV CLAUSE:-
Exchange Rate Variation clause is incorporated where the
delivery period exceeds one year from the date of contract
involving import (Foreign Exchange).
BID VALIDITY:-
Bid Validity is 90days in a Single Bid System.
120 days in case of Two Bid System.
Vetting of Draft Tender Enquiry:-
See that:-
1. Time & Date for Opening of Tenders indicated.
2. copies of Drawings/specifications made available to
tendererers.
3. Tender sample submitted for inspection.
4. The Inspecting Authority is correctly indicated.
5. Where large quantities of store is involved or where shelf
life of store is limited the delivery may be specified in
installments.
6. Performance Guarantee indicated to cover warranty period
in r/o plant & Machinery.
7. Seeking confirmation from bidders for acceptance of part
quantity included.
8. Clause regarding Purchaser’s right of rejection without
assigning any reason included.
9. The clause about imposition of Liquidated Damages
included.
10. Clause about Hardware/software up gradation has been
included.
11. The AMC Clause included.
12. List of vendors furnished.
 TENDERING STAGE:-
1. Opening of Tender
2. Vetting of CST
3. Negotiation
1. Opening of Tenders:-
T&F Method i) Ensure Transparent & Fair method adopted.
In two bid tendering ii) In two-bid tendering, ensure TEC completed as per DPM-
2006.
Where commercial bids iii) Where commercial bids need revision, see equal opportunity
need revision was given to all technically acceptable vendors.
Vendors present on the day iv) See that vendors were given opportunity to be present during
of opening initialed & opening of commercial bids. Each bid serially numbered &
signed by Board. initialed on each page of tender by the Tender Opening Board.
v) Late or Delayed tenders not accepted.
vi) Modification to be done only after written notice.
vii) Withdrawal of bid not allowed.

VETTING OF C.S.T. :-
One Agent not represent 1. See one agent does not represent two supplier. It may be
two supplier rejected under CVC guidelines.
2. CST is Exhaustive & includes all details.
3. See whether there is any computational errors.
4. See required sureties furnished & documents properly
signed.
5. Any Deviation from T.E. brought out in CST.
6. Determine the Substantial Responsiveness of each bid to bid
documents. A responsive bid confirm to all terms & conditions
without any material deviation.
7. If any clarification required from any bidder, ensure it is
done in writing with no change in price or substance of the
bid is sought.
8. While ranking the quotes, all elements of cost, terms and
condition with financial implication taken into consideration.
9. All taxes & duties to be paid taken into account.
10. Delivery period & Delivery compliance are important
variable for evaluation of bids.
11. Ensure L.P.P. mentioned in CST for fair comparison.
12. Vet CST w.r.t. original quotations/Indent & should be signed
as a IAF representative.

SCRUTINY OF C.S.T. :-
1. Rates are neither abnormally high nor low w.r.t. last paid
rate.
2. No. of firms to whom TE sent & number of firms who
have responded has been recorded on CST.
 3. Firm is holding DGS&D Rate contract or not.
4. The Clause not acceptable to firm has been highlighted.

NEGOTIATIONS :-
L1 done by CNC Determination of L1 has been done by C.N.C.
Reasonableness of price Establish reasonableness of price w.r.t. the following :-
Estimated value 1. Estimated value as per indent.
Respond 2. Respond of trade to T.E.
L.P.P. 3. L.P.P.
Data base 4. Data base of past contract.
Movement of price indices 5. Movement of price indices of raw material, electricity
whole sale price index.
Market Intelligence 6. Market intelligence regarding cost of items.
Material comp. 7. Material composition.
Technological 8. Technological intricacies.
Current production 9. Whether current production or otherwise.
Maintenance requirement 10. Maintenance requirement, spares & warrantee etc.

NEED FOR NEGOTIATIONS :-

After identification of L1 1. No negotiation after identification of L1.

With L1 only
Rate quoted higher
No negotiation when price
is within Bench Mark
Rate Contract for same
items permitted
No post tender negotiation
2. In exceptional circumstances, it can be hold with L1
only.
3. When quoted prices is higher than the estimated rate.
4. If the price of the vendor is found within benchmark
fixed , No Negotiation carry out.
5. Where a no. of firms are brought on rate contract for
same item, negotiations as well as counter-offering of
rates are permitted.
6. No post tender negotiation with L1 except in exceptional
cases.

RE-TENDERING :-
Under the following circumstances :-
Not confirm essential 1. Offers do not confirm essential specification.
specification
Major changes in 2. When major changes in specification and quantity.
specification
3. Price unreasonably high.
4. L1 withdrawn his offer.
5. Due to lack of Competition when :-
i. Offers are less than 3
 ii. Ring prices.
iii. In short supply.

VETTING OF SUPPLY ORDER:-

Payment term
Price correctly indicated
Asked for S.Tax/service tax
Status of Excise duty
1. Ensure Paying Authority & payment orders terms
incorporated in contract.
2. Whether prices correctly indicated and variation if
any has been stipulated.
3. Whether firm asked for sale fax/service tax
separately.
4. Whether status of excise duty specified.

Terms & Cond. is 5. Whether terms & conditions are in conformity with
inconfirmity with offer offer of firm.
Force Majeure 6. Whether force majeure clause is incorporated.
Copies of S.O. 7. Whether copies of supply order endorsed to all.
Inspected 8. Stores have been inspected before
dispatched/delivery.
Head of A/c 9. Head of account indicated.
Transit risk 10. Transit risk clause incorporated.
Packing, Insurance 11. Whether the clause regarding packing, transit
lose/damage insurance, lose or damages incorporated.
L.D. Clause 12. Whether L.D. clause includes.
U.O. No. & date 13. Where Financial concurrence U.O. NO. & date
indicated.

CONTRACT EFFECTIVE DATE:-

Signing of contract 1. Date of signing of contract.
Performance Bond 2. Furnishing performance Bond.
Export License 3. Obtaining Export Licence.
Bank Guarantee 4. Receipt of Bank Guarantee for advance payment.
Date of issue of End user 5. Date of issue of End user certificate.
certificate

POST CONTRACT Mgt.:-

Extension of Delivery:-
When Supplies not When the supplies do not materialize by the stipulated contract
materialize delivery date, the following options explored :-
i. Extending delivery date.
ii. Re-fixing delivery date.
iii. Cancel the contract and repurchase non-supplied
Qty.

See the following while Since a delivery period extension constitutes an amendment to
granting Extension of D.P. contract involving financial Q contractual ramification. The
status of supply position and supply order is reviewed to
see :-

Justification i. Justification for seeking extension by Vendor/firm.

Information given in S.O.
DP extension recommended
CFA’s recommendation
with or without L.D.
Upto which B.G. valid
Whether the users suffered
lose
Any downward trend in
price
Any liability for paying tax/
duties
Delay due to willfulness
See option for short closure
of S.O.
Any obligation on
purchaser
Is it due to Force Majeure
Request in advance
ii. Information given in supply order i.e. Dt of s.o.,
Name of firm, Qty. ordered, Original delivery Pd,
D.P. extension checked.
iii. Period of D.P. extension recommended w.r.t. original
D.P. and the requirement of Firm checked.
iv. Recommendation of CFA for extension is with L.D.
or without L.D. checked.
v. See the date upto which Bank Guarantee is valid.
vi. See whether the user suffered any actual Or potential
lose due to delay.
vii. See whether there is any downward trend in price.
viii. See whether the state is liable to pay additional
taxes/duties/levies during proposed extension.
ix. See whether delay in supply has been willful on the
part of supplier.
x. See whether option of short closure of S.O. has been
considered.
xi. See whether the purchaser has any obligation such as
import license, materials or facilities.
xii. See whether the extension for DP is due to Force
Majeure clause.
xiii. See whether request for extension received in
advance.

Imposition of Liquidated Damage :-

Liquidated Damage?
See consequential Damages
See any L.P. during
delayed period
All elements in calculation
checked
a. Compensation of loss on account of Late delivery when
loss is pre-estimated & mutually agreed to is termed as
Liquidated damage.
b. See consequential damage is imposed over & above the
L.D. in case of time critical Turn Key projects.
c. See whether any L.P. has been done during
extension/delayed period.
d. Check all relevant elements in calculation of L.D. w.r.t.
Inspection Note, Dt. Of Dispatch, Dt. Of receipt of
 stores, Dt. Of inspection & Qty. of stores.
Check correctness of e. Check the correctness of overall delay calculated.
overall delay

Legal position in regard to claim is as under:-

Legal aspects 1. The claim on account of loss sustained should not
exceed the sum stipulated in contract.
Reasonable sum 2. Only reasonable sum should be calculated as damages.
Based on facts 3. Reasonable sum depends on fact.

Termination of Contract:-

Contract can be terminated due to non compliance of any one

of the condition:-

Fails to honour 1. Fails to honour any part of the contract.

False & Fraudulent 2. When contract found to have been made on False or
declaration Fraudulent declaration.
Unethical/unfair trade 3. When found to be indulging in unethical or unpair trade
practice practices.
Both parties agreed 4. When both parties agree.
Fails in inspection 5. When supplier repeatedly fails in inspection.
Any other 6. Any other circumstances.

Nature of Expenditure: Incurred on I.T. Related Project.

(Sub-heads)

The following nature of expenditure under sub-heads that can be

incurred on I.T. related Project:
Computer System 1. Purchase of computer system.
Provision for 2. Provision for access networks, Internet, Media
connectivity including hardware & software.
Software/application 3. Purchase of system Software & Application software.
software
Comp. Peripherals 4. Purchase of computer peripherals and ancillaries for I.T.
Project/Training.
Comp. Stationery 5. Computer stationery, consumable tech. books.
Software Dev. Tech. 6. Software Development Technical consultancy for I.T.
consultancy Project/training.
Repair & maintenance 7. Repair & maintenance of computer system.

Budget Head for I.T. procurement is Minor Head-110(H)

Points to be seen in procurement:-

General Points:-
Included in PPP
Tech. vetting
Tech. vetting & tele
communication
Mode of Tendering
After allocation under I.T.
Head
System study through
competent experts
RFP to selected vendors
No Brand name allowed
Ltd. Tender proposals
Proposal prioritized &
vetted
Brand Named in T.E.
Laptops
Proposal involving outside,
skill & tech. expertise of
Army considered
Proposal to outside agency
Have been examined
critically
Army does not have skill &
expertise
Competency/ credibility
verified
1. Whether included in P.P.P. & approved by DCOAS
(Prs) ?
2. Whether Technical vetting carried out by ADG(System)?
3. Whether Technical vetting for tele communication
aspects has been done by DG sigs/CSOs/comd/ corps
HQrs.
4. Mode of tendering for I.T. equipments by availing
DGS&D Rate Contract for which necessary
inspection/testing need to be carried out.
5. After allocation under I.T. head, PCs, Peripherals, Comp.
Stationery & Consumable must be procured out of such
allocation.
Specific Points to be seen on:
(A) Networking Projects:
1. See that a system study through competent experts in the
complex projects has been carried out.
2. See whether RFP has been floated to selected vendors.
3. No Brand name is allowed in T.E. for good competition.
4. See whether Limited Tender to suitable vendors have
been proposed.
(B) Hardware:-
1. See that the proposal for procurement of computer
peripherals prioritized & vetted by the controlling
authorities.
2. No. Brand name allowed in T.E.
3. Laptops procured as per latest instructions of MOD(Fin)
& Min. of Finance.
(C) Software:-
1. See that skill & technical expertise in various computer
centres/Estt. of Army have been considered before
involving outside agencies.
2. See that proposals to outside.
3. The area in which tech. consultancy sought.
4. The Army does not have the skill & expertise.
5. The competency & credibility of outside agency have
been verified.
 Special Fin Power of GOC in C (NC) (EC)

To procure Basic Aim:

equipment/spare or Ensure that special financial power by the GOC in C
modification to equipment NC/EC to incur expenditure on procurement of equipment/spare
for specific requirement and stores including carrying out modifications to equipment for
meeting specific requirement for counter Insurgency operation/
International Securities duties/ operations in high altitude area.

General Powers under Sch XXI-A under Minor Head-110-C

are as under:

 Modification to equipment & vehicles peculiar to the

heads of the sector/Counter Insurgency.
 All items approved for introduction in any by GSEIC
 Repairs/maintenance & AMC of equipments/items.
 Equipments &items such as sensors etc to detected
 Instructions across border & Line of control
 Weapons and ammunitions and non lethal ammunition as
Dye Marks, grenades , Tear smoke grenades etc.

Misc & Contingent Exp

(Minor heads 800B)

 Clothing/rations/medical facilities for detained.

 Urgently required medical equipment for troops not
available in medical stores depot etc.
 Training of troops for C1 ops/ IS. Duties
 Procurement of administrative and logestic support
stores/equipment.

 Special type of expenditure directly connected with the

operations
 Repairs & maintenance of stores procured under special
power.
Terms Not To Be Procured:-

 Computer peripherals, ancillary procured under IT-Sub-

head
 Medical Stores/Equipment
 Items classified to be of capital nature.
 Normal Weapons & Equipments
 Vehicles including civil pattern vehicles which are
supplied through ordnance channels.