Financial Advice Circular No. 16 of 2008.

Office of the CGDA West Block-V, R.K.Puram, New Delhi-ll0605(Pr. IFA Wing)

Financial Advice Circular No. 16 of 2008.

No. PIFAlMARl15023/Vol. IV Dated: 29thDec. 08

ToAll PCsDAlPCDA (HRD)/CsDA/IFA~,. (Dedicated and Nominated)/ ItT(..S

Sub: Savings.

Following cases of financial advice rendered by various IFAs which have resulted in

substantial savings are circulated herewith for information and guidance of all concerned:

IFA 24 ED Allahabad

1. 24 ED submitted a proposal for topping-up of SSF level for Grease XG-271. Net

requirement was 3762 Kg. AON angle concurrence was accorded. At the time of expenditure

angle approval it was observed by IFA 24 ED that Air HQrs. had also placed a supply order for

11520 Kg. Accordingly, it was advised to review the requirement as the SSF level would have

been recouped on the materialization of supply order and to close the indent if not required. ED

agreed and the indent was closed resulting in a saving ofRs. 6,70,753/-.

2. A proposal for toping-up of SSF level for Grease XG-276 was submitted to IFA 24 ED.

Total quantity required was 270 Kg. Accordingly, AON angle concurrence was accorded. At the

time of expenditure angle approval it was observed by his office that a supply order of Grease

XG-276 for 450 Kg. was placed by Air HQrs. with delivery schedule of 8 weeks for 24 ED. Total

requirement was reviewed in the light of Air HQrs. SO and it was found that ground balance was

adequate for next two and half years. So it was decided to close the current indent resulting in a

saving of 2,88,467/-.

IFA R&D / DGAFMS New Delhi

DGAFMS had submitted a proposal for financial concurrence in respect of PVMS No.

011748 Oestradiol Valevate 2 mg pack of 28 tabs. Based on the MMF 1405 as approved by Sf.

Cons(Med), the total quantity 50580 pack of 21 tab (i.e. 1405x36=50580) was vetted by IFA

R&D.

._Financial Advice C1rcular Nos. 1 to 3 issued in 2007

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Financial Advice Circular No. 16 of20088

While vetting the CST, IFA observed that the single eligible vendor had offered the pack

of 28 tab instead of pack of 21 tab. DGAFMS was requested by the IFA to examine the issue. On

the advice of the Gynecologist, who recommended the procurement of pack of 28 tab being g~ven

to the patients for a cycle of 3-4 weeks as the pack of 21 tab is not being manufactured now, Sf. .

Cons(Med) approved the procurement of Oestradiol Valevate 2 mg pack of28 tabs.

The case for concurrence ITomfinancial angle was again examined in length by the IFA

keeping in view the recommendations of Sf. Cons(Med). The case was again returned to

DGAFMS with the remarks that though as per the recommendations of the Gynecologist, Sf.

Const(Med) had approved the procurement of Oestradiol Valevate 2 mg pack of 28 tabs but, the

total quantity of tabs that will be procured over and above of the approved MMF might have not

been kept in view The detail of which are as under:-

MMF 1405 x 12 x 28 (pack of28 tab)= 472080 tabs (for one year)

MMF 1405 x 12 x 21 (pack of21 tab)= 354060 tabs (for one year)

Difference = 118020 tabs (for one year)

Since Rate Contract for procurement of 16860 pack of 21 tab (MMF 1405xI2=16860)

was to be concluded for the year 2008-09, DGAFMS was advised to reduce the requirement to

12645 pack of 28 tab ITom16860 pack of 28 tab without compromising the requirement of a pack

of 28 tab to be given each patient for a complete cycle of treattnent arid also total qty 354060

vetted by the IFA was not exceeded.

The firm offered the item @ Rs. 192/- per pack of28 tab + Tax 4%. Therefore, as a result

of reduction of 4215 packs (i.e. 16860-12645=4215) the total saving of Rs. 8,41,651/- was

achieved as per detail given below.

4215 pack of28 tab x 192/=

+Tax@4%

Net Saving

Rs. 8,09,280/-

Rs. 32371/-

Rs. 8,41,651/-

IFA CC Lucknow

1. A proposal for procurement of quantity 1000 'Training Manual' at an estimated cost of

Rs. 8.5 lakh was received ITomAMC Centre& School. On the advice ofIFA CC, it was agreed to

procure ibid manual directly ITomthe publisher at total (reduced) cost of Rs. 6.5 lakh, resulting in

a saving ofRs. 2lakh.

IFA MC Na!!pur

1. A case for provisioning of Body Structures for 15 Chetak and 9 Cheetah helicopter was

submitted to IFA MC for concurrence. The estimated cost of the proposal was Rs. 3,67,00,260/-

and concurrence was requested under Sch. XII-A.

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Financial Advice Circular No. 16 of 20088

On examination of the proposal the following observations were raised:

(i) The number of body structures to be procured was worked out based on a utilization

rate of 400 hours per helicopter per year. HQ MC was requested to substantiate the

same.

An indent for 56 body structures for Chetak helicopters had been placed on HAL by

Air HQrs. in 2003. It was observed that tail number of 4 Chetak helicopters included

in the present proposal also figured in the earlier indent placed by Air HQrs. on HAL

which required reconciliation.

HQ MC reviewed the requirement stating that the utilization rate actually worked out to

264 hours per helicopter per year instead of 400 hours per helicopter per year taken earlier.

Accordingly, residual life of body structures turned out to be much higher than that considered in

the original proposal. Likewise, 4 Chetak helicopters which had been covered by an earlier indent

placed by Air HQrs. were also deleted from the proposal.

A revised proposal for procurement of body structures for 5 Chetak helicopters and 4

Cheetah helicopters amounting to Rs. 1,36,04,110 was submitted by HQ MC which was

concurred in. Thus a saving to the extent of Rs. 2,30,96,150 was achieved.

(ii)

2. Proposal for provisioning of 3rd and 4th line spares for MIG-23 comprising 137 lines

amounting to Rs. 1,20,46,531.15 was submitted to IFA MC for concurrence.

Amongst the various observations raised, it was found that in some SOR lines, the MPE

considered was not correct and in some cases IMMOLS generated quantities were amended in the

vetted quantity column without any supporting remarks.

HQ MC responded by reducing the quantities wrongly calculated. As a result of reduction

in quantity, the proposal got reduced to 117 lines amounting to Rs. 89,24,792.35, rsulting in a

saving ofRs. 31,21,738.80/- due to advice ofiFA.

3. Proposal for provisioning of 3rdand 4th line spares for AN-32 ac for (08-13) cycle was

submitted to IFA MC for 298 lines amounting to Rs. 3,07,76,524/-.

In addition to other observations it was brought to the notice of HQ MC that while

rounding off quantity to next 10 nos., in some cases the projected quantity had even surpassed the

Gross Requirementworked out on the basis ofMPE for 57 months in case of imported items.

In response IFA's advice, HQ MC reviewed all the SORs and submitted a revised

proposal for 298 lines amounting to Rs. 2,41,84,464,22/-. As a result of IFA advice a saving of

Rs. 65,92,059.78 was achieved.

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Financial Advice Circular No. 16 of 20088

IFA DR Delhi Cantt.

Savings achieved due to vetting of AEs(i)Diary No.1122

ProjectVartak

Job No.101/320

Name of Job

AE for provision of surfacing works on road

The subject AE was received for Rs. 306.70 lacs. It was observed that Rate Analysis for

applying Prime Coat of Bitumen was on higher side as Royalty charges were added in the said

item which was not applicable. It was advised to correct the Rate Analysis. Accordingly, rate of

the item came down from Rs. 679.07/10 sqm. to Rs. 382.26/10 sqm. Finally, the AE was

concurred to Rs. 282.32 lacs. Thus an amount ofRs. 24.38 lacs was saved.

(ii)

The subject AE was received for Rs. 252.92 l~cs. It was observed that the cost of Bailey

Bridge components was taken as per Supply Orders placed in the year 2002 to 2005. It was

advised to adopt the latest available rate which was agreed to and the cost came down from Rs.

85.10 lacs to Rs. 66.72 lacs. Secondly, Road Lift Charges were worked out at Rs. 69.23 lacs.

These charges had been applied on the cost of Bailey Bridge components also which was not in

order as only transportation charges should have been applicable. This was got corrected and

Road lift chares came down to Rs. 23.79 lacs. Consequently, other elements of estimates like

escalation and other charges were also reduced. Finally the AE was concurred for Rs. 188.68 lacs

resulting in a saving ofRs. 64.28 lacs.

(iii)

The subject AE was received for Rs. 273.46 lacs. It was observed that the Road Lift

Charges were worked out as Rs. 74.18 lacs. These charges had been applied on the cost of Bailey

Bridge components also which was not in order as only transportation charges would have been

applicable. This was got corrected and the Road lift charges came down to Rs. 15.15 lacs.

Consequently, other elements of estimates like escalation and other charges were also reduced.

Finally, the AE was concurred for Rs. 220.61 lacs resulting in a saving ofRs. 52.85 lacs.

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, ,Diary No. Project Job No. Name of Job1192 Himank 251/20 AE for construction of 150 feet TSR (Triple Single

Reinforcement) Bailey Bridge

Diary No. Project Job No. Name of Job1157 Himank 201-B/20 AE for construction of 200 feet DDR (Double

Double Reinforcement) Bailey Bridge

Financial Advice Circular No. 16 of 20088

Pro'ect Job No. Name of Job

Deepak 405/484 AE for widening and improvementof Hindustan-Tibet roadThe subject AE was received for Rs. 1436.10 lacs. It was observed that the disposal. of

excavated earth from formation cutting was worked out as Rs. 128.67/cum. based on Rate

Analysis,.However,the item is availablein HQrs. DGBR SSR 2004 at Rs. 19.80/cum.in item

No. C-lOl. It was, therefore, advised to adopt the SSR item instead of applying Rate Analysis.

The rate of item was adopted as per SSR 2004 and AE was reduced accordingly. Secondly,

escalation had been provided for @22.50% and 31.80% for third and fourth year, respectively.

However, it was observed that escalation charges were taken on contracted material also which is

not in order as escalation charges are applicable on HQrs. DGBR SSR 2004 items only. It was

also observed that Administrative Overhead and Supervision Charges were taken on stores

purchased on market value which was also not in order and got deleted from the estimate.

Provision of Road Side Accommodation @2% on surfacing works was also got deleted from the

estimate as the .work is for improvement of road and not original work. After getting all these

corrections done, the AE was finally concurred for Rs. 1134.03 lacs resulting in a saving of Rs.

302.07 lacs.

IFA lWNC) Mumbai

1. Procurement of silver sports trophies: HQWNC

A case was received for financial concurrence for procurement of eight in numbers Silver

Sports trophies for various units under HQWNC. Total financial implication of the proposal was

Rs 9,12,000/- as approximate weight of each trophy in silver would be 3 Kgs. It was proposed to

cover the proposal under Sl.No. 49 or 40 (a) of Annexure II to NI l/S/06. Similar case was also

received from INS Vajrabahu for procurement of eight in numbers silver trophies, for a sum of Rs

3,20,000/-.

Howev~r, since there is no provision in Annexure II of NI l/S/06 for procurement of

such trophies, it was suggested by the IFA to procure the items from Non-Public-Fund as is done

in other Services. It was also suggested that the case may be forwarded to IHQ for sanction under

Sl.No. 37 of Annexure I as a special case as provision does not exist under Sl. No. 49 or 40 (a) of

Annexure II to NI l/S/06. The proposals have been dropp~ by the Command and items are being

procured through Non Public Fund resulting in a saving ofRs. 12,32,000/-.

2. Procurement of galley & mess traps: NSRY(KAR) R-2543

A proposal was received from NSRY (Karwar) for procurement of galley equipments &

utensils, plates, glasses from trade to augment the capability of the industrial catlteen at Karwar at

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Financial Advice Circuhir No. 16 of 2008"

an approximate cost of Rs 11,00,000/-. The procurement of items of mess traps was proposed,

based on the: Kamatclm. factories Rules J96Q As pP.'fRu.le 95(3) of the ibid Rule, 'where the

canteen is managed by a Cooperative society registered under Karanataka Cooperative Soci~ies

Act, the QCcupiershall provide the initial equipment for such canteen and shall undertake that any

equipment required thereafter for the maintenance of such canteen shall be provided by such

cooperative society.

However, as per D.P.T. OM No. 12/5/91-dir (c) dated 9/4/92, the employees of the non-

statutory departmental/cooperative canteen located in the Central Government Offices have been

treated as Central Govt. employees w.e.f 1/10/91 & financial support to the Canteens from

Government side was s'"LOppedand no capital grants/replacement grants, grants for repairing the

main equipment are to be sanctioned by Ministries/ Departments. In view of the above guidelines

ofD.O.P.T. the case was not concurred by the IFA resulting in a saving ofRs. 11,00,000.

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3. RRC for sym.tronics control panels: FMU R-2560

A case was received from FMU (MB) for Rate Running Contract of Symtronics control

panels for a contract period of 03 years-on STE basis through Mis Symtronics Automation Pvt.- ~~ - -.- -.--.--

~"'cI;!g.¥-~a.~ propos~ to conclllde.~~ RRq f~r 01,y~ars ~~~~~al!JiQnj'actor of 5% on service's-&

:Spares at the end..of everyYearl?f~e.co~tract..Th.~J:2HtI~ntra.ct va\uL f-r'the first year 'W~s

worked out as Rs 32;05,078/-. It w~s observed from the 'Population data sheet' that there were 04

types of panels and total number of panels was 74. However, while working out the estimated

cost, the total No. of panels waS worked 'Out as 296 (i.e. 74X4) which was incorrect. The

estimated cost was worked out to Rs 9,59,717/- for one year RC without escalation. The proposed

escalation factor of 5% every year was not agreed to by the IFA and the proposal was concurred

for Rs. 9,59,717/- resulting in a saving ofRs. 22,45,361/-.

Pr.IF A has seen. ~~(Anuradha Prasad)

Jt. CGDA (IFA)

CODYto:

1. JS & Add!. FA (A), MoD(Fin.) N. Delhi2. JS & Add!. FA (S), MoD (Fin.) N. Delhi .3. Jt. CGDA (AT-I), 4. Jt. CGDA (AT-II), 5. Jt. CGDA (AT-III)6. Jt. CGDA (Alc. & Budget) 7.1t. CGDA (Trg.-I) 8. Jt. CGDA (Trg.-II)9. Sr.Dy.CGDA(EDPS)-for infonnation with a request to host the circular on the CGDA website

at your end.10.Hindi Cell (Local)- for issuing Hindi version.

for kind information.

S ..\ Ur> .,~-

(Am.nradhaPrasad)Jt.CGDA (IFA)

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