PROCEDURE FOR CONCLUSION OF

ASC CONTRACTS

FOR PERISHABLE ITEMS

PC/RAKSHA/63060/Q/ST5/3633/D(QS) 26 Sep

2006

2

INDEX

Chapter/Section

Subject Page

Number(s) Para

Number (s)

Index

List of Appendices

List of Annexures

I INTRODUCTION 6 1 – 2

II REGISTRATION AND RE-VERIFICATION OF CONTRACTORS AND CONTRACT CARRYING CAPACITY

A Registration 7 3 – 13

B Fixing and Transfer of Contract Carrying Capacity

10 14 - 16

C Re-verification 15 17

III REMOVAL, SUSPENSION AND BANNING OF CONTRACTORS

A Performance of Contractor 17 18

B Removal from the Approved List of ASC Contractors

18 19 – 23

C Banning and Suspension 20 24 – 36

IV ACTION BEFORE RECEIPT OF TENDERS

A Advertisement and Working Out Approximate Requirement

27 37 – 42

B Issue of Tenders 29 43 – 47

C Earnest Money 31 48 – 54

3

Chapter/Section

Subject Page

Number (s) Para

Number (s)

V ACTION AFTER RECEIPT OF TENDERS

A Receipt and Processing of Tenders

33 55 – 62

B Rate Pattern for Contracts and Determination of Reasonable Rates

36 63 – 67

C Recommendation for Sanction/ Re-tender

38 68 – 76

VI COMBINATION, EXTENSION,

REVISION AND

TERMINATION OF

CONTRACTS

41 77 – 80

VII CONCLUSION 43 81 – 83

4

LIST OF APPENDICES

Appendix Subject Page

Number (s)

A Specimen Advertisement For Registration as Approved ASC Contractors

44

B Process for Registration of ASC Contractors

45 – 90

C Order for Suspension/Banning of

Firm

91

D Specimen of Advertisement for Tender Notice

92 – 93

E Imposition of Penalties on ASC Contractors on Default

94 - 97

F Instructions for Board of Officers detailed for Opening of Tenders

98 – 100

G Instructions for Procedure to be followed by the Panel of Officers

101 – 103

H Inputs to be Used for Determination of Reasonable Rates

104 – 105

J Principles for Combining/Splitting of the Contracts

106 – 107

K Rescission and Termination of Contracts

108 – 109

5

LIST OF ANNEXURES

Annexure to Appendix ‘B’

Subject Page

Number(s)

1 Letter to Applicant not Found Fit to be Registered as ASC Contractor

50

2 IAFS – 1521-X : Letter to Applicant Forwarding the Application for Registration

51 – 52

3 IAFS – 1521-Y : Application for Registration

53 – 79

4 IAFZ –2119 : Letter to District Authorities Regarding Verification of Antecedents of the Applicant for Registration

80 – 81

5 Letter to Bank Authorities Regarding Verification of Financial Details of the Applicant for Registration

82 – 83

6 Specimen Affidavit to be Signed by the Applicant as Regards his Movable/ Immovable Property

84

7 Check List for Scrutiny of the Application for Registration

85 – 88

8 Registration Certificate to be Issued to all Applicants Found Fit to be Registered as ASC Contractors

89 – 90

6

PC /RAKSHA/63060/Q/ST-5/3633/D (QS) Government of India Ministry of Defence New Delhi. 26th Sep 06

To, The Chief of the Army Staff New Delhi

PROCEDURE FOR CONCLUSION OF ASC CONTRACTS FOR PERISHABLE ITEMS

CHAPTER I

INTRODUCTION

Sir, 1. I am directed to convey sanction of the President for the adoption of revised procedure for conclusion of ASC Contracts for perishable items as contained in this letter. 2. The procedure has been laid out in following chapters: - (a) Chapter I. Introduction.

(b) Chapter II. Registration and Re-verification of Contractors and Contract Carrying Capacity.

(c) Chapter III. Removal, Suspension and Banning of Contractors.

(d) Chapter IV. Action before Receipt of Tenders. (e) Chapter V. Action after Receipt of Tenders.

(f) Chapter VI. Combination, Extension, Revision and Termination of Contracts.

(g) Chapter VII. Conclusion.

7

CHAPTER II

REGISTRATION AND RE-VERIFICATION OF CONTRACTORS AND CONTRACT CARRYING CAPACITY

SECTION A

REGISTRATION

3. Perishables and other items of ration required for consumption by troops and to be supplied by ASC, will be procured from registered ASC Contractors. Any person, being citizen of India, who wishes to supply articles of ASC responsibility, may apply to MGASC Command on a plain paper expressing his/her/their willingness to be registered as an ASC Contractor. 4. MGsASC Commands will insert advertisements annually, during the months of Nov/Dec, giving the types of contracts concluded in that Command and inviting potential suppliers to register themselves as ASC Contractors. A specimen of the advertisement to be published is placed at Appendix A. The advertisements will be published, in two National daily newspapers and two regional daily newspapers depending on the Command, through Director of Advertisement and Visual Publicity, Ministry of Information and Broadcasting, Government of India, New Delhi. In addition, the advertisement will also be put on the website of Army/ASC. 5. Procedure for Registration of ASC Contractors. The procedure to be followed for registration of prospective ASC Contractors and the duties of various ASC functionaries as regards the registration are given at Appendix B. Requisites for Registration 6. All applicants desirous of being registered as ASC Contractors will be required to pledge an FDR in favour of the concerned MGASC Command as a refundable fee for the purpose of registration. The value of such FDR will be 0.2 percent of the contract carrying capacity for which the applicant wishes to be registered as ASC Contractor and must be valid for minimum 06 years from the date of application. The said FDR will be renewed again at the time of re-verification of the Contractor. This FDR can be utilized by the MGASC for recovery of any

8

dues outstanding against the Contractor on behalf of the Government, in case the Contractor continually refuses to pay those dues despite intimations. This FDR will be returned to the Contractor in case he wishes to get de-registered from the list of ASC Contractors, after clearing all his dues towards the Government. However, in case of removal/suspension/banning of the applicant due to his default, this amount will be forfeited to the Government. As regards existing Contractors on the approved list, the Contractors will be asked to deposit such FDR within six months of the intimation to them after issue of this letter, failing which, re-verification of their firms will be ordered, irrespective of the date of their initial registration. 7. (a) Every precaution should be taken to ensure that only reliable

persons/firms of sound financial standing and experience in the line are registered as ASC Contractors. No one of doubtful integrity, loyalty and financial status will be placed on the approved list.

(b) The names of persons/firms will be placed on the approved list only when they produce a photocopy of PAN card and the last Income Tax Return filed by them. Those Contractors, whose names are already borne on the approved list, will be asked to produce a photocopy of their PAN card, within six months of the intimation to them after issue of this letter, failing which their re-verification will be ordered, irrespective of the date of their initial registration.

8. Contractors will be registered only for those items in which they are genuinely interested and in which they have been dealing in their normal course of profession and show some expertise. Contractors may be registered for one or more of the following items: -

(a) Meat dressed.

(b) Meat on Hoof (MOH).

(c) Fish.

(d) Chicken dressed/alive.

(e) Eggs.

9

(f) Potatoes.

(g) Onion.

(h) Vegetable fresh.

(j) Fruit fresh.

(k) Firewood all types.

(l) Lime quick.

(m) Charcoal.

(n) Ice (MM).

(o) Mineral/Aerated water.

(p) Milk.

(q) Butter.

(r) Bread.

(s) Any other article/services not included in the above and which is the responsibility of ASC to supply/provide.

9. Registration of Contractors will not be restricted to any station/stations, i.e. a Contractor registered for particular item(s) in a Command, will be free to quote for those item(s) in any station(s) of that Command. 10. If and when the applicant is registered as an approved ASC Contractor for any specific item(s), he/she/they will be informed accordingly by MGASC as per the letter given at Annexure 8 to Appendix B. If the applicant is not registered as an approved Contractor, he/she/they will be informed accordingly by MGASC as per the specimen letter given at Annexure 1 to Appendix B. 11. All approved ASC Contractors will be allotted a „Registration Number‟ after completion of their registration. MGASC will maintain an up-to-date list of approved ASC Contractors within his Command. The list will show all the particulars given in IAFS-1521 (Y) and IAFZ-2119

10

(revised). DDST Corps/DDST Area/CO ASC Bn/ADST Sub Area will also maintain up-to-date list in respect of their Corps/Area/Division/Sub Area. Copies of the list and amendments thereto will be forwarded to staff at all levels by the Executive Officers. 12. In addition to the „Approved list of ASC Contractors‟ following lists will also be maintained by the officers concerned: -

(a) An alphabetical list of the names of registered Contractors, showing pages in which the details as shown in the approved list will be found.

(b) Item-wise list of Contractors who have been registered in that Sub Area/Division/Corps/Area/ Command. The average value of the contract for its whole period should be shown at the head of each such list.

13. A consolidated list of approved ASC Contractors, as per para 11 above, will be sent to Integrated Headquarters of MoD (Army) by all MGsASC Commands so as to reach by 1st Jan each year.

SECTION B

FIXING AND TRANSFER OF CONTRACT CARRYING CAPACITY

14. Contractors will be registered for item(s) as specified by them in their application. The contract carrying capacity of Contractors will be fixed on the actual amount a Contractor is capable of investing in business in ASC contracts. Before fixing this capacity, it will be ensured that the prospective Contractor is capable of investing this amount, based on the details given by him regarding his movable and immovable assets and the capital already invested by him elsewhere. This information will be checked against the details obtained from civil authorities, banks and other conditions outlined in Appendix B. Following assets to the extent prescribed will be considered for fixing the contract carrying capacity: - (a) 100 percent value of: -

11

(i) Irrevocable Bank Guarantee from a scheduled commercial bank.

(ii) National Saving Certificates and/or other Small Saving Scheme Certificates (all issues) in his/her/their own name.

(iii) Immovable property in his/her/their own name, only if duly mortgaged in favour of Govt of India.

(iv) Govt Promissory Notes.

(v) FDRs.

(vi) In addition, all securities approved by the RBI, as available on their website will be considered in full.

(b) FDRs and all other financial instruments will not be allowed to be encashed during the period of registration.

(c) Movable property like vehicles, jewellery, cash etc. will not be taken into account.

(d) In case the immovable property is not mortgaged in favour of the Govt of India, only 50% value of the property will be taken into account. Also, immovable property being shown should be un-alienated and unencumbered.

15. The contract carrying capacity will be decided by multiplying twenty four times the amount, which the Contractor is capable of investing in ASC contracts. The Contractor for fresh supplies would then be grouped into any one of the three broad Categories viz Class „A‟ ,Class „B‟ and Class „C‟ as given below: -

(a) Class „A‟ Contractors. Contract carrying capacity of these Contractors would be above Rs 7.20 crores. They will be allowed to bid only for contracts sanctioned by GOsC Corps/Area, GOsC-in-C Commands and QMG under the delegated financial powers.

(b) Class „B‟ Contractors. Contract carrying capacity of these Contractors will be above Rs 2.40 crores and upto Rs 7.20 crores. These Contractors will be allowed to bid only for contracts that are sanctioned by Commanders Area/Division/ Sub Area, GOsC

12

Corps and GOsC-in-C Commands under the inherent financial powers.

(c) Class „C‟ Contractors. Contract carrying capacity of these Contractors will be upto Rs 2.40 crores. They will be allowed to bid only for contracts sanctionable by Sub Area Commander or their equivalent CFA‟s. Minimum amount a Contractor must invest in ASC contracts to be categorized in category C will be Rs 83000/- (arrived at by dividing Rs 20 lakhs by twenty four). (d) However, the restriction of classification of Contractors /firms for participation in contracts may be dispensed with for the contracts of meat group items, i.e. contracts of meat dressed, MOH, chicken/broiler, subject to the condition that value of all the contracts awarded to a registered Contractor shall not exceed his contract carrying capacity.

16. A Contractor can apply for transfer of his contract carrying capacity from one Command to another only after three years of his initial registration. In case a Contractor applies for transfer of his capacity from one Command to another, the following procedure will be followed: -

(a) MGASC of the parent command, where the Contractor is initially registered, will entertain request for transfer of capacity to another Command (s) only when he has seen the performance of the Contractor for at least one year in his Command, with effect from the date of his last revision of contract carrying capacity, if any.

(b) When a Contractor has shown satisfactory performance for the last one year, based on the criteria laid down vide Integrated Headquarters of MoD (Army) letter No 63148/Q/ST-5 dated 17 Dec 2003, and wishes to get upto 75 percent of his capacity transferred, MGASC Command will ask him to specify the amount and the Command(s) to which he wants his capacity to be transferred. MGASC Command will then forward his recommendations within 45 days of receipt of such application along with the application of the Contractor to the MGASC of the Command to which the Contractor wishes capacity allocated. A copy of this communication along with copy of the application of the Contractor will also be sent to Integrated Headquarters of MoD

13

(Army) (ST-5). While forwarding the recommendations, MGASC of the parent Command will invariably forward the details of contracts held by the applicant in his Command during the last three years and his performance. In case the Contractor‟s performance has been unsatisfactory, MGASC of the parent Command has the right to deny the Contractor the transfer of his contract carrying capacity for additional two yrs based on the performance report on the contracts undertaken by him and recommendations of the technical heads of lower formations on such performance reports.

(c) On acceptance of the contract carrying capacity by the MGASC of the Command to which it has been transferred, the parent MGASC will forward a certified true copy of all documents in respect of the subject Contractor taken from him at the time of registration/re-verification to the former MGASC.

(d) The capacity once transferred from the parent Command will be reduced from his overall contract carrying capacity of the parent Command and will be awarded contracts according to the revised contract carrying capacity. He may be awarded contracts in other Command(s) based on the contract carrying capacity transferred by the MGASC of the transferred Command.

(e) The option regarding quantum of contract carrying capacity once exercised would be final. No revision/transfer of contract carrying capacity will be permitted once the tendering process in any Command has commenced, i.e. from 15 Dec to 31 Mar and 15 Jun to 30 Sep every year. The contract carrying capacity, however, will not be revised more than once in two years. This will include all kinds of revision of contract carrying capacity, i.e. increase/decrease or transfer of contract carrying capacity to any Command, re-verification, etc.

(f) Any disciplinary action taken by either MGASC will be communicated to the other MGASC, under intimation to Integrated Headquarters of MoD (Army) (ST-5).

(g) In case a Contractor is removed from the list of approved Contractors of the parent Command, the registration papers of such Contractor will be forwarded to the MGASC to whom the contract carrying capacity has been transferred. If the Contractor is still borne on the list of two MGsASC, the papers will be

14

forwarded to the MGASC in whose Command the Contractor has more capacity. However, if a Contractor has been removed from the list of approved ASC Contractors on any grounds, the contract carrying capacity of the Command from which he was removed will not be available in the transferred Command(s). Also, he will not be allowed to apply for enhancement of his contract carrying capacity in the other Command(s) till his normal re-verification is due.

(h) Each time the contract carrying capacity is transferred from one Command to the other, Integrated Headquarters of MoD (Army) will be kept informed. However, if the request of the Contractor for transferring capacity and for items requested for is turned down by one of the MGsASC, the entire case giving detailed reasons for such a decision will be communicated to DGST, Integrated Headquarters of MoD (Army) for his directions.

15

SECTION C

RE-VERIFICATION 17. Review and re-verification of Contractors will be done as per the policy given below: -

(a) The approved list of Contractors will be reviewed by the officer maintaining the same at least once a year.

(b) Re-verification of registered Contractors will be carried out every five years. The Contractor, wishing to continue doing business with ASC, will have to apply for re-verification at least six months prior to the expiry of his registration. However, in case anything adverse is brought to the notice of authorities at any time by an official source, immediate action will be taken on these reports and re-verification of such Contractor(s) would be carried out based on these reports.

(c) Re-verification will be necessary each time a Contractor applies for re-categorization/enhancement of contract carrying capacity in the same category, which he will be permitted to do, not more than once in two years. (d) The process of re-verification will not be completed till such time all formalities required for initial registration have been complied with and fresh registration letter issued to the Contractor by the MGASC. No tenders for regular contracts and short-term agreements commencing after the date of validity of initial registration of the Contractor will be issued to the Contractor till the re-verification is completed. He will, however, be permitted to participate in tendering activity as unregistered Contractor for Local Purchase only.

(e) In case any registered ASC Contractor does not apply for re-verification, or does not intend to continue business with ASC at any time in any Command, he may apply to the concerned MGASC to get himself de-registered. The concerned MGASC will de-register the Contractor only after all dues in favour of Government have been recovered from the Contractor and there is nothing outstanding against him. In case any registered ASC Contractor does not apply for re-verification and his registration expires, he

16

will be removed from the approved list of ASC Contractors by the concerned MG ASC. However, the liability of the Contractor towards any dues to the Government, and to continue operation of any on-going contract(s) will remain, till completion of the said contract(s).

17

CHAPTER III

REMOVAL, SUSPENSION AND BANNING OF CONTRACTORS

SECTION A

PERFORMANCE OF CONTRACTORS 18. A proper record of the performance of each Contractor, based on the criteria laid down vide Integrated Headquarters of MoD (Army) letter No 63148/Q/ST-5 dated 17 Dec 2003, will be maintained by Executive Officer. Following factors will be borne in mind while assessing the performance of Contractors: -

(a) Number of times, a Contractor has failed to meet his contractual obligations or violated any terms and conditions of the contract.

(b) Failure to employ adequate technically trained staff and infrastructure for smooth running of the contract.

(c) In case a contractor fails to supply more than 30% of the contracted monthly requirement for the month, or has more than 05 failures in a month, or has more than 15 failures aggregate, his contract will be recommended for recession by the Contract Operating Officer/Executive Officer. For the purpose of this provision, a „failure‟ will be deemed to have occurred if the Contractor fails to supply at least 90 percent of quantity of the demand of item placed on him for that day. The final decision for rescinding the contract will however rest with the Competent Financial Authority, who, before taking the final decision, should take into account the reasons for failure on part of the Contractor and existence of any conditions beyond the control of the Contractor, e.g. strike/natural calamity, etc.

18

SECTION B

REMOVAL FROM THE APPROVED LIST OF ASC CONTRACTORS 19. (a) MGASC Command, who is competent authority to include

the name of a firm in the list of approved Contractors maintained by him will also be competent to order the removal of a firm from the list of approved Contractors. If any Contractor is to be removed from the approved list for a particular reason, ADST Sub Area/CO ASC Bn or DDST Area/Corps concerned will forward their recommendations alongwith detailed reasons to MGASC Command, who will decide whether the Contractor should be removed from the list or not. In either case, detailed reasons for his decision will be recorded by the MGASC and will be communicated to the Contractor and Integrated Headquarters of MoD (Army) (ST- 5).

(b) In case of removal, the Contractor has the right to appeal against the decision of MGASC to the DGST. In case of such appeal, DGST may review the case for removal of the Contractor afresh and pass any orders as deemed necessary by him.

(c) A firm, after due investigation wherever necessary, may be removed by the competent authority from the list of approved ASC Contractors on any of the following grounds:-

(i) On account of its poor performance based on the performance reports forwarded by the Contract Operating Officer/Executive Officer or other disabilities.

(ii) If the firm, by any unreasonable and baseless acts of commission or omission, impedes, retards, delays or vitiates in any manner, the process of concluding a contract or operation of a contract.

(iii) Does not participate in any tendering activity for two consecutive years.

(iv) Fails to secure a contract during a period of three consecutive years.

(v) Obtains tender forms for a contract but does not participate in the tender.

19

(vi) In four consecutive invitations to tenders, quotes obviously fictitious rates, which are twenty percent or more below the reasonable rates fixed by the Panel of Officers.

(vii) Fails to execute a contract or a short-term agreement secured by him.

(viii) No longer has the technical staff or equipment considered necessary for execution of the contracts secured by him.

(ix) Violates any terms and conditions of the contract deed or is found to have made false declarations in his registration documents.

(x) Is declared bankrupt or insolvent or his financial position becomes unsound, and in case of a limited company, it is wound up or taken into liquidation.

20. Order regarding removal of a Contractor from the approved list will be endorsed to Integrated Headquarters of MoD (Army) (QMG‟s Branch/ST-5), all Commands, and other relevant Corps/Area/Division/Sub Area or other Government departments.

21. Procedure for Removal of a Contractor. Before a decision is taken to remove the name of a firm from the list of approved Contractors for any one of the reasons contained in Para 19 (c) above, a „show-cause‟ notice will be served asking him/her/them to explain as to why the proposed action should not be taken. On receipt of a reply to the show cause notice, the case will be examined and a decision taken by the competent authority. Orders removing firm from the list of approved Contractors will be communicated to the firm together with reasons thereof, under intimation to all concerned. It will, however, be made clear in the order that it is open to the firm/Contractor henceforth to tender as an unregistered firm/Contractor for local purchase only. 22. Implication of Removal.

(a) Removal does not carry much of a stigma with it and is for minor offences as given in Para 19 (c). Removal of firm/ Contractor from one list of approved Contractors of a Command

20

does not necessarily mean that he/she/they should be removed from the list of other Commands, where he/she/they may be rendering useful services.

(b) A firm with whom business dealings have been suspended or banned shall be automatically removed from the list of approved Contractors. The fact of such removal will be communicated to the firm along with the reasons.

23. Re-instatement of „Removed‟ Contractors. Once removed, the name of a firm/Contractor may not be restored on the approved list unless it/he satisfies the normal registration requirement and the Competent Authority is satisfied that the firm/Contractor should be registered. In no case, however, the reinstatement shall be effected within two years from the date of firm‟s/Contractor‟s removal from the approved list. Further material changes in circumstances leading to re-instatement will invariably be intimated to the DGST.

SECTION C

BANNING AND SUSPENSION Banning of Contractors 24. Banning of business dealings with a firm/Contractor shall be of two types: -

(a) Banning by one Ministry including its attached and subordinate offices.

(b) Banning by all Ministries including their attached and subordinate offices.

25. The grounds on which banning may be ordered are: -

(a) If security considerations including the question of loyalty to the State, so warrant.

(b) If the proprietor of the firm, its employee, partner or representative is convicted by a Court following prosecution by the Central Bureau of Investigation (CBI) or any other investigating

21

agency or under normal process of law for offences involving moral turpitude in relation to business dealings.

(c) If there is a strong justification for believing that the proprietor or employee or representative or a partner of the firm has been guilty of malpractices, such as bribery, corruption, fraud, substitution of tenders, interpolation, misrepresentation, evasion or habitual default in payment of any tax levied by law or any other act of dishonesty aimed at causing a wrongful loss to the State.

(d) If the firm continuously refuses to return Government dues without showing adequate cause and Government is satisfied that this is not due to a reasonable dispute, which would attract proceedings in arbitration or court of law.

(e) If the firm employs a Government servant, dismissed or removed on account of corruption or employs a non official convicted for an offence involving corruption or abetment of such an offence, in a position where he could corrupt Government servants.

26. Banning only by Ministry of Defence.

(a) An order for banning business dealings with an ASC Contractor shall be passed by Ministry of Defence. It will, however, be open to Ministry of Defence to consult the Department of Food, Ministry of Consumer Affairs, Food and Public Distribution, if necessary.

(b) Such an order may be passed in cases where the offences are not considered serious enough to merit banning by all Ministries including their attached and subordinate offices, but at the same time an order merely removing the name of the firm from the list of approved Contractors is not considered adequate.

(c) It shall be passed for a specific period.

(d) It shall be extended to the allied firms also.

(e) It shall not be circulated to other Ministries/ Departments but shall cover all the attached/subordinate offices of Ministry of

22

Defence. A copy of the order, however, will be sent to the Department of Food, Ministry of Consumer Affairs, Food and Public Distribution.

(f) No contract of any kind whatsoever shall be concluded with a banned firm including its allied firms after issue of the banning order. Contracts concluded before the issue of the banning order shall, however, not be affected by the banning order.

(g) An order for banning on account of doubtful integrity, loyalty or security consideration will be issued only after consultation with Ministry of Home Affairs.

27. Banning by all Ministries.

(a) Banning of a firm by all Ministries including their attached and subordinate offices and the revocation thereof shall be ordered by the Department of Food, Ministry of Consumer Affairs, Food and Public Distribution.

(b) A banning order passed in respect of a firm shall be extended to all its allied firms.

(c) Such an order shall be endorsed to and automatically implemented by all Ministries/Department including their attached and subordinate offices.

28. A banning order shall specify: -

(a) The specific period (permanent, if required) for which it will be effective; and

(b) The name of Sole Proprietor, all the partners, Directors etc of the proprietorship firm, company and its allied concerns.

Procedure for Banning 29. Reporting of Potential Banning Cases. The Corps/Area/Division/Sub Area Commander, after satisfying himself that a firm/Contractor should be banned, will submit his recommendations along with detailed reasons to Headquarters Commands. If Headquarters Commands agree with the

23

recommendation of the Formation Commander, they will submit a report to Integrated Headquarters of MoD (Army) (QMG Branch/ST-5), which will, inter-alia, contain information on the following points: -

(a) Reasons due to which banning is recommended.

(b) Period (whether indefinite or specific) for which banning is recommended.

(c) Names of Sole Proprietor, all the partners, directors etc of the Contractor/proprietorship company/firm and its allied concerns to whom such orders would also apply.

(d) All firms/companies, which come within the sphere of effective influence of the banned/suspended firms/ proprietorship/companies, shall be treated as allied firms. In determining this, the following factors may be taken into consideration: -

(i) Whether the management is common.

(ii) Majority interest in the Management is held by the partners or directors of banned/suspended firms/ companies.

(iii) Substantial or majority shares are owned by the banned/suspended firms, their directors/shareholders and by virtue of this it has a controlling voice.

30. The Ministry of Defence being the ultimate authority to decide as to whether banning proceedings are to be launched against a firm/Contractor, all cases which can be construed to attract banning in terms of Para 25 of this letter, including those wherein Integrated Headquarters of MoD (Army) or authorities subordinate to it do not recommend banning, shall be referred to Ministry of Defence for decision. 31. Ministry of Defence will appoint an officer/officers to conduct proceedings to ban business dealings with the firm. The officer/officers will be competent to consider the proposals and in appropriate case issue notice to show cause to the firm as to why business dealing of the Government should not be banned/suspended with the firm and

24

consider the replies of the firm to the show cause notice. In conducting these proceedings the nominated officer(s) will act in a quasi-judicial capacity and will work independently. The orders for banning will be passed by the Ministry of Defence as stated in Para 26 above on the recommendation of the officer(s) conducting the proceedings. In the order of suspension or banning business dealing with the firms, reasons for banning/suspension will be intimated. A form in which such an order will be passed is placed at Appendix C. 32. Implications of Banning.

(a) An order for banning implies that all departments of the Government of India as specified in the banning letter are forbidden from dealing with the Contractor. Headquarters Commands will be informed by Integrated Headquarters of MoD (Army) (AG/Coord) of the name of banned firms/ Contractor(s), through a secret communication.

(b) The fact of banning and reasons thereof shall be communicated to the Contractor.

(c) The issue of banning orders shall normally involve immediate cessation of all future business with the Contractor(s)/firm(s) by all units/formations.

(d) Particular care will be taken by MGsASC/DDsST/COs ASC Bn/ADsST to ensure that the banned firm/Contractor is not registered as an approved Contractor under a different name to transact business with the Government. (e) Even in case of risk purchases, no contract/short term agreement/order/demand shall be placed with a banned firm.

Suspension of Business with Contractor(s) 33. Suspension of business may be ordered where, pending full inquiry into the allegations, it is not considered desirable by the competent authority that business with the firm(s)/Contractor(s) should continue. Such an order may be passed: -

(a) If the firm/Contractor is suspected to be of doubtful integrity and loyalty to INDIA.

25

(b) If the Central Bureau of Investigation or any other investigating agency recommends such a course in respect of case under investigation; and

(c) If the competent authority is prima facie of the view that the firm/Contractor is guilty of an offence involving moral turpitude, in relation to business dealings which, if established, would result in business dealing with it/him being banned.

34. (a) An order of suspension on account of doubtful integrity and

loyalty shall be passed by the Department of Food, Ministry of Consumer Affairs, Food and Public Distribution, in consultation with Ministry of Home Affairs and will be communicated to Headquarters Commands by Integrated Headquarters of MoD (Army) AG‟s Branch (AG Coord). Such an order will be extended to the allied firms.

(b) An order for suspension for other reasons shall be passed by QMG Integrated Headquarters of MoD (Army)/ GOsC –in –C Commands / GOsC Corps /Area / Division/ Communication Zone Area and Commanders Sub Area / Brigade/ Communication Zone Sub Area / Indep Brigade Group / Indep Communication Zone Sub Area. This order will also be extended to the allied firms.

35. Revocation of Orders of Banning/Suspension.

(a) An order for banning/suspension passed for a certain specific period shall be deemed to have been automatically revoked on the expiry of that specified period and it will not be necessary to issue specific information of revocation, except that an order of suspension/banning passed on account of doubtful integrity, loyalty or security consideration shall continue to remain in force until it is specifically revoked.

(b) An order of banning for the reasons mentioned at Para 25 (b) above may be revoked if in respect of the same facts, the accused has been wholly exonerated by Court of Law and the appeal has been filed in this regard.

26

(c) A banning/suspension order may, on review, be revoked by the Competent Authority if it is of the opinion that the disability already suffered is adequate, in the circumstances of the case.

Maintenance of List of Banned Firms 36. (a) Department of Food, Ministry of Consumer Affairs, Food and

Public Distribution will keep an up-to-date list of firms against whom orders of banning by all Ministries including their attached and subordinate offices have been issued, and circulate every quarter, a list of additions and deletions during the previous quarter to all other Ministries. Such lists will be communicated to Headquarters Commands by Integrated Headquarters of MoD (Army) AG‟s Branch (AG/Coord).

(b) All MGsASC/DDsST/COs ASC Bn/ADsST will maintain an up-to-date list of ASC Contractors who have been banned and suspended, and no business dealings are to be entrusted to them.

27

CHAPTER IV

ACTION BEFORE RECEIPT OF TENDER

SECTION A

ADVERTISEMENT AND WORKING OUT APPROXIMATE REQUIREMENT

37. (a) Advertisement will be issued by MGsASC Commands in

respect of each contract whose value exceeds Rs 20 lakhs in two National Newspapers and in two regional Newspapers.

(b) The advertisement will be published four weeks in advance before the date of initial tendering by MGsASC Commands through Director of Advertisement and Visual Publicity, Ministry of Information and Broadcasting (DAVP). For subsequent re-tender, the advertisement will be published two weeks in advance in one regional and one National Newspaper only, under the arrangement of respective Executive Officer and need not be routed through DAVP.

(c) The expenditure incurred by Commands on these advertisement will be met out of the budget head 800B (a) 3(a).

(d) Advertisement will be published as per format given at Appendix D.

Working of Approximate Requirements 38. The approximate requirements may be worked out on the following basis: -

(a) Present actual feeding strength x scale x period = „A‟ quantity.

(b) Average quantity actually drawn during the last three years = „B‟ quantity. (c) Quantity required based on the anticipated increase/ decrease in the strength during the currency of the contract

28

(strength x scale x period) less quantity to be obtained from soldier‟s garden produce and unit Dairies = „C‟ quantity.

(d) Average of quantities „A‟, „B‟ and „C‟ will give the Approximate Requirement.

(e) Due allowance will also be made for any other factors which may affect future consumption such as permanent or temporary increase or decrease in the garrison, alteration in ration scales, turnover of tinned items in Supply Depots and so on.

(f) Anticipated increase/decrease in the strength would be obtained from the Staff by the Executive Officers at all levels.

39. Estimated Value of the Proposed Contracts. This will be worked out on the basis of approximate requirement of the item(s) at the current contract rates. This would enable the Executive Officers to determine CFAs for sanctioning respective contracts. Average Local Market Rates 40. Station Commander will convene a monthly Station Board of Officers, with presiding officer other than an ASC officer. The Station Board will obtain the local market rates of those items for which ASC contracts are concluded by visiting the market in person. The Station Commander will countersign these board proceedings, and one copy each of these proceedings will be forwarded to the concerned CDA/IFA and the Executive Officer. These rates will be taken into consideration by the Panel of Officers for formulation of Reasonable Rates. Call for Tender 41. NO individual call notices inviting Contractors to quote rates for different items/station will be sent to them except in case of contracts whose value is Rs 20 Lakhs and below. In addition to the advertisement published in newspapers in accordance with Para 37 above, a notice giving details of various contracts to be concluded by various Executive Officers will be displayed prominently on the notice boards, outside their respective offices. In addition, similar notices will also be displayed at the notice boards of all Supply Depots within that Command. This notice will be pasted on the day when advertisement has been sent for publication in the newspaper(s).

29

42. MGsASC Command will draw a comprehensive plan, based on the broad dates given by Integrated Headquarters of MoD (Army) (ST-5), well in advance for opening of tenders at different Formation Headquarters and intimate the same to all concerned, including Integrated Headquarters of MoD (Army) (ST-5). This will enable the concerned CDA/IFA to plan and co-ordinate the move of their officers to different locations. It will also enable the Contractors to participate in tendering activity at different locations.

SECTION B

ISSUE OF TENDERS

43. A mandatory four weeks notice between the date of issue of call notice and opening of tenders will be given. In case of re-tender, this period may, however, be reduced to two weeks. 44. (a) An approved Contractor may be issued with tenders as

desired, the total value of which does not exceed his contract carrying capacity, as laid down vide Para 15 above.

(b) NO Contractor should be granted contracts in excess of his contract carrying capacity. In case, however, the CFA is of the view that exceeding contract carrying capacity is in public interest, Contractor may be allowed to exceed upto 25% of their contract carrying capacity by respective CFAs.

(c) If an approved Contractor applies for tender of higher value contracts, he may be issued tenders after obtaining approval of the concerned CFA. Tender of such Contractors should normally be considered only if enhancement of the contract carrying capacity is approved by the MGASC concerned by the time tenders are opened, but in case his tendered rate(s) is/are the lowest, the tender may be accepted/rejected after obtaining the approval of concerned CFA. If the CFA is satisfied that such a course is in the public interest, he may sanction contract in his/her/their favour even though the value of the contract is in excess of his/her/their contract carrying capacity.

(d) In case where a Contractor is already operating a contract, his balance contract carrying capacity available for new contracts

30

would be his total capacity less the value of contract(s) which will remain operative on the date of commencement of new contracts.

Tender Fee 45. A uniform tender fee of Rs 100/- (Rupees one hundred only), to be collected in form of postal order/treasury receipts, will be levied for each set of tender documents for regular contracts and short term agreements. The postal order/treasury receipt number and date shall be quoted on the first page of the tender form, prior to issue of tender form to any Contractor. Postal Order and Treasury Receipt will be drawn in favour of the concerned Regional CDA/Area Accounts Office. Details of tender fee received and forwarded to CDA will be maintained by the Executive Officers in a register showing the following details: -

(a) Details of tender including articles and period covered by it. (b) To whom issued.

(c) Number and date of communication under which tender was issued, if applicable.

(d) Number, date and amount of Postal Order/Treasury Receipt furnished by the Contractor together with the treasury at which lodged.

(e) Number and date of communication under which treasury receipt was forwarded to the CDA concerned.

(f) Number and date of CDA‟s acknowledgment. 46. Tender fee will not be charged from Government Departments like Farms, Forests, and Jails, etc. Similarly, when tenders received are unsatisfactory due to any errors on the part of Government and re-tendering has to be resorted to, no fee will be charged from those Contractors who submitted tender in the first instance. In case of short term agreements, when time is at premium, the tender fee may be collected in cash on the spot and deposited into the treasury and receipt forwarded to CDA concerned. Cash will not be handled by anybody other than an officer. 47. A Contractor/firm will be issued with only one set of tender forms for one item/group of items.

31

SECTION C

EARNEST MONEY

48. Each tender must be accompanied by requisite amount of earnest money. Details of earnest money to be lodged by the tenderers will be recorded on the top of the first page of IAFZ-2120. The amount of earnest money will be worked out at one percent of total value of the contract at current contract rates and it should be rounded off to nearest hundred. 49. Earnest money may be deposited in any of the following forms: - (a) By remitting cash in Government treasury. (b) Demand drafts from Scheduled Banks.

(c) Deposit At Call Receipt of Scheduled Banks (including the State Bank of India and its subsidiaries approved under the Bank Guarantee Scheme).

(d) Fixed deposit receipt, in original. 50. Tenders unaccompanied by Earnest Money or accompanied by insufficient earnest money will be entered in the Comparative Statement of Tenders (CST) separately by Board of Officers opening the tenders. The decision to reject or to accept such tenders will be taken by the panel of officers consisting of the representatives of ASC, CDA concerned and CFA keeping in view the interest of the State. Detailed reasons will be recorded in the panel proceedings for accepting/rejecting such tenders. However, such tenders should not be accepted as a matter of routine. While rejecting such tenders, the earnest money will be returned immediately.

32

51. The earnest money of all tenderers will be retained till finalization of deliberations by the Panel of Officers (including invitation offer, if any). Thereafter, earnest money of only three lowest tenderers will be retained till sanctioning of the contract. However, if the earnest money of any of the three lowest tenderers is released inadvertently, the same amount can be recovered from the payments due to such Contractors against any other contracts being operated by them. Earnest money in respect of the remaining tenderers, including those who have not participated in the tendering process, will be refunded immediately thereafter. 52. In case retender is ordered, earnest money deposited earlier pertaining to the item(s)/ station(s), will be refunded immediately, when retender is ordered. 53. Earnest money of a successful tenderer will be refunded as soon as the security deposit has been furnished unless it is used as a part of security deposit. 54. As regards imposition of penalties on ASC Contractors on default on the subject of forfeiture of earnest money, refer to Rule 243 of Financial Regulations Part I, and Appendix E.

33

CHAPTER V

ACTION AFTER RECEIPT OF TENDER

SECTION A

RECEIPT AND PROCESSING OF TENDER 55. Tender will not be received by hand. All tenders will be deposited by the tenderers in a locked and sealed box whose keys will be under the safe custody of the Executive Officer. No tender will be received after the hour and date published in the newspaper and as stated in IAFZ-2137A. The Executive Officer will be responsible to ensure that all tenders received by post are placed in the box, before the expiry of the said time and date. 56. Opening of Tenders. A Board of Officers, detailed by the Formation/Station Headquarters, consisting of a representative from staff, a representative of Executive Officer concerned and one more officer/JCO detailed by Formation Headquarters, will open the tenders on the date and time fixed for the same. The Board of Officers will meet the Executive Officer for briefing one day prior to the date for opening of tenders. Thereafter, the Board of Officers will assemble on the specified date and time, and open the sealed tender boxes in the presence of tenderers. The detailed instructions for the procedure to be followed by the Board of Officers are given at Appendix „F‟ attached. This Board of Officers is independent of the Panel of Officers and will be responsible to the competent financial authority for their actions. The Panel of Officers will not be held accountable for any default on part of the Board of Officers. Level of Processing 57. Tenders will be opened and processed as under: - (a) QMG Contracts - MGASC Command. (b) GOC-in-C Contracts - MGASC Command. (c) GOC Corps Contracts - DDST Corps.

(d) GOC Division Contracts - CO ASC Bn.

34

(e) Area Commander Contracts - DDST Area. (f) Sub Area Commander Contracts -ADST Sub Area. Comparative Statement of Tenders 58. Following information, to the extent possible, will be shown on the comparative statement of tenders: - (a) Details of services/supplies tendered for. (b) Approximate requirement stated in the schedule.

(c) Contract rates for the item during last three corresponding years. (d) Anticipated value of contract at the current contract rates to be entered in the column periodic vocabulary rates in the CST.

(e) Rates quoted by different tenderers, serial wise.

(f) Estimated cost.

59. Each CST will be a complete document in itself. All decisions regarding invitation offers and orders passed for re-tendering by various authorities will be recorded in writing on the CST so that complete flow pattern of the conclusion of the contracts can be studied. Detailed recommendations in respect of each case duly signed by members of the Panel of Officers and intermediary CFA will be pasted in the CST at relevant places and pages serially numbered. Composition of Panel of Officers 60. The tenders pertaining to ASC contracts, after having been opened by the Station Board of Officers as prescribed above, will be examined by the Panel of Officers at Headquarters Command/Corps/Division/ Area/ Sub Area. As far as possible the composition of the Panel of Officers will not be changed till such time the contracts for a season are concluded, except for exceptional circumstances and with explicit approval of the CFA. Under no circumstances, the CFA rep should be from ASC. The composition of the Panel of Officers will be as under: -

35

(a) Executive officer as specified, for different contract sanctioning authorities and as indicated in Article 299 of the Constitution of India.

(b) Representatives of Formation Commanders at appropriate level, including representatives of Air Force/ Navy, where required.

(c) Representatives of respective CDA/IFA. 61. Following guidelines are laid down for the rank structure of the panel of officers: - (a) Contracts to be processed at Command Headquarters. (i) Executive Officer - MGASC (ii) Rep of Formation - An officer not below Commander the rank of Maj Gen (and equivalent rank in Air Force/Navy) (iii) Rep of the CDA/IFA - An officer not below the rank of ACDA/

Dy IFA

(b) Contracts to be processed at Corps/Area/Division Headquarters.

(i) Executive Officer - DDST Corps/Area/

CO ASC Bn

(ii) Rep of Formation - An officer not below Commander the rank of Brig/Col (and equivalent rank in Air Force/Navy) (iii) Rep of CDA/IFA - An officer not below the rank of ACDA/ Dy IFA (c) Contracts to be Processed at Sub Area Headquarters.

36

(i) Executive Officer - ADST. (ii) Rep of Formation - An officer not below Commander the rank of Lt Col (and equivalent rank in Air Force/Navy) (iii) Rep of CDA/IFA - An officer not below the rank of ACDA/

Dy IFA Action by Panel of Officers 62. The Panel of Officers mentioned above will be responsible to examine the tendered rates in hand in relation to the Reasonable Rates which would have been decided earlier on by them as given in Para 63, 64 and 65 below. Firm, date and time for meeting of the Panel of Officers will also be communicated by the Executive Officer to the concerned CDA/IFA well in advance to enable them to participate in the deliberations. The detailed instructions for procedure to be followed by the Panel of Officers are given at Appendix G.

SECTION B

RATE PATTERN FOR CONTRACTS AND DETERMINATION OF REASONABLE RATES

63. The inputs that will be used for determining the Reasonable Rates (RR) are listed at Appendix H. Some guiding principles to be kept in mind while formulating RR are as under:-

(a) Need to strike a balance between securing contracts at Reasonable Rates, and settling for rates that are so low that they impinge adversely on the quality of rations supplied.

(b) Need to conclude contracts in time, as the non-conclusion of contracts will result in retendering and subsequent local purchase, which apart from being detrimental to the interest of the Government, may also set an unhealthy trend of higher rates for future contracts.

37

(c) Need to bring parity in rates at stations where similar conditions prevail, and remove inter-service disparities in rates of various items.

(d) Need to give priority to preference of troops within the

constraints of laid down regulations.

(e) A drastic drop in rates on account of unhealthy competition during past three years, resulting in unrealistic current/expired contract rates.

64. The extent of weightage given to the relevant factors listed in Appendix „H‟ attached should be compiled carefully, based on the authenticated and reliable data/information. Towards the end, it should be matched with the prevalent local market rates in that station, after building in a realistic depression factor for the bulk supply. 65. Based on the above deliberations, the Panel of Officers, whose composition is given at para 60 above, will arrive at „Reasonable Rates‟ (RR) for each item and station. The RR will be in terms of the actual cost in case of meat group items and in terms of percentage increase/decrease over current contract rates in case of all other items. However, even for combined item contracts, the Panel could endeavour to arrive at a minimum acceptable rate for each individual item. 66. The information about formulation of reasonable rates will be kept as a closely guarded secret and under no circumstances will be divulged to persons other than Panel of Officers. To maintain sanctity of the rates, the Panel of Officers will work out reasonable rates on the same date and time when the tenders for those item/stations are being opened. In case there is a difference of opinion among the panel members regarding fixation of reasonable rates, a dissent note by the dissenting member will be attached to the Panel Proceedings. The final decision will then be left to CFA.

67. The reasonable rates once determined will be put down in writing, signed by the Panel of Officers and will be kept in a sealed cover along with their worksheets. In case there is a difference of opinion among the Panel members regarding fixation of reasonable rates, both the rates will be sealed along with their worksheets and the dissent notes of the Panel members. NO change will be made to those rates thereafter.

38

Those rates will then be attached to the comparative statement of tenders for perusal by the sanctioning authorities. However, to maintain confidentiality of the reasonable rates, no mention of the same or its relationship with the tendered rates will be made explicitly in any document, and only words to the effect „marginally/excessively above/below reasonable rates‟ will be endorsed in the comparative statement of tenders /panel proceedings. Normally reasonable rates once fixed will not be revised. However, if it is felt that circumstances warrant revision of reasonable rates due of unavoidable reasons, detailed justification for the same will be given in the panel proceedings.

SECTION-C

RECOMMENDATION FOR SANCTION/RE-TENDER

68. If the lowest tendered rates (LTR) at the time of opening of tenders are found to be at par or below the Reasonable Rates determined by the Panel of Officers, the tender will be recommended for sanction in favour of the lowest tenderer. In such case no invitation offer will be made. 69. If LTR is higher than RR, an invitation offer should be made only to the lowest tenderer by calling him for negotiations with the Panel of Officers. The lowest tenderer will be asked to give his revised offer in writing. The Panel will then take decision whether to recommend the contract for sanction or retender, depending upon the comparison of the offered rates with the reasonable rates.

70. In case rates quoted are lower than 20% of reasonable rates, the same will be treated as fictitious and rejected by Panel of Officers. No relaxation must be given even if the rates are 20.01% below reasonable rates. Action should be taken against tenderers, as per the prescribed procedure. However the decision to reject such tenders may be taken by the Panel only after discussion with tenderer and reasons for rejection/acceptance should be recorded in panel proceedings. The provisions of this para will not be applicable to Ice (MM) and wheat grinding contracts. 71. In case identical lowest rates are obtained from more than one tenderer either at the time of opening of tenders or after the invitation offer, another invitation offer will be made to both the tenderers who had quoted identical rates. This process will be carried out in the room where the panel is assembled and under no circumstances the

39

tenderers will be allowed to leave the room. The revised rates quoted by both the tenderers will be announced in their presence. Thereafter, tenders may be recommended in favour of the tenderer who quotes the lowest rates. 72. In case where the recommendations of the Panel of Officers are not unanimous, contracts may be sanctioned in terms of Para 240 of the Financial Regulations Part I by the appropriate CFA. Retender 73. Retendering will be ordered by the respective CFA in cases where the Panel of Officers is unanimous in their recommendations for retendering and the CFA agrees with the recommendations of the Panel of Officers. Also, in case the recommendations of the Panel of Officers are not unanimous, the CFA will take final decision regarding the contract in accordance with Para 240 of Financial Regulations Part I. However, in case of a difference of opinion between the recommendations of the Panel of Officers and the CFA, the decision will be taken by the next higher CFA. In such cases, the CFA will clearly endorse his reasons for not agreeing with the recommendations of the panel, and the final decision will be taken by the next higher CFA. 74. In case the panel of officers considers that though more than three tenders have been received and yet, genuine competition has not been achieved, the panel of officers may recommend for retendering, recording clearly the reasons for their recommendations. The panel of officers should look into this aspect and make a reasoned recommendation on genuine competition. Financial Powers for Conclusion of Contracts 75. The financial powers for sanctioning of fresh supplies contracts would be as per existing Govt orders on the subject as amended from time to time.

40

Conclusion of Contracts with State/Central Government Sponsored Bodies and Cooperative Societies 76. Negotiated contracts with State level PSUs/ Cooperative Societies, in which State Govt have some equity, may be concluded with prior approval of the Govt. NO price preference will be afforded to Central Government/State Government Undertakings, unless otherwise clearly notified by the Bureau of Public Enterprises after satisfying themselves that the Central/State Government undertakings are partly or wholly financed by the Central/State Govt. Local military authorities will also satisfy themselves about the genuineness of Cooperative Societies primarily being of growers and breeders before allowing any facility or preferences to them and also check the availability of adequate infrastructure for operation of the contracts. A careful watch must be kept for Contractors forming such Societies to obtain for themselves undue benefits.

41

CHAPTER VI

COMBINATION, EXTENSION, RECESSION AND TERMINATION OF CONTRACTS

77. Combining of Contracts. In order to ensure smooth running of contract and procure better quality of fresh supplies, combining of contracts may be done by contract concluding officers. It would be advisable to combine contracts of items of same species such as meat, MOH, fish, eggs and poultry or potatoes and onion, or firewood, charcoal and lime quick, or milk and butter. Contract concluding officers may decide this aspect keeping in mind economy, administration, ease of operation, strength of troops and estimated requirement for a particular station. MGASC Command will accord approval for combining of contracts based on the above facts. The principles that will form the guiding factors for combining of such contracts are listed at Appendix J. 78. Extension of Contracts. Contracts will not normally be extended beyond the period for which they have been sanctioned. However, in case where reasonable rates have not been achieved in the open tendering despite best efforts by contract concluding authorities, the existing contracts may be extended with the consent of the Contractor(s) at the same terms and conditions up to a maximum period of 3 months by the CFA who sanctioned the contract initially, and for a further period of three months by the next higher CFA, in consultation with CDA/IFA. Sanction for such extension must be obtained prior to the expiry date of the contract. 79. Recession and Termination of Contracts. The detailed provisions for recession and termination of contracts are given at Appendix K. Periodicity ASC Contracts for Fresh Supplies 80. All contracts for fresh supplies will be concluded for duration of one year only. Commencement date of contracts will be as under: -

(a) Contracts relating to Meat, Poultry, Eggs, Fish, Potatoes, Onion, Garlic, Firewood, Charcoal, Lime quick and Combined items will be finalized to commence from 01 Apr each year.

42

(b) Vegetables, Fruits, Milk, Bread and green grass/fodder will be finalized to commence from 01 Oct each year. In case of 14 and 15 Corps sectors and hill stations of all commands, the contracts should be finalized to commence from 01 Apr each year as was being done hitherto- fore.

(c) Date of commencement of contracts relating to ice, mineral water and any other perishable ASC items will be at the discretion of concerned CFA. Suggested periodicity is Oct to Sep.

43

CHAPTER VII

CONCLUSION 81. The above letter is issued notwithstanding relevant portions of the procedure laid down in Financial Regulation Part I, Regulation for the Army, ASC Regulations, ASC Training Volume II, Pamphlet „A Guide to ASC Contracts‟ and all policy letters issued on the subject mentioned in this letter. 82. This supersedes Govt of India Min of Def letter No PC/RAKSHA/68063/Q/ST-5/5089/D(QS) dt 22 Nov 2000 as amended from time to time, and all other letters of clarification issued by Integrated Headquarters of MoD (Army) not specifically mentioned in paras above. 83. This letter is issued with concurrence of Integrated Finance Division vide their I.D. No 1121/QB/2006 dated 24 Jul 2006 and will be effective from 26 Sep 2006. Yours faithfully, (SP Sharma) Under Secretary to the Government of India Copy to:- The Controller General of Defence Accounts, New Delhi - 02 copies

The Director of Audit Defence Services, New Delhi – 01 copy

The Controller of Defence Accounts - Southern, Eastern, Western, Central, Northern, South Western Command – 01 copy each

The DFA (Q) - 02 copies

QMG‟s Branch (Q/ST-5) - 150 copies

Copy signed in ink forwarded to: - The Controllers of Defence Accounts - Southern, Eastern, Western, Central, Northern, South Western Commands.

44

Appendix A (Refers to para 04 of the Govt of India letter No PC/RAKSHA/ 63060/Q/ST-5/3633/D(QS) dated 26 Sep 06)

SPECIMEN ADVERTISEMENT FOR REGISTRATION AS APPROVED

ASC CONTRACTORS 1. Applications are invited from interested suppliers for registration as ASC Contractors for annual contracts for supply of fresh articles like Mutton, Poultry, Eggs, Fish, Vegetable, Fruits, Potatoes and Onions at following stations:-

(a)

(b)

(c)

(d)

2. Annual value of contracts ranges from Rs. ____________ to Rs. _______________. Payment of bills is made on fortnightly basis and tenders are invited during JULY to SEPTEMBER and JANUARY to MARCH each year. 3. Interested parties may submit application on a plain paper to MGASC of the Command under which he wishes to take up contracts. Any additional information may be obtained from the undersigned.

MGASC, _____________Command

Mailing Address Telephone Numbers

Appendix B (Refers to para 05 of the

45

Govt of India letter No PC/RAKSHA/63060/Q/ST-5/ 3633/D(QS) dt 26 Sep 06)

PROCESS OF REGISTRATION OF ASC CONTRACTOR

1. Application by Interested Suppliers. Any person/firm may apply to any of the MGsASC Commands, on a plain paper expressing his willingness to be registered as ASC Contractor. Preliminary Process 2. On receipt of such plain paper application from interested parties, the MGsASC Commands concerned will take the following actions: -

(a) Check the name of the Contractor(s)/firm with the list of removed/banned/suspended Contractors maintained by him.

(b) In case, the applicant or any of the partners (if a firm) has been removed/banned/suspended to do business with any Government Department, he/she (or the firm) will not be considered for registration. This decision will also apply in those cases where any partner of the applicant firm may have been a partner of a firm, which has been removed/banned/suspended. In all such cases, a reply will be sent to the applicant as per Annexure 1 to this Appendix.

(c) After having done the preliminary check as above and having found the applicant fit for further processing, MGASC will forward the application of the Contractor(s) to the concerned DDST of the Corps/Area in whose jurisdiction the Contractor(s) has expressed his desire to do business. The intimation of this will also be given to the applicant.

(d) This process will be completed within 15 days of receipt of such application.

Action by DDST Area/Corps

3. On receipt of the application of the Contractor from the MGASC Command, the concerned DDST will take the following actions: -

46

(a) DDST will write to the applicant to come and meet the DDST on a specified date/time. (b) On the specified date/time, the DDST will interview the applicant as regards his antecedents. (c) DDST will also brief the applicant regarding the following:-

(i) Procedure for conclusion of contracts. (ii) Number, type and average value of contracts normally concluded under his jurisdiction.

(iii) Penalties in case of non-performance/default by the contractor.

(d) Thereafter, DDST will hand over a letter (IAFS – 1521X) as per Annexure 2 to this Appendix alongwith the application form for registration (IAFS-1521Y) as per Annexure 3 to this Appendix to the applicant. DDST will also explain the details to be provided by the applicant in the IAFS-1521Y.

(e) The above process should be completed within 45 days of the receipt of the application from the Command.

4. On receipt of the completed application (IAFS-1521Y) from the applicant, the DDST concerned will take the following actions:-

(a) Scrutinize the application in detail. In case of any

inadequacies in the application, it will be returned to the applicant within 10 days of receipt, clearly specifying the anomalies/inadequacies therein. (b) On receipt of the complete and satisfactory applications, the DDST concerned will take following action within 15 days of receipt: -

(i) Make enquiries from the appropriate Civil and Police authorities on the form attached as per Annexure 4 (revised IAFS-2119) to this Appendix, as regards to the applicant‟s character, financial status and reliability.

47

(ii) Make enquires regarding financial status of the applicant from all the bankers shown in his application, as per the letter attached as Annexure 5 to this Appendix.

(iii) Confirm genuineness of the PAN card details of the applicant from the concerned income tax authorities.

(iv) Obtain Wealth Tax return from the applicants wherever applicable. All individual propriety firms as well as registered partnership firms will be asked to produce wealth tax return in respect of all their proprietors/partners at the time of initial registration as well as re-verification.

(v) In the case of private limited/public limited companies, their latest audited final accounts alongwith annual reports will be called for and examined.

(vi) Obtain declaration from the prospective Contractor as per specimen attached as Annexure 6 to this Appendix. This declaration will be in the form of an affidavit, duly registered with the Executive Magistrate/Notary, that when ever the Contractor(s)/ firm chooses to dispose off any of their assets as declared by them in the IAFS-1521Y, prior permission for the same will be sought from the registering authority. In case of a default on these grounds, the Contractor/firm is liable to be removed from the approved list of ASC Contractors. The registered number of the Executive Magistrate/Notary, and the diary number of the affidavit will invariably be quoted/stamped on the affidavit.

(vii) All partners of the firm should sign the details of all movable/immovable property. Also original documents of all movable/immovable property declared in the IAFS-1521Y should be forwarded to the DDST alongwith a certified photocopy of the same. The MGASC will return the original documents to the applicant after completion of registration process.

(viii) DDST must confirm that the value of the immovable /movable property shown in the latest application for registration/re-verification tallies with that mentioned in the affidavit.

48

(ix) All above enquiries will be made under „CONFIDENTIAL‟ cover and all correspondence on the subject will be treated strictly confidential. In no case will the source of information be disclosed to the applicant.

(x) In case of Cooperative Societies/Unions, enquires regarding their financial status, assets and liabilities will be ascertained from the Registrar of Cooperative Society/Union, instead of civil authorities. The financial status will be ascertained from their audited balance sheet.

5. On receipt of the above details, DDST concerned will scrutinize all the details as given in the checklist attached as Annexure 7 to this Appendix, collate and forward the complete documents to MG ASC Command alongwith following recommendation: -

(a) Whether the applicant is recommended for registration or not?

(b) If not recommended, the reasons there to. (c) If recommended: -

(i) The contract carrying capacity for which the applicant

should be registered.

(ii) The items for which the applicant should be registered. Action by MGASC 6. On receipt of the documents from the DDST, MG ASC will take following action: -

(a) Scrutinize the details as submitted.

(b) Seek any additional information himself, directly from the civil authorities/banker/applicant, if required.

(c) In case he finds the applicant not fit for registration due to any reason, intimate the same to the applicant clearly specifying his objections for registration as per Annexure 1 to this Appendix.

49

(d) In case he finds the applicant fit for registration, he should call the applicant for interview on a specified date/time. During such interview, the following action be taken: -

(i) The procedure regarding conclusion and operation of contracts be explained to the applicant.

(ii) The applicant should be cautioned regarding the likely defaults in his future performance.

(iii) The applicant should be handed over the registration certificate as per Annexure 8 to this Appendix.

(iv) The date of re-verification should be reiterated to the applicant.

50

Annexure 1 to Appendix B (Refers to para 2(b) of Appendix B of the Govt of India letter No PC/RAKSHA/ 63060/Q/ST-5/3633/D(QS) dt 25 Sep 06)

Headquarters_________ Command Station ________________ No _______________ Dated _________________ To, Shri/Messers_______________ ____________________________ ____________________________

REGISTRATION AS ASC CONTRACTORS

Dear Sir(s), 1. Reference your application No _______________dated ________. 2. It is regretted that your request for registration as approved ASC Contractor cannot be acceded to due to following reasons: - (a) (b) Yours faithfully,

(MGASC)

51

Annexure 2 to Appendix B (Refers to para 3(d) of Appendix B of the Govt of India letter No PC/RAKSHA/ 63060/Q/ST-5/3633/D(QS) dt 26 Sep 06)

________________________________________________________________

IAFS – 1521X Headquarters _________ Station________________

Ref__________ Dated_________________ To, Shri/Messers__________ _______________________ _______________________

REGISTRATION AS APPROVED ASC CONTRACTORS 1. This is in reference to your letter No ____________ dated ______ addressed to MGASC ___________ Command. 2. Please find enclosed one copy of application form for registration (IAFS –1521Y) along with this letter. You are requested to complete the form in duplicate and submit the same to this office along with supporting documents as required. You/your firm will be considered for registration as ASC Contractors only on receipt of the completed application. 3. Please note that, if the application form is not accompanied with the required supporting documents/certificates as mentioned, the question of your registration will not be pursued any further. It is also for your information that all documents must be submitted in original along with one certified true copy of the same. The original copies will be returned to you by the registering authority after due scrutiny. 4. The last page of the enclosed form (IAFS-1521Y) contains a statement showing the contracts usually made in the jurisdiction

52

of __________ Command. Please denote in last column of the statement the articles in which you deal in the ordinary course of your business and for which you would like to be considered for registration. 5. On receipt of your reply, the question of your registration will be considered and the decision communicated to you in due course. Yours faithfully, DDST Area/Corps

53

Annexure 3 to Appendix B (Refers to para 3(d) of Appendix B of the Govt of India letter No PC/RAKSHA/ 63060/Q/ST-5/3633/D(QS) dt 26 Sep 06)

In lieu of IAFS – 1521Y APPLICATION FOR REGISTRATION OF CONTRACTORS FOR SUPPLY OF PERISHABLE ITEMS TO ARMY SERVICE CORPS Please Note: - Please read the attached instructions before filling the form. Incomplete Forms will not be processed. This is a Machine Readable Form. Please fill using Black Ball Pen. A list of documents required in support of the application is enclosed at the end of the form. Please ensure original/certified photocopies as applicable of all documents are submitted. Some of the original copies may be required at the time of interview for scrutiny, which will be returned to you by the registering authority. Some original documents will be held by the registering authority. Individual firms are to enter their data in Part A-1, Partnership firms to fill Part A-2, Joint Venture Companies under Private or Public Sector to enter data in Part A-3 and in the case of State/Central Co-Operatives the data is to be filled in Part A-4. Similarly, Part-B is to be filled as applicable to the type of organizations. In case of any changes subsequently in the information provided in the form, the same must be intimated to the registering authority immediately, failing which the applicant is liable to be removed from the approved list of ASC Contractors.

54

PART A-1: FOR INDIVIDUAL FIRMS 1. Name 2. Father/ Husband‟s Name 3. Date of Birth 4. Residential Address: -

City/Town

State

Pin

5. Office address: -

City/Town

State

Pin

6. Telephone Numbers (Including STD Code): -

Office

Resi

Mob

Fax

Other

7. E-Mail ID and Web Address: _______________________

D D M M Y Y Y Y

Recent

Passport Size

Photograph

55

8. PAN Card No :

9. Passport Details : Number _________________ Issued by _________________ Date of issue ______________ Valid upto ________________

10. Details of family members:-

Date: (Signature of applicant)

Ser No

Relation

Name Permanent address with PIN code

Business Details

Property Details

(a) Father

(b) Mother

(c) Spouse

(d) Son/ daughter

(e) Son/ daughter

(f) Son/ daughter

56

PART A-2: FOR PARTNERSHIP FIRMS Partner No 1 11. Name of Partner 12. Father/ Husband‟s Name 13. Date of Birth 14. Office address: -

City/Town

State

Pin

15. Residential Address: -

City/Town

State

Pin

16. Telephone Numbers (Including STD Code): -

Office

Resi

Mob

Fax

Other

17. E-Mail ID and Web Address: _______________________

D D M M Y Y Y Y

Recent

Passport Size

Photograph

of

Partner No 1

57

18. PAN Card No : 19. Passport Details : Number______________

Issued by _______________________ Date of issue ______________

Valid upto ____________ 20. Details of family members:-

Date : (Signature of Partner No 1)

Ser No

Relation

Name Permanent address with PIN code

Business Details

Property Details

(a) Father

(b) Mother

(c) Spouse

(d) Son/ daughter

(e) Son/ daughter

(f) Son/ daughter

58

Partner No 2 21. Name of Partner 22. Father/ Husband‟s Name 23. Date of Birth 24. Office address: -

City/Town

State

Pin

25. Residential Address: -

City/Town

State

Pin

26. Telephone Numbers (Including STD Code): -

Office

Resi

Mob

Fax

Other

27. E-Mail ID and Web Address: _______________________ 28. PAN Card No :

D D M M Y Y Y Y

Recent

Passport Size

Photograph of

Partner No 2

59

29. Passport Details : Number______________ Issued by _______________________

Date of issue ______________ Valid upto ____________

30. Details of family members:-

Date : (Signature of Partner No 2)

Ser No

Relation

Name Permanent address with PIN code

Business Details

Property Details

(a) Father

(b) Mother

(c) Spouse

(d) Son/ daughter

(e) Son/ daughter

(f) Son/ daughter

60

Partner No 3 31. Name of Partner 32. Father/ Husband‟s Name 33. Date of Birth 34. Office address: -

City/Town

State

Pin

35. Residential Address: -

City/Town

State

Pin

36. Telephone Numbers (Including STD Code): -

Office

Resi

Mob

Fax

Other

37. E-Mail ID and Web Address : _______________________ 38. PAN Card No :

D D M M Y Y Y Y

Recent

Passport Size

Photograph of

Partner No 3

61

39. Passport Details : Number______________ Issued by _______________________

Date of issue ______________ Valid upto ____________

40. Details of family members:-

Date : (Signature of Partner No 3)

Ser No

Relation

Name Permanent address with PIN code

Business Details

Property Details

(a) Father

(b) Mother

(c) Spouse

(d) Son/ daughter

(e) Son/ daughter

(f) Son/ daughter

62

PART B (1)

DETAILS OF FIRM: FOR INDIVIDUAL/PARTNERSHIP FIRMS 41. Name of the Firm/Company: ______________________________ 42. Registered at : ___________________________________________ 43. Registering Authority : ____________________________________ 44. Statute under which Registered : __________________________ (Indian Companies Act/Indian Partnership Act)

45. Registration No : ________________________________________ 46. Office address of the Firm/Company: -

City/Town

State

Pin

47. Telephone Numbers (Including STD Code): -

Office

Mob

Fax

Other

48. Sale Tax No ______________________________________________ 49. Central Tax No ____________________________________________ 50. VAT No _________________________________________________ Date : (Signature of Propreitor/Partner)

63

PART B (2)

DETAILS OF FIRM FOR PRIVATE/PUBLIC LIMITED

COMPANIES 51. Name of the Company: ________________________________ 52. Registered at: ___________________________________________ 53. Registering Authority: _________________________________ 54. Statute under which Registered: _______________________ (Indian Companies Act) 55. Registration No: ______________________________________ 56. Type of Industries: ______________________________________ 57. Important Clients: ______________________________________ 58. Address of Registered Office: -

City/Town

State

Pin

59. Telephone Numbers (Including STD Code): -

Office

Mob

Fax

Other

60. Ownership details: __________________________ (Equity/debt holding) 61. Number of Directors: ______________________________

64

62. Name of the Managing Director: ______________________ 63. Sale Tax No: ___________________________________________ 64. Central Tax No: _____________________________________ 65. VAT No : _________________________________________________

Date : (Signature of Managing Director)

65

PART B (3)

DETAILS OF FIRM FOR CENTRAL/STATE CO-OPERATIVE 66. Name of the Co-operative: _______________________________ 67. Registered at: __________________________________________ 68. Registering Authority: ________________________________ 69. Statute under which Registered: _______________________ (Co-Operative Societies Act) 70. Registration No: ______________________________________ 71. Type of Sector: ________________________________________ 72. Important Clients: _____________________________________ 73. Address of Registered Office: -

City/Town

State

Pin

74. Telephone Numbers (Including STD Code): -

Office

Mob

Fax

Other

75. Ownership details: _________________________________ (Equity/debt co-operative members) 76. Number of Chairman: _________________________________ 77. Name of the Managing Director: _______________________ 78. Sale Tax No: ___________________________________________

66

79. Central Tax No: ______________________________________ 80. VAT No: _________________________________________________

Date : (Signature of Managing Director)

67

PART C - BUSINESS DETAILS 81. Business Performance During Last Three Years: -

Financial Year

Type of Business

Organization Associated

With

Turnover Rs

Profit before Tax (Rs)

Profit after Tax (Rs)

82. Are you on the list of approved contractors of any

other authority? If yes specify the following: -

Yes/No

83. Are you already doing business with ASC under some

other name? If yes specify the following: -

Yes/No

Ser

No

Name of

firm

Comd Stn Articles

being supplied

Period

of contract

Value of

contract

Self/

under power of attorney

(a)

(b)

84. Were you, under this name or any other name, a

partner of any firm, which may have been removed from the list of approved Government Contractors? If yes, specify the following: -

Yes/No

Ser No

Name of firm Regd with which Comd

Regn No Date of Removal

(a)

(b)

Ser No

Name of Organization

Articles dealt with

Period of contract

Value of contract

(a)

(b)

68

85.

Have you or any of your partners ever been removed / cashiered /dismissed from Government service on disciplinary grounds ? If so, furnish details: -

Yes/No

Ser No

Name of partner

Name of Firm Organization from where removed /

dismissed/ cashiered

Date

(a)

(b)

86.

Have you ever applied for Registration with ASC under this or any other name? If yes, specify the following: -

Yes/No

Ser No

Yr of applying

Name of Firm

Command Commodities applied for

Regn No, if

allotted

Result of application

(a)

(b)

87. Have you operated any ASC contracts?

If yes, specify the details: - Yes/No

Ser No

Year Articles Command Stn(s) Contract Value

(a)

(b)

88. Articles in which the applicant usually deals and the length of applicant‟s experience in trade.

Ser No Articles Experience

(a)

(b)

(c)

(d)

69

PART D – FINANCIAL STATEMENTS 89. Bank Account Details: -

Name of Bankers

Name of Branch

Bankers Code

Account No

Name of Account Holder

Type of Account

90. Type of Financial Instruments (FDRs) Held: -

Bank In favour of

FDR No Date Value Maturity Date

91. Other Financial Instruments Equity/Debt/Loans (Sundry debtors): -

Type of instrument

Organization Present face

value

If pledged, please

indicate details

Remarks

70

92. (a) Immovable Property.

(i) Address

(ii) Location (Attach Schedules)

(iii) Owners Name

(iv) Obtained through Gift/Inherited/ Purchased/Other

(v) Registering authority

(vi) Date of Registration

(vii) Value as per Govt approved evaluator

(viii) Date of evaluation

(ix) Encumbrance Certificate

(x) Financed/Self owned

Note: (i) Schedule of Property showing the location,

valuation and encumbrance certificate in original duly registered with the Executive Magistrate/Notary in original along with two photocopies are required to be attached.

(ii) For every additional properties attached separate sheets along with supporting documents.

(b) Capital Invested in Business (excluding above details):-

(i) Type of Business _________________ (ii) Capital Invested _________________ (c) Amount Willing to Invest for ASC Contracts: -

Rs _______________

(This amount should be the total amount, the applicant wishes to invest at anyone time within a fortnight (15 days) and will form the basis for fixing the Contract Carrying Capacity)

71

DECLARATION TO BE MADE BY THE APPLICANT/FIRM

93. In Case of an Individual.

“I, _____________________________ (name of the individual), do hereby declare that the entries made in the application form are true to the best of my knowledge”.

Station : (Signature of Applicant) Dated : 94. In Case of a Firm. “We, _____________________________________________________,

(Name of partners/proprietors or share holders), do hereby declare that the entries made in this application form are true to the best of our knowledge, and also that we shall be bound by the acts of our duly constituted attorney, Mr_______________________ who has signed this application, and of any other person who in future may be appointed by us to carry on the business of the concern whether an intimation of such change is given to the ASC authorities or not”.

Station : (Signature of Applicant) Dated :

72

CERTIFICATE 95. I/We understand that, as regards the articles for which I/We are eligible to tender from the date given in the first notice calling for such tenders, my/our registration will be subject to the following conditions, with which I/We agree, and my/our names will be liable to be removed from the list of approved ASC contractors, if: -

(a) On account of my/our performance report or other failures, my/our performance is found to be poor/below acceptable level.

(b) I/We, by any unreasonable and baseless acts of commission or omission, impede, retard, delay or vitiate in any manner, the process of concluding a contract or operation of a contract.

(c) I/We do not participate in any tendering activity for two consecutive years.

(d) I/We fail to secure a contract during a period of three consecutive years.

(e) I/We obtain tender forms for a contract but do not participate in the tender.

(f) In four consecutive invitations to tenders, I/We quote obviously fictitious rates, which are twenty percent or more above the Reasonable Rates determined by the Panel of Officers assembled for conclusion of contracts.

(g) I/We no longer have the technical staff or equipment considered necessary for execution of the contracts secured by me/us.

(h) I/We violate any terms and conditions of the contract deed. (j) I/We am/are found to have made false declarations in my/our registration documents.

73

(k) I/We am/are declared bankrupt or insolvent or my/our financial position has become unsound, and in case of a limited company, it is wounded up or taken into liquidation.

96. I/We understand that the FDR pledged by me/us in favour of the MGASC as refundable fee for the purpose of registration will be forfeited to the Government in case my/our firm is removed/ suspended/banned by the Government. Also, the said FDR can also be utilized by the MGASC for recovery of any dues outstanding in favour of the Government against my/our firm, in case I/we continuously refuse to pay those dues despite intimations. Station : (Signature of Applicant) Dated :

74

CERTIFICATE In Case of an Individual. 97. I certify that I am not doing business jointly/conjointly and I am not a partner in any other firm on the approved list of ASC Contractors. If I amalgamate my business with any other Contractor or firm after registration, intimation to this effect will be given by me to the ASC officer concerned within 7 days. Station : (Signature of applicant) Dated :

or In Case of a Firm.

(a) I/We am/are partner in the firm ____________ registered with HQ _________________Command as an approved ASC Contractor for the supply of ___________________.

(b) I/We certify that I/We am/are neither working in any capacity, either paid or otherwise, for any other firm/individual on the approved list of ASC Contractors, nor I/We will take up such an assignment so long as I/We remain on the list of approved ASC Contractors.

(c) I/We clearly understand that if it should be found that I/We have given a false certificate or that I/We fail to notify the fact of my/our subsequent amalgamation with another Contractor or firm, my/our name will be removed from the list of approved Contractors, and any contract that I/We may be holding at the time is liable to be rescinded.

(d) In consideration of my/our being registered as approved ASC Contractor, I/We hereby agree that we shall not withdraw, amend or attach any condition or conditions to my/our tender(s) submitted to the military authorities before the date mentioned in the said tender(s) for

75

acceptance, and if I/We do so, Government shall be entitled to forfeit my/our earnest money deposited along with the said tenders and remove me/us from the approved list of ASC Contractors, without prejudice to any other right or remedy of Government for such breach on my/our, part.

Station :

Dated : (Signature(s) of Applicant(s)

76

LIST OF DOCUMENTS TO BE ATTACHED IN ORIGINAL ALONG WITH A CERTIFIED TRUE COPY

SerNo

Documents Attached Original Photo-copy

(a) Affidavit declaring movable/ immovable

properties as per Format attached, duly attested from Executive Magistrate/ Notary.

Yes/No

Yes/No

(b) Two copies of passport size photographs of the sole proprietor/all partners of firm, as applicable, duly attested. (These are in addition to the copies pasted on the application form).

Yes/No

Yes/No

(c) Affidavit declaring sole proprietorship of

firm in original duly attested by a notary.

Yes/No Yes/No

(d) Partnership deed duly registered with

Registrar of firms in original. Yes/No Yes/No

(e) Photocopy of PAN duly attested along with a copy of the latest IT return filed by the contractor/firm duly receipted by the concerned Income Tax Office.

Yes/No

Yes/No

(f) Copy of latest Wealth Tax return filed,

in respect of all partners, duly acknowledged by Wealth Tax authorities. If the properties are exempted from Wealth Tax, an affidavit declaring exemption to assess from sole proprietor/all partners of firm as applicable.

Yes/No

Yes/No

(g) Affidavit for three specimen signatures

of the sole proprietor/all partners of firm as applicable in original duly attested from notary along with photographs.

Yes/No

Yes/No

77

SerNo

Documents Attached Original Photo-copy

(h) Sale deed/Registration papers of

immovable properties declared by the firm/partners.

Yes/No Yes/No

(j) All FDRs and other financial documents /certificates.

Yes/No Yes/No

(k) Valuation report of immovable/movable

properties in original from Government approved valuer along with photocopy of licence issued by Government in respect of the approved valuer.

Yes/No

Yes/No

(l) Affidavit for declaring movable/

immovable properties free from all encumbrances and in possession from sole proprietor/all partners of firm duly attested from notary in original.

Yes/No

Yes/No

(m) Memorandum of Association/Articles of Association in case of a Limited Company.

Yes/No Yes/No

(n) Latest audited final accounts statement along with annual report duly audited by Chartered Account in case of Pvt Ltd/ Public Sector Undertaking Companies.

Yes/No

Yes/No

(o) Documentary evidence, if any, of

experience in any other organization/ department.

Yes/No Yes/No

(p) Balance sheet of last two years, in case of a limited Company.

Yes/No Yes/No

(q) General/special power of attorney wherever applicable.

Yes/No Yes/No

78

Total Documents: Original : ______ Nos

Photocopy : ______ Nos

---------------- Total : Nos ---------------- Station: (Signature(s) of Applicant(s)) Dated:

SerNo

Documents Attached Original Photo-copy

(r) Bank statement of last two years for all bank accounts

Yes/No Yes/No

79

LIST OF CONTRACTS USUALLY CONCLUDED IN COMMAND

Ser No

Item for supply of which the contract is concluded (all items

to be mentioned)

Station at which

delivery of service

required (all stations in

the Command to

be listed)

Months in which

tenders are

generally opened

Applicant to say YES or NO

against each item according to

whether he is or is not willing to tender for the

particular contract of any particular item

thereof

Station: (Signature(s) of Applicant(s)) Dated:

80

Annexure 4 to Appendix B (Refers to para 4(b)(i) of Appendix B of the Govt of India letter No PC/RAKSHA/63060/ Q/ST-5/3633/D(QS) dt 26 Sep 06)

________________________________________________________________ CONFIDENTIAL

Revised IAFZ – 2119 Headquarters __________ Station_________________

Ref__________ Dated_________________ To, The District Magistrate ________________________ The Police Commissioner ________________________

REGISTRATION OF FIRM/PERSON AS APPROVED ASC CONTRACTOR

Sir, 1. I have the honour to state that the under noted firm/person have/has applied for registration as „Approved Contractors‟ for the supply to the Armed Forces. I shall be glad if you will kindly state whether you consider them/him suitable for registration and, if so, the contract carrying capacity, out of the capacities detailed below, for which you recommend them/him: -

(a) Class „A‟ - Contract carrying capacity exceeding Rs 7.20 Crores.

(b) Class „B‟ - Contract carrying capacity between

Rs 2.40 Crores to 7.20 Crores. (c) Class „C‟ - Below Rs 2.40 Crores.

CONFIDENTIAL _____________________________________________________________

81

CONFIDENTIAL 2

2. It is for your information that normally contract carrying capacity is arrived at by multiplying 24 times the amount indicated by a Contractor, which he wishes to invest in ASC contracts. 3. I also request you to verify the character and antecedents of the individual/individuals and forward your report regarding his/their character and reliability.

4. A copy of documents regarding property owned by the applicant is enclosed. Please confirm the veracity of the same. 5. I further request that your reply may kindly be sent as early as possible. Yours faithfully,

(DDST Area/Corps/Indep Sub Area) Full name and address of the Firm/Person __________________________________________ __________________________________________ __________________________________________ __________________________________________

CONFIDENTIAL _______________________________________________________________

82

Annexure 5 to Appendix B (Refers to para 4(b)(ii) of Appendix B of the Govt of India letter No PC/RAKSHA/63060/ Q/ST-5/3633/D(QS) dt 26 Sep 06)

_______________________________________________________________ CONFIDENTIAL

Headquarters __________ Station_________________

Ref__________ Dated_________________ To, The Branch Manager __________________ Bank ________________________

REGISTRATION OF FIRM/PERSON AS APPROVED ASC

CONTRACTOR

Sir, 1. I have the honour to state that the under noted firm/person have/has applied for registration as „Approved Contractors‟ for the supply to the Armed Forces. I shall be glad if you will kindly state whether you consider them/him suitable for registration and, if so, the contract carrying capacity, out of the capacities detailed below, for which you recommend them/him: -

(a) Class „A‟ - Contract carrying capacity exceeding Rs 7.20 Crores.

(b) Class „B‟ - Contract carrying capacity between

Rs 2.40 Crores to 7.20 Crores. (c) Class „C‟ - Below Rs 2.40 Crores.

CONFIDENTIAL ________________________________________________________________

83

CONFIDENTIAL 2

2. It is for your information that normally contract carrying capacity is arrived at by multiplying 24 times the amount indicated by a Contractor, which he wishes to invest in ASC contracts. 3. Any information you furnish in this connection will be treated as strictly confidential and there will be no liability of your bank as regards the information so provided. 4. A copy of the bank statement of the account of the applicant in your bank, furnished by the applicant, is also enclosed. Please confirm the veracity of the statement as per your records. 5. Please quote this office reference number and date in your reply. Yours faithfully,

(DDST Area/Corps/Indep Sub Area) Full name and address of the Firm/Person __________________________________________ __________________________________________ __________________________________________ __________________________________________

CONFIDENTIAL ________________________________________________________________

84

Annexure 6 to Appendix B (Refers to para 4(b)(vi) of Appendix B of the Govt of India letter No PC/RAKSHA/63060/Q/ ST-5/3633/D(QS) dt 26 Sep 06)

SPECIMEN AFFIDAVIT TO BE SIGNED BY THE APPLICANT AS

REGARDS HIS MOVABLE/IMMOVABLE PROPERTY

AFFIDAVIT

1. I/We ……………………. Son of ………………………… aged………… resident of ………………………………………… do hereby solemnly affirm and declare that I/We own the under mentioned movable/immovable property in my/our name and that the present value of the property/asset as assessed by the civil authorities is as shown against each: -

Ser No

Name of the owners

Details of the Property

Value declared in the Wealth Tax Return

2. I/We also affirm that in the event of my/our wanting to dispose off or alienate any of the aforesaid property/assets, I/We will obtain prior permission from the MGASC …………………….. Command for the same.

Deponent(s) Note 1. The above affidavit must be duly registered with the Executive Magistrate /Notary. 2. The registered number of the Executive Magistrate/Notary, and the diary number of the affidavit will invariably be quoted/stamped on the affidavit.

85

Annexure 7 to Appendix B (Refers to para 5 of Appendix B of the Govt of India letter No PC/RAKSHA/63060/Q/ST-5/ 3633/D/ (QS) dt 26 Sep 06)

CHECK LIST FOR SCRUTINY OF THE APPLICATION FOR REGISTRATION

1. Check the form for registration (IAFS-1521Y) submitted by the applicant for the following: -

(a) The form has been submitted in duplicate. (b) All columns have been filled and no column has been left blank. Photographs as required have been provided.

(c) Correct addresses have been mentioned so as to match with the other supporting documents.

(d) Addresses and account numbers of all banks have been provided.

(e) Details of removal for any item should be mentioned including removal by any other Command stating reasons thereof.

(f) Value of movable /immovable property has been filled as per the property affidavit given by the firm.

(g) Willingness of the firm for investment in ASC

Contracts should not exceed the declared value of properties shown in affidavit.

(h) Particulars of experience have been mentioned.

86

(j) The name of the proprietor/partners has been mentioned in the first blank space and the name of the power of attorney holder in the second blank space.

(k) Yes or No has been mentioned against list of articles

for which the firm is willing to be registered.

(l) At the end of the application date and place has been mentioned.

(m) The proprietor/partners have affixed their stamps and

signed on each page. (n) The details of FDR submitted against registration fee

have been correctly mentioned.

2. Check the details of the original documents submitted by the applicant and ensure that one certified true copy of all documents is also enclosed. 3. Checks Regarding the Documents. Ensure all documents as listed in the application form (IAFS-1521Y) have been submitted. Also, check specifically for the following details: -

(a) The details of property as stated in the affidavit matches with that mentioned in the original document of property.

(b) On all affidavits submitted, the stamps of the Executive Magistrate/Notary have been clearly affixed along with their diary numbers and date. (c) The FDRs/financial certificates submitted are genuine and their validity period is for six years from the date of submitting application for registration. (d) Whether all details regarding the immovable property (house/flat) have been provided, and whether the said property has a clear title. (e) Whether all the property has been valued by the Government approved valuer.

87

(f) PAN card and latest income tax return duly acknowledged by the concerned Income Tax authority. (g) Copies of the latest wealth tax return in respect of all partners. (h) Partnership deed and its registration with the appropriate authority. (j) The general/special power of attorney if submitted must contain the photograph of the attorney holder and his specimen signatures.

4. Checks Regarding the Details Provided by the District Magistrate/Police Commissioner.

(a) Whether all details of property and other certificates have been confirmed by the authorities concerned. (b) Whether the residential and official address of sole proprietor/partners have been confirmed. (c) Whether the character of the proprietor/ partners has been clearly verified. (d) The contract carrying capacity for which the firm/individual has been recommended by the authorities.

5. Checks Regarding the Details Provided by the Bankers.

(a) Whether all the accounts as mentioned by the applicants have been confirmed by the bankers. (b) Whether all the bank statements of accounts submitted by the applicants have been confirmed by the bankers. (c) Whether all the FDRs and other financial certificates submitted by the applicants have been confirmed by the bankers.

88

(d) The contract carrying capacity for which the firm/individual has been recommended by the authorities.

6. Recommendations of the DDST. After ensuring that the application, its supporting documents, and the reports from the various authorities are complete in all respect, the concerned DDST will finally submit his personal recommendations as regards whether the firm is to be registered as an ASC Contractor, and if yes, for what contract carrying capacity. While recommending the contract carrying capacity, the DDST concerned will clearly spell out the reasons for the same.

89

Annexure 8 to Appendix B (Refers to para 6(d)(iii) of Appendix B of the Govt of India letter No PC/RAKSHA/63060/Q/ ST-5/3633/D(QS) dt 26 Sep 06)

Headquarters _________ Station________________

Ref__________ Dated_________________ To, Shri/Messers__________ _______________________ _______________________

REGISTRATION OF FIRM AS APPROVED ASC CONTRACTORS Dear Sir, 1. Reference your application number _______dated ________. 2. You are hereby informed that your firm has been registered as an approved ASC Contractor in this Command. Your registration number is _________________. 3. You will be eligible to tender for the articles enumerated below in this Command: -

________________________________________________________ ________________________________________________________

4. You will be eligible to hold ASC Contracts not exceeding Rs. _____________ (Rupees ____________________ only) at any one time for the above mentioned items. You are categorized as Class ___ Contractor.

90

5. Please note that your next re-verification should be completed before _____________. Yours faithfully, (MGASC) Copy to: - - Integrated Headquarters of MoD (Army) (ST-5) - All Command Headquarters (ST) - Headquarters Corps, Area, Sub Area, ASC Battalion under the jurisdiction of the Command registering the Contractor.

91

Appendix C (Refers to para 31 of the Govt of India letter No PC/RAKSHA/63060/Q/ST-5/ 3633/D(QS) dt 26 Sep 06)

Headquarters __________ Station_________________

Ref__________ Dated_________________ To, _______________________ _______________________ _______________________

ORDER FOR SUSPENSION/BANNING OF FIRM 1. The undersigned is directed to say that Government of India have decided to suspend/ban business dealings, in the non-statutory sphere, with the firm M/S _____________________ for a period of ________________________. 2. The particulars regarding the proprietor/partners of the firm are given below: - (a) (b) 3. The following are the allied firms of the above named firm, and the business dealing with them are also deemed to have been suspended/banned: - (a) (b) 4. The reasons for suspension/banning are given below: - (a) (b) Signature of Issuing Authority Copy to: - All concerned departments.

92

Appendix D (Refers to para 37 of the Govt of India letter No PC/RAKSHA/ 63060/Q/ST-5/3633/D(QS) dt 26 Sep 06)

SPECIMEN OF ADVERTISEMENT FOR TENDER NOTICE

MGASC COMMAND

TENDER NOTICE FOR CONCLUSION OF CONTRACTS FOR THE SUPPLY OF ITEMS SHOWN BELOW FOR THE PERIOD

FROM _____________TO________________

1. SEALED TENDERS are invited from registered Class A/B/C ASC Contractors for the supply of items given at para 2 below at different stations to be concluded by respective Executive Officers for the period from ______________ to __________. The tenders will be opened at 1200 hours on the dates as shown below: -

Ser No

Executive Officer

First Call

Second Call

Third Call

Fourth Call

Remarks

(List out all Executive Officers under jurisdiction of Command)

2. Items. (Specify all items for which the contracts have to be concluded) 3. Tender forms will be issued to only those Contractors whose name is borne on the Approved List of ASC Contractors. Further details can be obtained from the executive authorities mentioned above well in advance.

93

4. Tender forms can be obtained from the office of the respective Executive Officer upto 1200 hours one day prior to the stipulated date of opening of tender on production of Military Receivable Order/ Postal Order for Rs 100/- for each tender in favour of Controller of Defence Accounts/Area Accounts Office as per area of jurisdiction of concerned audit office. 5. In case the day of opening of tender happens to be a holiday, the tender will automatically opened on next working day. If a day prior to opening of tenders happens to be holiday, the tender will be issued on the last working day prior to that day.

6. Detailed instructions will be issued to the Contractors/Firms at the time collection of tenders. 7. Contractors/Firms, while submitting General Power of Attorney, will attach two photographs of attorney holder on the affidavit. Tender will be issued to those representative/partners of the firm only who produce the General Power of Attorney.

8. All contractors/firms are advised to report to the concerned office for collection of tender forms at least two day in advance in their own interest and adhere to given instructions.

9. The Executive Officers reserve to themselves the right of any amendment, cancellation and changes to the tender notice in whole or in part without assigning any reason.

10. Addition/deletion of any station/items will be made subject to orders of CFA. Executive Officer

94

Appendix E (Refers to para 54 of the Govt of India letter No PC/RAKSHA/ 63060/Q/ST-5/3633/D(QS) dt 26 Sep 06)

IMPOSITION OF PENALTIES ON ASC CONTRACTORS ON DEFAULT

Compensation Imposable Under Clause 9 of IAFZ – 2137A 1. Clause 9 of IAFZ-2137A (Instruction to Tenders) provides that tenderer is being permitted to tender in consideration of the stipulation on his part that after submitting his tender, he will not resile from his offer or modify the terms or conditions thereof till the date of validity of his offer. Should the tenderer fail to observe and comply with the foregoing condition, the earnest money shall be forfeited to the Government without prejudice to any other right of the Government under the contract law. This penalty draws its sanction from the fact that every contract on behalf of the Government have to comply with the provision of articles 299(1) of the Constitution, and that the tender signed by the tenderer and addressed to the President of India complies with the requirement of the Articles ibid. Now, if the invitation to tender is treated as an offer, the tender, which complies with the requirement of article 299 (1) of the Constitution and is submitted in terms of the offer would constitute a distinct subsidiary contract to keep the offer firm and open upto a particular date. This consideration which the Government proposed to take in examining the offer of the tenderer and the benefit which he might derive as a result of his offer being considered would constitute consideration for this subsidiary contract under cause 9 of IAFZ-2137A. In that view thereof the subsidiary contract would not be void for want of consideration. The subsidiary contract as per clause 9 of IAFZ-2137A, therefore, binds the tenderer to keep the offer open upto a specific date and when the tenders are opened publicly no tenderer should be in a position to withdraw or modify his offer after gaining knowledge about the position of his tender vis-à-vis other tenderers. It is with this object of binding the tenderers to their offer that an invitation to tender stipulated specifically that the tender must

95

accompany earnest money deposit which should be subject to forfeiture in case tenders are modified/revoked before the specified date of validity. 2. From the above, it follows that when a tenderer resiles from his offer or modifies his offer within the validity period and before issue of acceptance notice, i.e. acceptance of offer, forfeiture of earnest money deposited in terms of clause 9 of IAFZ-2137A would be legally sustainable. Compensation Under Clause 2 of IAFZ-2120 3. Clause 2 of IAFZ-2120 deals with lodging of security deposit after a tender has been accepted and the penalty imposable when the Contractor fails to deposit the security within the stipulated period i.e. within 20 days from the date of Acceptance Note or before the commencement of contract which ever is earlier. The clause is, therefore, applicable if the Contractor does not show intention of commencing or does not commence the contract. The aforesaid provisions enumerate to the consequences which flow from a particular type of breach i.e. failure to furnish security deposit. Though at this stage the tenderer holds the offer open after issue of Acceptance Note, he has not categorically committed himself to performance of contract unless he either deposits the security money by due date or applies for extension of time limit for depositing the security. 4. The situations which may arise prior to the commencement of the contract in which the Government would be legally entitled to compensate themselves by forfeiture of earnest money deposit under the provisions of clause 2 of IAFZ-2120 are illustrated below for guidance: -

(a) In a case when the Contractor neither deposits the security nor applies for extension nor commences the contract by due date nor resiles from his offer in writing, the earnest money deposited by him can be forfeited under the provisions of clause 2 of IAFZ-2120.

(b) Besides not depositing the security or applying for extension, when the Contractor resiles from his offer before/ after the date of commencement but after issue of

96

Acceptance of Tender Note has been mailed by the Executive Officer within the validity period, earnest money deposited by the tenderer in such cases can be forfeited in terms of clause 2 of IAFZ-2120. Therefore, in case of termination of a contract under clause 2 of IAFZ-2120, when the Contractor does not deposit security money or does not apply for extension of date of depositing, he is not liable to compensate the Government for any extra expenditure beyond earnest money, if any, incurred in making alternative supply arrangements upto the date when termination takes place.

(c) If, on the request of the Contractor, the period of

lodging the security deposit is extended by the competent authority beyond the date of commencement of the contract shown in the contract documents, and the Contractor fails to commence performance of the contract in addition to the default of non deposition of security within the stipulated period, the Contractor can, in addition, be liable to compensate the Government to the extent of extra expenditure, if any, incurred in making alternative supply arrangements upto the date when revision under clause 8 of IAFZ-2120 takes place. A notice will be given before forfeiting the earnest money.

Penalties that can be Imposed in Terms of Clause 8 of IAFZ-2120 5. Clause 8 deals with breaches after the actual commencement of contract or when a Contractor shows intentions of commencing contract. On default, the contract can be rescinded by the competent authority for the various causes mentioned therein. 6. When a tenderer resiles from his offer after the date of commencement and after Acceptance of Tender Note has been mailed by the Executive Officer within the validity period, or after depositing security, or after applying for extension of date of depositing the security, thereby implying his express consent to perform the contract, as per clause 8 of IAFZ-2120, the contract can be rescinded enforcing extra expenditure on account of risk and expense purchases. Before rescinding the contract, a „show

97

cause‟ notice will be issued so as to give him an opportunity to explain and defend his conduct. 7. When a contract is rescinded under clause 8 of IAFZ-2120, the defaulting Contractor is held liable to compensate the Government to the extent of the extra expenditure while making risk purchase, principle of mitigation of loss will be kept in mind. The amount of security deposit forfeited by the Government will be taken into account while assessing the compensation or damage to be recovered from the Contractor. If in a particular case, the extra expenditure incurred on account of risk and expense purchases made against a defaulting Contractor is less than the amount of security deposit already forfeited, no further damages can be claimed from the defaulting Contractor. If, however, the total loss suffered is more than the amount of security deposit forfeited, the Government can lawfully recover from the defaulting Contractor the difference between the actual loss suffered and the security deposit forfeited. The losses suffered have, however, to be adjudicated by a Court or arbitrator before making recoveries against security deposit/outstanding bills, in case the Contractor does not agree to the recoveries. The Government is not entitled to claim extra expenditure from the Contractor if the loss so suffered is less than the security deposit forfeited. 8. Where a Contractor neither deposits the security nor does he apply for extension but he commences the contract by due date, a free consent to perform the contract exists by his conduct. The absence of security money in the face of express consent to perform the contract will be made good by off-setting the amount from his bills for supplies made till the security deposit in terms of contract is made good and thereafter payment of bills will be made regularly. 9. These provisions are with the concurrence of Ministry of Finance (Defence) vide their UO No 2628/QB of 1978.

98

Appendix F (Refers to para 56 of the Govt of India letter No PC/RAKSHA/ 63060/Q/ST-5/3633/D(QS) dt 26 Sep 06)

INSTRUCTIONS FOR BOARD OF OFFICERS DETAILED FOR OPENING OF TENDERS

Day Prior to Opening of Tenders 1. The Board of Officers so detailed must assemble at the ST Branch of the Headquarters concluding the contracts, one day prior to date of opening of the tenders at an appropriate time. 2. The Executive Officer must carry out a detailed briefing of the Board of Officers as regards the impending task. 3. The Board of Officers must go through the SOPs/instructions on the subject, check the tender box, and familiarise themselves with the Comparative Statement of Tenders. On the Day of Opening of Tenders 5. The Board of Officers must assemble at the place identified for placing the tender box at 0900 hours on the day of opening of tenders. 6. All members of the board should be present from 0900 hours till the entire tender opening activity is completed for the day. 7. Ensure that the tender box/boxes are locked and sealed exactly at 1000 hours in front of the tenderers present and obtain signatures of some of the tenderers present as witness that the boxes which have been locked and sealed are empty. 8. Ensure that the keys of the tender box are deposited with the Executive Officer.

99

9. Ensure that a Wall Clock/Alarm Clock is placed near the tender box. 10. Ensure that a combatant guard is placed near the tender box to safeguard the same. 11. Show the tenders received by post to the tenderers present and put them in the box. The Presiding Officer of the Board will do this. 12. Ensure presence of only one representative of a party (proprietor/power of attorney holder) comes near the tender box while putting tender in the box to avoid crowding. 13. Take assistance from CMP to control other tenderers and individuals. 14. Do not accept any tenders directly from tenderers. 15. Watch the time carefully and announce the last five minutes. 16. Stop putting of tenders in the tender box by the tenderers exactly at 1200 h and immediately remove the tender box from the site to ensure no tenders are put in the box after 1200 h. 17. Open the tender boxes after collecting the keys from the Executive Officer. 18. Ensure that no tenders are left in the tender box after opening the same. The empty tender box will be shown to at least two to three tenderers present and their signatures obtained on the certificate prepared for the purpose. 19. Separate out tenders for each station. 20. Number each tender and put date. 21. All members of the Board must sign and put date on all pages of tender documents at the place where elongated stamp is affixed i.e. at the top of each page.

100

22. Ensure that the tender form is correctly filled; each page of the tender form must be affixed with the firm‟s stamp and signed by the tenderers/sole proprietor/power of attorney holders of the firm. 23. Check that the details of Tender Fee and Earnest Money are recorded on first page of tender from. 24. Read out the tendered rates in the presence of only those tenderers who have quoted for that particular item/station. 25. Ensure rate quoted by the tenderer in the schedule of tender form are both in figures and words. In case of any variation of rates in figures and words, the rates quoted in words will be deemed to have been tendered. 24. Insist on Contractors to note down the rates. 25. Note down and fill up the rates simultaneously in the Comparative Statement of Tenderers (CST). 26. Completed CST to be signed by all members of the Board and submitted to the Executive Officer by hand.

101

Appendix G (Refers to para 62 of the Govt of India letter No PC/RAKSHA/ 63060/Q/ST-5/ 3633/D(QS) dt 26 Sep 06)

INSTRUCTIONS FOR PROCEDURE TO BE FOLLOWED BY THE

PANEL OF OFFICERS

Prior to Assembly 1. The Executive Officer will collate various input required for formulation of reasonable rates, and forward the same to all other members of the Panel at least two days prior to the date of assembly of the Panel. This would enable each member of the Panel to contribute meaningfully in the formulation of reasonable rates. After Assembly 2. The Panel of Officers will assemble on the day of opening of tenders at 0930 hours. They will thereafter proceed to formulate the reasonable rates for each item/station at the same time while the tenders are being submitted. This will negate any chance of inadvertent leakage of the reasonable rates. Attention of the Panel is invited to paragraph 55 to 59 of this letter. 3. The Panel will deliberate on fixing a reasonable rate for each item and each station separately. The worksheet for the fixing the reasonable rate for each station/item will be prepared. 4. In case the Panel unanimously arrives at the reasonable rate for a particular item/station, the same will then be signed by all the members of the Panel and sealed in an envelope alongwith its worksheet. 5. In case of a dispute among the Panel members regarding the reasonable rate, the dissenting member will record his note on the worksheet along with reasons for his difference of opinion. This will then be sealed in the cover along with the worksheet.

102

The final decision for sanctioning/retendering the contract will be taken by the Competent Financial Authority. However, under no circumstances will the reasonable rates be put up to the Competent Financial Authority seeking a decision on the difference of opinion among the Panel members. 6. The Panel will continue its deliberations till such time the reasonable rates for all stations/items for which tendering is taking place on that day are formulated. Necessary administrative arrangements for the Panel members will be made by the Executive Officer. 7. The Panel will receive the Comparative Statement of Tenders (CST) from the Board of Officers detailed for opening of tenders, and check if the lowest tender(s) has/have been identified and announced by the Board of Officers. 8. The Panel will then take each item and compare the lowest tendered rates with the reasonable rates fixed by them, and workout the monetary and percentage differential between the two. 9. Tendered rates more than 20 % below the reasonable rates will be declared fictitious and action taken as enumerated at paragraph 19 (c)(vi) of this letter. In such cases, the tenderer who has quoted the lowest rates within 20% of the reasonable rates will be considered the L-1. 10. Negotiations will then be carried out by the Panel with the lowest tenderer (L-1) in each item as follows: -

(a) Negotiations will be carried out with L-1 only in terms of the CVC guidelines on the subject.

(b) No negotiations will be carried out with the L-1 whose tendered rates are below the reasonable rates, and the rates quoted by them will be recommended for acceptance as such. (c) Negotiations will be carried out with L-1 only once by giving him an invitation offer to quote revised rates in writing. The rates quoted by the Contractor in the invitation

103

offer will be signed and stamped by him. The Panel will countersign this invitation offer. (d) In case the lowest tenderer does not wish to revise his earlier offered rates, he will record the same on the invitation offer and sign it. (e) In cases where two Contractors tender identical lowest rates, procedure outlined at paragraph 71 of this letter will be followed. (f) Negotiations will be completed within a reasonable time frame, considering factors like expediency and availability of the members of the Panel and L-1 Contractors.

11. The negotiated rates so obtained will then be entered in the Comparative Statement of Tenders, which will then be signed by the Panel of Officers. 12. The Panel will then record the transactions of the entire process exhaustively in the form of panel proceedings, and sign the proceedings for reference by the Competent Financial Authority and the audit. 13. The reasonable rates along with their worksheets will then be sealed and attached to the panel proceedings, to be opened only by the Competent Financial Authority, should he choose to peruse it.

104

Appendix H (Refers to para 63 of the Govt of India letter No PC/RAKSHA/ 63060/Q/ST-5/3633/D(QS) dt 26 Sep 06)

INPUTS TO BE USED FOR DETERMINATION OF REASONABLE RATES

1. Whole/part/relevant portion of the following inputs will be taken for determining Reasonable Rates by the Panel of Officers: -

(a) Whole Sale Price Index.

(b) Statistical rates.

(c) Average local market rates. (d) Pattern of rates sanctioned during the previous years. (e) All India Average Weighted Rates.

(f) Availability of the commodity in different mandies (markets), location of such mandies, rates of commodity prevalent in these mandies and the distance to the nearest military station for which the contract is being concluded.

(g) Average contract rates of the commodity in different Commands during previous three years.

(h) The performance of Contractors and the failures that had taken place in the last one year.

(j) Risk and Expense purchase carried out in the last one year.

(k) Climatic conditions prevailing over the last one year. (l) Taxation pattern of various states. (m) Civil consumption of various stations.

105

(n) Local purchase rates of stations where contracts were not concluded.

(o) Rates obtained by other service, viz Navy.

(p) Rates achieved in the neighbouring depots in the same geographical area irrespective of the Comd. (q) Average of Retail Rates, published by the Ministry of Agriculture, for last 12 months, reduced by a predetermined depression factor of not less than 20% for converting retail rates into wholesale rates. (r) Export demand of the item. (s) Natural calamities/disease affecting production. (t) Statutory levies imposed by the Government.

(u) Increase/decrease in rates of labour and products.

2. The list is by no means exhaustive. Any additional input that will help in determining the reasonable rates may be used.

106

Appendix J (Refers to para 77 of the Govt of India letter No PC/RAKSHA/ 63060/Q/ST-5/ 3633/D(QS) dt 26 Sep 06)

PRINCIPLES FOR COMBINING/SPLITTING OF THE CONTRACTS

1. The splitting/combining the contracts for perishable items will be done based on the feeding strength for which the said contract is to be concluded. The guidelines for the same are enumerated in succeeding paragraphs. 2. For Feeding Strength upto 300 Personnel. The contract should be concluded for all items combined in one contract, so that most economical rates are obtained for carriage of viable vehicle loads. 3. For Feeding Strength Between 300 to 2000 Personnel. The following combination of contracts could be adopted depending on the availability of Contractors and economic viability: -

(a) Vegetables/Fruit/Potato/Onion/Garlic. (b) Firewood/Charcoal/Limequick and Ice(MM).

(c) Meat dsd/Fowls dsd/MOH/Fowls alive/Fish/Eggs.

4. For Feeding Strength Between 2000 to 4000 Personnel. The following combination of contracts could be adopted depending on the availability of Contractors and economic viability: -

(a) Vegetables/Fruit Fresh (b) Potato/Onion/Garlic. (c) Firewood/Charcoal/Limequick and Ice(MM).

107

(d) Meat dsd/MOH.

(e) Fowls dsd/Fowls alive/Fish/Eggs.

5. For Feeding Strength Beyond 4000 Personnel. As far as possible, single item contract should be concluded for such strength. However, the contracts for following items could be combined: -

(a) Potato/Onion/Garlic. (b) Firewood/Charcoal/Limequick.

6. Contracts for Stations with Large Clusters of Military Stations/ Establishments/Field Formations. With a view to reduce the total value of each contract and encourage greater competition, the following measures may be adopted: -

(a) Separate contracts for small stations in the dependency of a Supply Depot should be concluded, rather than a single contract at the main Supply Depot with delivery clauses for several other locations, which have the effect of escalating the value of contracts. (b) Construction of new butcheries, or converting suitable buildings into butcheries, and splitting main contracts for meat group items into two or three contracts. (c) Concluding separate contracts for formations so as to make them responsible for feeding their own units.

108

Appendix K (Refers to para 79 of the Govt of India letter No PC/RAKSHA/ 63060/Q/ST-5/ 3633/D(QS) dt 26 Sep 06)

RESCISSION AND TERMINATION OF CONTRACTS

Termination of Contracts 1. Termination, in relation to contracts, implies foreclosure of the contract agreement before the end of the period of its validity. For example, a contract sanctioned for a period of one year may be terminated before the end of one year, if the situation so warrants. The contract could be terminated in case the item/services contracted are no longer required owing to certain unforeseen circumstances arising due to changes in the operational situation, under the provisions of clauses 18 and 19 of IAFZ – 2120 (Tender Form). The officer who had sanctioned the contract can terminate the contract after giving due notice to the Contractor. Termination carries no compensation, and neither party has any obligation/liability towards each other with effect from the date of termination. However, all liabilities due to either party as regards the contract for the period upto the date of the termination will be settled by both the parties as per the terms and conditions of the contract deed. Rescission of Contracts 2. Rescission of contract amounts to foreclosure of the contract agreement before the end of the period of its validity due to default on part of the Contractor, or inability on part of the Contractor to execute the contract as per the terms and conditions of the contract deed. In case of rescission, the Contractor is liable to reimburse to the Government any additional expense the Government incurs on procurement of the contracted item, either by way of local purchase or by conclusion of fresh contract, for the entire period of the initial contract. The circumstances under which a contract can be rescinded are enumerated as per clause 8 of IAFZ – 2120 (Tender Form). In addition, the contract can also be rescinded if: -

109

(a) The Contractor fails to deposit security deposit within 20 days of the issue of the Acceptance of Tender Note or before the commencement of the contract, whichever is earlier, or upto any extended period sanctioned by the Competent Financial Authority. (b) Any breach on part of the Contractor, which would make him liable to be removed from the approved list of ASC Contractors, as enumerated at paragraph 19 (c) of this letter.