Development of Vendor Manual for Madhya Pradesh Urja Vikas Nigam Limited

(MPUVNL)

Partnership to Advance Clean Energy-Deployment (PACE-D)

Technical Assistance Program

December 1, 2015

Background

MPUVNL is the State Nodal Agency which manages the off-grid and grid connected renewable energy projects that are part of MNRE Schemes

After sales support and operation & maintenance during operation phase of Solar Photovoltaic (SPV) is a major challenge & limitation.

This limitation has resulted in loss of consumer faith in Solar PV programs across the state.

It is envisioned that introducing a robust and comprehensive vendor policy/guidebook will help limit above mentioned barriers.

Vendor Manual for MPUVNL: Objective

Objective of vendor manual

To increase participation from

Vendors

To reduce Processing and short listing of

vendor application

To involve credible vendors

To incentivize efficient

performance

To penalize inefficient work

To ensure optimum and

effective use of the subsidies

To prepare an effective vendor manual, an efficient approach needed to be developed covering best practices involved across the selected States

Comparative analysis of best practices in selected states: (Andhra Pradesh, Chhattisgarh, Maharashtra, Rajasthan and Tamil. To understand and streamline administrative procedures, To reduce the response time. The study has been carried out focusing on development of vendor manual for MPUVNL

Mapping of key learning's from the empanelment processes: The Program assessed the key learning's from the empanelment process, tendering, and after-sales and support covering broad and standard parameters to fit for MPUVNL

Vendor consultation: Consulted with select vendors and key personnel who develop the framework for grading and empanelment of channel partners/system integrators

Preparation of standard vendor manual: The manual focuses on three different aspects of vendor processes:• Empanelment management process.• Tender management process.• After-sales service and support management process.

Vendor Manual for MPUVNL: Approach

Comparative Analysis: Best Practice from selected states and agencies

Empanelment process

Chhattisgarh, Tamil Nadu, Andhra Pradesh

MNRE Channel partners

Rating agencies

Tendering process

Chhattisgarh, Maharashtra, Rajasthan,

Madhya Pradesh

Madhya Pradesh New and Renewable Energy Department

After sales service

Chhattisgarh, Maharashtra,

Rajasthan, Madhya Pradesh

Madhya Pradesh New and Renewable Energy Department

Broad parameters used for evaluation

Empanelment process

Eligible entity

Eligibility criteriaRegistration fees and

validityRenewal fees

Security deposit/EMDCancellation of empanelment

Application invitation

Local office requirement

Verification

Tendering process

Eligible entity

Eligibility criteria

Earnest money deposit

Security deposit

Guarantee generation

Penalty for default in guarantee generation

Terms of payment

After sales service

Project completion time

Tenure for O&M support

Scope of Operation and maintenance

Establishment for after sales service centre

Penal Measures for not attending complaints

Outcome of Comparative Study for Empanelment Process

• MPUVNL may adopt Chhattisgarh model for empanelment which is efficient and streamlines (Chhattisgarh have 73 empanelled System Integrators and 3-4 RESCOs) (as of July 2015).

Empanelment model

• MPUVNL may keep high registration fees for empanelment in order to evaluate the financial capability and payment capability of the vendor which acts as a filter allowing only serious players.

Registration fees

• MPUVNL should encourage participation of new vendors. New vendors can become empanelled vendors after availing training from MNRE or other recognised institute for installation supply, commissioning.

Entry for new vendor

• MPUVNL may introduce target based renewal of empanelment under which renewal of empanelment is done only after vendor has achieved specified targets for that FY.

Renewal of empanelment

Chhattisgarh is a successful model for the process of empanelment. States may adopt the empanelment model of Chhattisgarh for their state level empanelment process

Outcome of Comparative Study for Tendering Process

• MPUVNL has a streamlined tendering process

Tendering Process

MPUVNL has a streamlined tendering process, and must continuously update and improve the process

Outcome of Comparative Study for After-sales Service Process

• MPUVNL should provide online verification portal for quarterly reporting; where vendor can upload necessary document and book a slot for inspection.

Online verification

portal

• MPUVNL must specify the time frame for project completion and other specification regarding the same.

Project Completion time

• MPUVNL must define the detailed roles and responsibility for the maintenance of the system after 5 years of after sales service especially cost bearing responsibility, and maintenance responsibility.

After completion of 5 Years

• MPUVNL should define the responsibility and cost bearing in the situation of Force Majeure.Force Majeure

MPUVNL should improve/update its after sales service to be more efficient and to provide long term service

Key components for development of internal process under vendor manual

Empanelment Process Tendering Process After-sales

Service

Empanelment Management Process

• Need, applicability and scope of empanelment process • Constitution of internal committee for initiation of empanelment process• Setting timelines, roles and responsibilities of committee• Setting norms, fees and charges for empanelment

Empanelment Initiation

• Preparation of empanelment application form• Setting responsibilities and timelines for application issuance process• Uploading and Media reach of application• Defining application fees• Terms and conditions for acceptance and rejection of application

Empanelment Application

Management Process

• Constitution of internal committee for evaluation of application• Setting roles and responsibilities of committee• Responsibility for checking parameters for evaluation (General, Technical and Financial eligibility

condition, Prior experience etc.)• Defining responsibility and timelines for prequalification check

Evaluation of Application for Empanelment

• Constitution of internal committee for approval of empanelment• Roles and responsibilities of committee• Contents and format of certificates for approval/registration• Responsibility and timelines for preparation and Issuance certificate for approval/registration• Validity of certificate

Approval and Sanction of

Empanelment

• Preparation of vendor master• Right to reject from empanelment• Right to extend timelines• Other conditions

Empanelled Vendor

Management

Tender Management Process

• Setting of Eligibility Conditions• Constitution of internal tendering committee• Setting Roles and responsibilities of committee• Timelines for identifying project and issuance and opening of tender

Tender Initiation

• Preparation of tender document• Responsibility, timelines for issuance of tender document constituting duration and validity of tender• Uploading of tender document• Defining applicable fees and charges• Responsibility and timelines for management of Pre-bid meeting

Tender Management

Process

• Acceptation and rejection of tender• Right to extend timelines• Contract conditions

Opening of Tender

• Constitution of internal committee for evaluation of tendering process• Parameters and responsibilities for evaluation of tender• Earnest Money Deposit, Security deposit, Penalty provisions• Setting responsibilities to keep a check on Terms of payment and make payment accordingly• Setting Enforcement condition

Evaluation of Tender

• Constitution of committee for approval and sanction of project• Setting project timelines• Contract award and negotiation process

Tender Award and Award

Management

After-sales and Service Support Management

• Constitution of internal committee for after sales service• Setting roles and responsibilities of committee• Setting responsibilities of District Renewable Energy Officer

After-sales Service

• Setting responsibilities and timelines for monitoring of the project• Setting parameters for monitoring and verification• Setting responsibility and timelines for checking facilities at local service centers of vendors• Setting responsibility and timelines for checking preventive/routine maintenance• Conditions for breakdown/corrective maintenance of installation/project• Setting penalty provisions• Force measure conditions

Monitoring and

Verification

• Setting roles and responsibilities after finishing of 5 years Comprehensive Maintenance Contract (CMC)

• Right to extend timelines• Other conditions

Responsibility After 5 Years

CMC

Conclusion

• The vendor manual, developed by the PACE-D TA Program, will help MPUVNL to:– Streamline the vendor management process.– Establish the required empanelment framework including guidelines to

carry out the process empanelment, and vendor management.– Develop effective tendering process and after-sales service process.– Develop a stringent compliance and monitoring framework which will

evaluate the service provided by the vendors from time to time and penalties provisions for the defaulter.

– Develop a strong supply chain.

The Model Vendor Manual, with standardised process for empanelment, selection, tender and after-sales support, will benefit MPUNVL and other SNAs as they too can

refer to the manual for streamlining their process of vendor selection and management.

Thank You

Anurag MishraSenior Clean Energy SpecialistUSAID/IndiaEmail: amishra@usaid.gov

Nithyanandam Yuvaraj Dinesh BabuChief of PartyPACE-D TA ProgramEmail: ydbabu@nexant.com