Procurement Manual 19-09-2009 Final CD

7/25/2019 Procurement Manual 19-09-2009 Final CD

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Andhra Pradesh Rural Water Supply and Sanitation Project Procurement Manual

PROCUREMENT MANUAL

FOR

Andhra Pradesh Rural Water Supply and Sanitation(APRWSS) Project

Rural Water Supply and Sanitation DepartmentGovt. of Andhra Pradesh

Hyderabad

August, 2009


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CONTENT

Acronym 4Definition 6

Chapter- I: Introduction 71.1 General1.2 Project Objectives1.3 Objective of the Procurement Manual1.4 Scope of the Procurement Manual1.5 Use of Procurement Manual1.6 Modifications to the Procurement Manual1.7 Reference to the World Bank/IDA

Chapter II: Procurement Policy, Plans and Strategy 102.1 Role of Procurement

2.2 Project Implementation Strategy2.3 Project Implementation Arrangements2.4 Procurement Plan2.5 Procurement under APRWSS Project2.6 Goods2.7 Consultancies2.8 Procurement Review and Audit2.9 Misprocurement2.10 Fraud and Corruption2.11 Delegation of Authority2.12 Delegation of financial powers2.13 Threshold Values2.14 Performance indicators

Chapter-III: Process Description of Methods of Procurement of Goods and Works 213.1 Procurement Process3.2 Procurement Schedule3.3 Methods of Procurement3.4 Bidding Document3.5 Sale, receipt and Opening3.6 Prebid Conference

3.7 Price Adjustment3.8 Evaluation of Bids3.9 Rejection of Bids3.10 Single Bids3.11 Other factors in Bidding process3.12 Sub Contracting in Civil work3.13 Award of Contract3.14 Resolution of Disputes3.15 Laws Governing the Contract3.16 Adjudicator3.17 Arbitration

3.18 Extension of Contract3.19 Bill of Quantity


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3.20 Complaint Redressal Mechanism3.21 Consultation with and Information to the Bank

Chapter- IV: Selection of Consultancy Services 404.1 General

4.2 Contract Types for Procurement of Consultancy Services4.3 Procurement of Support Organizations4.4 Steps for Hiring of Consultants4.5 Scope of Work4.6 Evaluation Committee4.7 Evaluation4.8 Regarding Negotiations4.9 Rejection of All Proposals4.10 Type of Contracts and Selection of Appropriate Contract Form4.11 Selection of Appropriate Contract Form4.12 Role of Bank in Evaluation Process

4.13 Misprocurement

Chapter- V: Community Procurement (Principles and Process Description) 575.1 Concept5.2 Benefits of Community Procurement5.3 Key Rules of Community Procurement5.4 Procurement of Works by Community5.5 Social Audit

Chapter- VI: Review by Bank 596.1 General: Prior and Post Review6.2 Procurement of Goods and Civil Works6.3 Procurement of Consultancy


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EnclosuresEnclosure 1 : Format of Invitation of Bids (IFB) National Competitive BiddingEnclosure 2 : Format for seeking banks clearance for Rejection of bids and re-

invitation for Civil works / goodsEnclosure 3 : Suggested Format for Bid Evaluation Report for Civil Works (NCB)Enclosure 4 : Suggested Format for Bid Evaluation Reports for Goods and Equipment

(NCB)Enclosure 5 : Procurement Check List for Contracts Above Prior Review Threshold

for Civil WorksEnclosure 6 : Procurement Check List for Contracts Above Prior Review Threshold

for Goods and EquipmentEnclosure 7 : Procurement Check List for Post-Award Review of Contracts for Civil

WorksEnclosure 8 : Procurement Check List for Post-Award Review of Contracts

for Goods and EquipmentsEnclosure 9 : Format for seeking Banks clearance for increase in Contract Value

beyond 15% of the Original Contract Value as well as for granting extension of theStipulated Time for performance of the Contract.

Enclosure 10 : Form I-A (Progress Report on Field Review Contracts)

Enclosure 11 : Suggested Draft of the Letter of Appointment of Adjudicator inCivil works Contract

Enclosure 12 : Minutes of Bid Opening (NCB Goods/ Works)Enclosure 13 : Format for Request for Expression of InterestEnclosure 14 : Format for justification of sole source consultancy

Enclosure : 15 : E-5

Enclosure : 16 : W-5

Enclosure : 17 : W-6

Enclsoure : 18 : W-9

Annexure 3Annex.P-I/1 : List of works to be Procured

Annex.P-I/2 : List of Goods/ Equipment/ Vehicles/ Furniture to be procuredAnnex.P-I/3 : List of Consultancy Services to be hiredAnnex.P-I/4 : Estimate of Bid PackagesAnnex.P-I/5 : Procurement Plan for Works/ GoodsAnnex.P-I/6 : Procurement Plan for Consultants


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Acronymns

A.E - Assistant EngineerA.E.E - Assistant Executive EngineerA.P - Andhra PradeshAPRWSSP - Andhra Pradesh Rural Water Supply and Sanitation ProjectBPL - Below Poverty LineCCDU - Communication and Capacity Development UnitC.E - Chief EngineerCP - Commercial PracticeCQ - Consultant QualificationD.E.E - Deputy Executive EngineerDPSU - District Project Support UnitDWSC - District Water and Sanitation CommitteeDWSM - District Water and Sanitation MissionE.E - Executive Engineer

EOI - Expression of InterestE-in-C - Engineer-in-ChiefFBS - Fixed Budget SelectionFC - Fully CoveredFMM - Finance Management ManualGOAP - Government of Andhra PradeshG.O.I - Government of IndiaG.P - Gram PanchayatGPWSC - Gram Panchayat Water and Sanitation CommitteeICB - International Competitive BiddingIC - Individual Consultant

IEC - Information, Education and CommunicationISL - Individual Sanitary LatrineLCS - Least Cost SelectionM & E - Monitoring and Evaluation.MIS - Management Information System.MOU - Memorandum of Understanding.MVS - Multi Village SchemeMVS-WSC - Multi Village Scheme Water Supply Committee

NC - Not CoveredNCB - National Competitive BiddingNGO - Non-Government Organization

NSS - No Safe SourceO & M - Operation and MaintenanceOHSR - Over Head Storage ReservoirPAO - Pay and Accounts OfficerPC - Partially CoveredPIP - Project Implementation PlanPRI - Panchayat Raj InstitutionPSU - Project Support UnitQBS - Quality Based SelectionQCBS - Quality and Cost Based SelectionRFP - Request for ProposalRWSSD - Rural Water Supply and Sanitation DepartmentS.E - Superintending Engineer


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SHG - Self Help GroupsSO - Support OrganizationSSS - Single Source SelectionSVS - Single Village SchemeSWSM - State Water and Sanitation Mission

TOR - Terms of ReferenceUGD - Underground DrainageUNDB - United Nations Development BusinessW.B - World BankZ.P. - Zilla Parishad


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Definitions

RWSSD The RWSSD, under the Department Secretary, has the overall responsibility forimplementing the Project, including budget allocation, program and policies.

PSU Project Support Unit- The PSU will function as the secretariat to the SWSM and willbe assisted by the district units (D-PSUs) for implementing the World Bank Project in sixdistricts.

DWSM District Water and Sanitation Mission The DWSM will be responsible for theoverall district program and policies, including annual plan and budget, and periodic review ofthe targets and achievements.

DPSU - The D-PSU, headed by the Program Director with inter-disciplinary officials(technical, environmental, social, financial), will be responsible for the day-to-day operationsregarding the World Bank Project.

DWSC District Water and Sanitation Committee The DWSC, as the executive arm of theDWSM will carry out the district activities, including design and implementation of schemesand sanitation programs through RWSSD Divisions.

GPWSC Gram Panchayat Water and Sanitation Committee The GP-WSC, a sub-committeeof the Gram Panchayat, will work with the DWSC for designing and implementing the SVSand intra village facilities of MVS.

MVSWSC Multi Village Scheme Water Supply and Sanitation Committee will endorse and

sign off the scheme design and the implementation stage payments for MVS and responsiblefor O&M.

TSP Technical Service Provider can be hired by the DWSC from the market in case theRWSSD engineers are not available or do not have capacity under a service contractagreement.


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Chapter- IIntroduction

1.1General

Andhra Pradesh (AP) is the fifth largest state in the country with over 76 million population(census 2001) and spread across 277,000 sq. km. About 552 lakhs constituting 73% of its

population live in rural areas. The state has three major rivers Godavari, Krishna and Pennar and also significant amount of ground water.

Andhra Pradesh has three regions namely Coastal Andhra, Telangana, and Rayalaseema. It isdivided into 23 districts (22 rural and one urban), comprising of 1125 Mandals, 21,893 GramPanchayats, with 72,072 habitations, about 46% are Fully Covered and 9% are either NotCovered or are having No Safe Source.

Overall vision of GoAP for RWSS sector is to improve the quality of life of rural population inthe state by establishing sustainable and affordable access to adequate and safe water supplyfor all citizens with effective sanitation facilities. The major objectives under the sector are:

a. Rural water supplyThe vision is to make all rural habitations Fully Covered (FC) by

supplying of 40 litres per capita per day (LPCD) of safe drinking water;

improving existing water sources and distribution facilities to avoid slippage ofFC habitations to PC status;

enhancing sustainability (technical, financial and environmental) of watersupply services;

safeguarding water quality and securing reliable safe sources for habitationswith water quality problems.

b. SanitationThe objective of supplying safe water would not be achieved unless the sanitary aspectsof water supply, as well as the issue of sanitation are addressed simultaneously. TheVision is to provide sanitation in all Households, Schools and Anganwadis. The targetof providing 100% sanitation has to be supported by a concerted effort of spreadingawareness about the importance of sanitation, through Information, Education andCommunication (IEC) campaigns.

The Govt. of Andhra Pradesh has planned to accomplish the above objectives by implementing

AP Rural Water Supply & Sanitation Project with World Bank assistance.

1.2 Project Objectives

The project development objective is to assist the GoAP in increasing access of ruralcommunities to reliable, sustainable and affordable WSS services. The components of the

project are:

Component (a) Sector development comprising capacity building, IEC, sector developmentstudies and District Excellence AwardsComponent (b) Infrastructure development comprising new projects (SVS & MVS) in

water supply, rehabilitation and augmentation of existing schemes that would include


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recharging ground water sources, building of household and environmental sanitationinfrastructure and activities to promote hygiene.Component (c) Project Implementation Support- comprising Project Support Unit (PSU) atthe state level, supported by District-PSUs (D-PSUs) (this component will also have outlaysfor M&E, engineering support and consultancy).

1.3 Objective of the Procurement Manual

The Procurement Manual has been prepared setting forth the procedures and guidelines forprocurement of goods, works and consultancy services by the project authorities so as to followone common set of procedures by establishing transparency. These procedures will beapplicable for the procurement of works, goods and services funded under World Bankfinance.

1.4 Scope of the Procurement ManualProcurement Manual is based on the World Bank Guidelines for procurement of goods, works

and consultancy services and is applicable to the stakeholders involved in the implementationof the project.

The Manual includes, drafts for Invitation of Bids; briefs of Contract data, details pertaining topre-bid conference; procurement process, evaluation of bids for works & goods, award ofcontracts and requirements of consultation with Bank at appropriate stages. For community

procurement, formats to be followed at various stages with resolutions are given in the manual.

Checks and Controls required to maintain transparency in the procurement process of goods,works and services are given in the manual. The existing clauses for exercising in-built checksand controls will be provided by fixing threshold value of tenders at different levels by

constitution of committees and delegation of financial powers at various levels. AppropriateStandard Bidding Documents of Bank (as agreed by the GOI Task force with the World Bankand as amended from time to time) are followed for procurement of goods, works and servicesfor individual projects as per approved Procurement Plan and in case of changes if any priorclearance of Bank is required to be obtained. The Financial Rules/ Code of the Department,PWD Code, Manual of Orders and Accounts Code relating to procurement of goods, worksand services have been kept in view while preparing this Manual to the extent they areconsistent with the Bank guidelines.

1.5 Use of Procurement Manual: The procurement of goods, works and services will followBank procurement guidelines. The processes and procedures have been detailed in thisProcurement Manual for the Project. A Procurement Cell will be set up at the PSU andimplementing agencies capacities will be built to ensure that consistent and correct methods of

procurement, as specified in this manual are followed.

In case of any ambiguity between this manual and the Bank Procurement Guidelines-Procurement under IBRD Loans and IDA Credits (May 2004) revised October 2006 for Worksand Goods and Selection and Employment of Consultants by World Bank Borrower, (May2004) revised October 2006, the Bank Guidelineshall prevail for all procurement under the

project.


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1.6Modifications to the Procurement Manual

The Manual shall be a reference tool for the project implementation by the stakeholders,project authorities, related agencies, Contractors and Suppliers for procurement of goods,

works and services. The guidelines and procedures for procurement of goods, works andservices are however, subject to modification with the approval of World Bank and Govt. ofAndhra Pradesh in case of any peculiar circumstances and where situation so warrants.

1.7 Reference to the World Bank/IDA

The terms World Bank or Bank used in the manual refer to The International Bank forReconstruction and Development (IBRD) which shall also include InternationalDevelopment Association (IDA) and where any clearance or approval requirements or otherreferences have been made, the same would imply to the IDA as well.


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Chapter IIProcurement Policy, Plans and Strategy

2.1 Role of Procurement

The aim of procurement is to obtain right quality of works, goods and services at reasonableand competitive prices, giving equal opportunities to all individuals, companies, firms,manufacturers, contractors, who are capable of delivering the goods, works and services to thelaid down specifications, standards and provisions of bid documents. Procurement policy isalso to provide incentive and encouragement for development of national manufacturers,contractors, firms, institutions and consultancy firms etc. The procurement policy is based onthe below noted principles:

Economy and efficiency in the implementation of project.

Economy and efficiency in the procurement of goods, works and services

involved. Equal opportunity to all eligible bidders in providing goods and works by

providing timely and adequate notification of bid documents.

To encourage development of domestic contracting and manufacture industriesand consulting firms.

Importance of transparency in the procurement process.

2.2Project Implementation Strategy

The Rural Water Supply and Sanitation Department having been entrusted with theresponsibility of supplying safe and sufficient drinking water to the rural population has so far

fully covered 33,208 habitations and partially 31,653 habitations. There are 6273 habitationswhich are not covered including PC1 and 938 no safe source habitations as on 1-4-2008. Thegovernment of AP now plans to introduce demand responsive approach with respect to ruralwater supply and sanitation in partnership with community for achieving sustainability througheffective O & M by the community facilitated by the Department. The project is planned tocover 6 districts.

The procurement procedure and fiduciary requirement shall be met in accordance with thisProcurement Manual prepared based on Bank Procurement Guidelines for goods, works andconsultancies.

2.3 Project Implementation Arrangements

All SVS, MVS and all other civil works will be procured and implemented by the DWSC. TheDWSC will be responsible for packaging the GP schemes (as necessary) and taking all

procurement decisions. The procurement by the DWSC will be conducted in accordance withthe threshold and method of Procurement agreed with the Bank.

DWSC will procure the complete SVS/ MVS scheme including works related to bore well (orsurface source as applicable), pumps, rising mains and OHSR in a single contract package. The

procurement will be done on a single responsibility basis wherein all materials and labor

component will be arranged by the contractor. The DWSC will not carry out any procurementof materials like cement, steel and pipes etc. for supplying to the contractor. The contractor


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will arrange all the materials on his own as per the specifications stipulated in the biddocument

A) Institutional and implementation arrangements

GoAP has proposed an institutional arrangement for effectively implementing the Project.The proposed institutional arrangement centers around PRIs taking on the key roles of servicedelivery such as Gram Panchayat Water and Sanitation Committee (GP-WSC) at the villagelevel and Multi Village Scheme - Water Supply Committee (MVS-WSC) for common facilitiesin MVS, both being sub-committees of PRIs. The community will play a significant role inthe asset creation process.

The State Water & Sanitation Mission (SWSM) and the District Water & Sanitation Missions(DWSMs) will be similar in nature to existing SWSM/ DWSMs for Swajaldhara Program withtheir role extended to the Project going forward. The overall structure at the state, district andvillage levels are as follows:

At state level RWSSD, SWSM, PSU The Secretary, RWSSD will have the overallresponsibility for implementing the APRWSS Project. The SWSM will carry outoverall sector policy formulation, planning and review, including the setting-up of theSector Information System for periodic monitoring of the sector performance. Thesecretariat of SWSM will be the State Project Support Unit (PSU) assisted by thedistrict units (D-PSUs) for implementing the World Bank Project in select districts. ThePSU will be headed by a Project Director of the rank of a Chief Engineer supported by

procurement cell comprising procurement consultant and department officials.

At district level ZP, DWSM, DWSC, D-PSU, RWSSD Division, MVS-WSC TheDWSM will be formed as a sub-committee of the ZP headed by the ZP Chairperson.DWSM will be responsible for the overall district program and policies, developmentof annual plan and budget and periodic review of targets and achievements. DWSCheaded by District Collector will be the executive arm of DWSM. DWSC will carry outall district activities including planning, designing, procurement and implementation ofthe schemes MVS, SVS, other works of the project and procurement of goods andservices and overseeing implementation of the Project, ensuring that thedecentralization and community participation agenda is implemented. The DWSC willalso carry out IEC and capacity building activities and management and monitoring ofall sub-projects. Similar to the state level, District PSU (D-PSU) will be the secretariatto DWSC. D-PSU will be headed by the Program Director and staffed with officers

from various disciplines. Under the project DWSC will be provided engineeringsupport by RWSSD Division/private TSP for all the schemes to be implemented. TheMVS-WSC will be formed as a sub-committee of the ZP. It will consist ofrepresentations from GPs covered. It will be responsible for approving all MVSschemes and undertaking O&M of common facilities. It will also endorse and sign-off all payments during the design and implementation stage.

At village level GP, GPWSC - The GP-WSC, a sub-committee of the GP, under theChairman, Gram Panchayat, will work with the DWSC for planning, designing andimplementing the SVS and the village sanitation program. It will also endorse andsign-off all payments during the design and implementation stage.


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2.4 Procurement Plan

2.4.1 Procurement plan is essentially planning of what procurement of goods, works andconsultants is to be carried out and at what time during the year. Thus preparation of a

procurement plan is a necessary requirement. It is a tool for proper monitoring and execution

of procurement activities.

Procurement Plan shall include description of contracts for the goods, works and for servicesrequired to carry out the project, consistent with project principles, the estimates after technicaland administrative approval and proposed methods for procurement over the total agreedimplementation period under loan/ credit agreement. The procurement shall be consistent with

budgetary allocations. The Procurement Plan shall be updated annually or as neededthroughout the duration of the project. The Procurement Plan is critical for:

o Ensuring satisfactory implementation of project;

o Ensuring speedy transfer of resources by way of disbursement;

o Achieving economy and efficiency; and

o Ensuring success of the project.

A sound procurement plan and public procurement is a vital arm for promoting goodgovernance and better fiscal management of the project.

2.4.2 Under Procurement Plan, works, goods and services to be procured are identified year-wise over the implementation period. Format for providing procurement plan for list of worksto be procured under the project, year-wise with estimated cost and method of procurement is

provided. The details shall be worked out in terms of number of habitations to be covered,estimated cost thereof and availability of contractors meeting the criteria to undertake theworks, year-wise over the project period including procurement method best suited for theitems and shall be entered in format. Similarly, the details for procurement of goods,equipment, vehicles, furniture etc. year-wise over the project period shall be entered in format... The details of consultancy services to be hired in terms of estimation of man months,estimated cost, method of selection of consultant, year-wise over the project period shall be

projected in format.

2.4.3 For procurement of works, goods, equipment etc. suitable package shall be framedwhich shall be determined by below noted factors, namely

Time limits

Economies of scale

Nature of goods and works required

Geographical location (dispersal of works)

Capacity of Contracting Agencies

However the packages would not be split to resort to procurement under less competitivemethod. The Estimates for Bid packages shall be entered as per format.

2.4.4 The Procurement Plan for the project shall be furnished to the Bank for its review andapproval. The Procurement Plan, method of procurement, categories of goods works and

consultancy services. to which they apply are specified in loan/ credit agreement which shallgovern the legal relationship between the Bank and Borrower (Govt. of Andhra Pradesh


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through Govt. of India) and shall be updated at least annually or earlier, if needed ,throughoutthe project The procurement plan will set forth

i. The particular contracts for the goods, works and/or services required to carryout the project during the financial year.

ii. The proposed methods for procurement of such contracts with their estimated

costs, procurement schedule in accordance with the procedures agreed in thefinancing agreement, and

iii. The related bank review procedures.

2.4.5 The Bank will disclose the initial 18 months Procurement Plan to the public after therelated loan / credit has been approved including subsequent disclosure of additional updatesafter the Bank has approved them.

2.5 Procurement under APRWSS ProjectThe procurement under the Works in the program will be handled by PSU/DWSC as perresponsibility given to them as per agreed institutional arrangements.

2.5.1 Single village schemes

The DWSC will be responsible for planning, designing,Procurement and implementation ofSVS. In order to ensure community participation in all these phases, the GP-WSC will endorse

planning, designing and implementation of the scheme carried out by the DWSC. DWSC willhave option to take technical support from RWSSD or Private Technical Service Provider(TSP) (in case there are capacity constraints in RWSSD). In either case, RWSSD or PrivateTSP, will be accountable to the DWSC through service contract agreement.

Contract with private TSP will be funded by the Bank, however, payment of fees or charges, if

any, to the RWSSD shall not be funded by the Bank.

As per policy of GoAP and Panchayati Raj Act, 1994, O&M of water supply Schemes is theresponsibility of PRIs. O&M of SVS will be carried out by the GPs themselves through GP-WSCs.

2.5.2 Multi village schemes

The DWSC will Procure and implement all MVS schemes through RWSSD. The DWSC willset-up the Water and Sanitation Committees for the MVS (MVS-WSCs) comprisingChairpersons of the participating GPs. MVS-WSC will sign-off of the design and all payments.

The O&M of the common facilities (bulk water supply) for all MVSs will be responsibility ofMVS-WSC. GP-WSC will be responsible for O&M of intra-village facilities of MVS. RWSSDwill prepare service management contract for O & M of common facilities of MVS.

The bidding documents and bid process for the MVS works shall be as per Bank guidelinesand as briefed in the manual. Each MVS will be contracted as a single contract on a singleresponsibility. The contractor will arrange all materials on his own as per the specificationsstipulated in the bid document.

o Contractor shall be responsible for implementation of entire scheme as per biddocument and hand over the same to DWSC in fully operational condition and to theentire satisfaction.


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2.5.3 Other works

The following works will also be implemented by DWSC which is responsible for design,procurement and construction. The procurement process will follow the bank guidelines as perthe thresholds identified for works.

1. UGD in select Mandal Headquarters2. Rain water Harvesting structures.3. Pilot testing of new technologies.4. Recharging of Ground water sources at selected sources

The following Sanitation facilities will be carried out through the beneficiaries of thecommunity:

a) ISl for BPL House holdsb) Soak Pits

2.6 Goods

Goods to be procured under the program will generally be office equipment, and vehicles.Goods will be procured at the DWSC and PSU level. The procurement will be carried out as

per the BankProcurement Guideline,Procurement under IBRD Loans and IDA Credits (May2004) Revised October 2006 for Works and Goods. Most of the procurement of goods will beof small value and will follow NCB/Shopping Procedures.

2.7 Consultancies:

These will include consulting services for hiring of Support Agencies, specialist - firms andindividual consultants (management, HRD, social development, engineering, monitoring,finance, etc); - training institutions; and for sector policy and other studies. The majorconsultancies will be:

o NGOs - Support Organizations /SHGs - for providing community mobilization,capacity building and Engineering Support if required.

o Engineering design support consultancy- independent construction and qualitymonitoring consultancies

o Management Support Consultancyo Chartered Accountancy firmso Consultant services required for training, workshops and seminars. The training and

workshops will be arranged at the State and District level.

2.8 Procurement Review and Audit

Procurement review refers to auditing of files and documents relating to the procurement ofGoods, works and consultancy services. Procurement review is basically carried out toascertain whether the procurement procedures were correctly and completely followed, both inletter and sprit. It brings out omissions/commissions and lapses, whether on account of poor orinadequate understanding of the procedures or willful negligence including likelyfraud/corruption evidence during the review. The report and observation of procurementreview therefore, also serve as a guide for taking remedial measures to streamline and improvethe procurement system. The procurement review covers the following aspects:-

a Whether the procurement plan was prepared?


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b Whether the procurement was made as per the procurement plan?

c Whether the method adopted for procurement was as per the threshold limits given inthe procurement manual?

d Whether the procurement sub-committee involved in the procurement procedure?

e Whether the overall procurement was done within a reasonable time?

f Whether there was any avoidable delay at any stage/ stages of the procurement process?

g Whether the necessary approval was taken from appropriate authority whereverrequired?

h Whether proper and adequate documents relating to procurement were maintained?

i Whether the technical and financial evaluation was done properly and in a fairmanner?

j Whether the contracted firm, supplied the goods or executed the work as per the

quality, quantity and price agreed upon?k Whether the goods were supplied or works executed in time and properly recorded in

stock books/works registers after inspection?

l Whether the payment was made to the supplier/ contractor in time? If not, reasons fordelay.

The procurement review shall be done by the following

a.External Firm for Post review of the procurement: - An agency will be appointed bythe project office at the state level for an annual review of sample of all the procurement

carried out during the previous year. The TOR of the agency shall be approved by the bankbefore appointing the agency. The procurement review shall be done at the state, districtand GP level and the Bank shall review the report of the Agency.

b.Internal Auditors: The Internal auditors (firm of chartered accountants) will beappointed by PSU for conducting the Financial Audit at the department level. The TOR offinancial audit will include adequate requirement to cover review of procurement activities.The auditor will carry out the review of procurement procedures adopted for works, goodsand consultancy services.

c.Statutory Auditors :-The statutory audit of the Program will be conducted by theComptroller and Auditor General of India, who will also review the procurement

procedures adopted and give a report accordingly .The review shall be done both at theDepartment level (State/District/ZP/Mandal/GP).

d. By The World Bank:- In addition, the World Bank will have the right to carry out theprior and post review of the contracts by state, district and GP. The bank staff wouldconduct post award review during supervision missions.

2.9 Misprocurement

The Bank does not finance expenditures for goods, works and consultancy services, whichhave not been procured/ contracted in accordance with the agreed provisions of the financing

agreement and as further elaborated in Procurement Plan agreed with the Bank. In such cases,the Bank will declare misprocurement, and it is the policy of the Bank to cancel that portion of


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credit/ loan allocated to the goods, works, and consultancy services that have beenmisprocured. The Bank may, in addition, exercise other remedies provided for under theFinancing Agreement. Even when the contract is awarded after obtaining no objection fromthe Bank, the Bank may still declare misprocurement, if it concludes that the no objectionwas issued on the basis of incomplete, inaccurate, or misleading information furnished by the

Borrower or the terms and conditions of the contract had been modified without Banks priorapproval.

2.10 Fraud and Corruption

It is the Banks policy to require that Borrowers (including beneficiaries of Bank loans), aswell as bidders, suppliers, and contractors and their subcontractors under Bank-financedcontracts, observe the highest standard of ethics during the procurement and execution of suchcontracts. In this context, any action taken by a bidder, supplier, contractor, or a sub-contractor to influence the procurement process or contract execution for undue advantage is

improper.In pursuance of this policy, the Bank:

(a) Defines, for the purposes of this provision, the terms set forth below as follows:

(i) corrupt practice another party refers to a public official acting inrelation to the procurement process or contract execution]. In this context,

public official includes World Bank staff and employees of other

organizations taking or reviewing procurement decisions. is the offering,giving, receiving or soliciting, directly or indirectly, of anything of value toinfluence improperly the actions of another party;

(ii) fraudulent practice a party refers to a public official; the termsbenefit and obligation relate to the procurement process or contract

execution; and the act or omission is intended to influence the procurement

process or contract execution. is any act or omission, including amisrepresentation, that knowingly or recklessly misleads, or attempts tomislead, a party to obtain a financial or other benefit or to avoid an obligation;

(iii) collusive practice parties refers to participants in the procurementprocess (including public officials) attempting to establish bid prices at

artificial, non competitive levels. is an arrangement between two or moreparties designed to achieve an improper purpose, including to influence

improperly the actions of another party;

(iv) coercive practice a party refers to a participant in the procurementprocess or contract execution. is impairing or harming, or threatening toimpair or harm, directly or indirectly, any party or the property of the party toinfluence improperly the actions of a party;

(v) "obstructive practice" is

(aa) deliberately destroying, falsifying, altering or concealing of evidencematerial to the investigation or making false statements to investigators

in order to materially impede a Bank investigation into allegations of acorrupt, fraudulent, coercive or collusive practice; and/or threatening,


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harassing or intimidating any party to prevent it from disclosing itsknowledge of matters relevant to the investigation or from pursuing theinvestigation; or

(bb) acts intended to materially impede the exercise of the Banks inspection

and audit rights provided for under sub-clause 3.1 (e) below.

(b) will reject a proposal for award if it determines that the bidder recommended foraward has, directly or through an agent, engaged in corrupt, fraudulent, collusive,coercive or obstructive practices in competing for the contract in question;

(c) will cancel the portion of the loan allocated to a contract if it determines at any timethat representatives of the Borrower or of a beneficiary of the loan engaged incorrupt, fraudulent, collusive, or coercive practices during the procurement or theexecution of that contract, without the Borrower having taken timely andappropriate action satisfactory to the Bank to address such practices when they

occur;

(d) will sanction a firm or individual, including declaring ineligible, either indefinitelyor for a stated period of time, to be awarded a Bank-financed contract if it at anytime determines that the firm has, directly or through an agent, engaged in corrupt,fraudulent, collusive, coercive or obstructive practices in competing for, or inexecuting, a Bank-financed contract; and

(e) will have the right to require that a provision be included in bidding documents andin contracts financed by a Bank loan, requiring bidders, suppliers, and contractorsand their sub-contractors to permit the Bank to inspect their accounts and records

and other documents relating to the bid submission and contract performance and tohave them audited by auditors appointed by the Bank.

A firm declared ineligible by the World Bank in accordance with sub para (d) above or inaccordance with World Bank Group anti corruption policies shall be ineligible to be awarded aBank financed contract during the period of time determined by the Bank.

2.11 Delegation of AuthorityFor implementation of project in a time-bound manner, the financial delegation ofvarious authorities shall be as under.

Sl.No.

Particulars Description Approvingauthority

1. AdministrativeApproval

i) Single Village Schemes( SVS)

ii) Multi Village Schemes ( MVS)

iii) Schemes with innovation Technologies, rain waterharvesting, ground water recharge works, augmentation ofexisting water supply schemes etc.

iv) Sanitation facilities- ISLs, Soak Pits, Solid and Liquidmanagement in major GPs.

v) Under Ground Drainage in Mandal Headquarters

DWSC

2. Technical

Sanction ofDetailed

i) Single Village Schemes( SVS)

ii) Schemes with innovation Technologies, rain waterharvesting, ground water recharge works, augmentation of

DWSC


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Estimates existing water supply schemes etc.

iii) Sanitation facilities

i) Multi Village Schemes (MVS)

ii) Under Ground Drainage in Mandal Headquarters

As per existingpowers at differentlevels- CE/SE

2.12 Delegation of financial powers in the RWSS department

The financial authority in terms of technical sanction and tender calling in the RWSSdepartment is as follows. The delegation of financial powers will be adhered to for all theschemes carried out by the department:

S. No. Designation Technical Sanctionand tender callingPowers

Tender approvingAuthority *

ContractAwardAuthority

1 CE Above 50 Lakhs Beyond 1 crore TenderCommittee.Upto 1 crore Engineer In Chief.

CE

2 SE Upto 50 Lakhs Upto 50 Lakhs SE

3 EE Upto 10 Lakhs Upto 10 Lakhs EE

4 DEE UPto 2 Lakhs Upto 2 Lakhs DEE

*Existing powers of respective Officers to accept excess tenders will be applicable to projectworks also.

2.13 Threshold ValuesProcurementMethod

Contract Value (Threshold) Contract subject to PriorReview

ICB (Goods) =>$500000 per contract All Contracts

NCB (Goods) > $50000 but less than $500000per contract

a)First contract to beimplemented by eachdistrict irrespective ofvalue. b) Subsequently allcontracts more than$500000 c) All othercontracts will be subject

to Post review by theBank.

ICB (Work) =>$10 Million per contract All Contracts

NCB (Work) >$50000 but less than $10Million per contract

a)First two SVS contractsto be implemented byeach district irrespectiveof the value and firstMVS contract . b)Subsequently, allcontracts more than$1,000,000 c) All othercontracts will be subject


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to Post review by theBank

Shopping(Goods& Works)

=< $50000 per contract All contracts will besubject to Post review bythe Bank

DirectContracting(Goods)

Petty purchases upto $200.

DirectContracting(Goods &Works)

Goods and works which meetthe requirement of Paragraph3.6 of the Bank Guidelines with

prior Bank Agreement

All procurement shall be

with Banks priorclearance. Contracts

>$10000 will be priorreviewed.

CommunityContracting

< $15000 Post Review

Force Account Works that meet therequirement of paragraph 3.8 ofthe Guidelines may be

Will be procured withBank prior clearance.

No Goods and Woks procurement under ICB method is envisaged under the project

Consultancy Services

Select Quality and Cost Based Selection,Quality-Based Selection; Fixed Budget

Selection, Least Cost Selection ; ConsultantsQualification

Contracts estimated to cost $100,000 or moreshall be prior reviewed All other contracts aresubject to Post review

Single Source Selection in accordance with

the provision of Bank Guideline

All contracts will require Bank prior approval.

Sole source contracts more than $50000 forFirm and more than $30000 for the individualwill be prior reviewed by the Bank.

Individual Consultants in accordance withprovisions of the Bank Guideline.

Contracts estimated to cost US$10000 ormore shall be prior reviewed. All othercontracts are subject to post review by theBank

Procurement of SO if any, will be carried out in accordance with the Bank guideline andthe procedures detailed in the Project Procurement manual.


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2. 14 Performance Indicator

The performance of the procurement carried out for the project will be assessed through thefollowing indicators

Percentage of invitation for open tenders publicly advertised Average number of days between tender advertisement and tender opening

Percentage of tenders opened publicly and recorded

Percentage of tenders rejected in each process

Percentage of variation in contract price versus completed price

Percentage of tenders with two or fewer responsive bidders

Percentage of contract extension given

Percentage of cases of rebidding

Percentage of payments made late (e.g. exceeding the contractually specified paymentsschedule)

Percentage of major contracts without completion reports Number of complaints received, addresses and resolved


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Chapter-IIIProcess Description of Methods of Procurement of Goods and

Works

3.1 Procurement Process

The goods and works will be procured under project as per the Bank procurement guidelines.The guidelines are mentioned in the booklet-Guidelines: Procurement under IBRD Loans andIDA Credits (May 2004) Revised October 2006 for Works and Goods. Detailed instructions on

procedures to be followed along with the suggested formats for preparation of evaluation reports,and other procurement documentation are given in the following document:

Standard Bidding Document ((SBD) for procurement of Civil Works and Goodsunder NCB procedures in Bank financed projects;

SBD for Procurement of Civil Works and Goods under ICB procedures in Bankfinanced projects.

As per the guidelines provided above,theprocurement process shall comprise of following:-

a)Assessment of procurement requirements for works will be spelt out clearly in the procurement planin accordance with the Budget allocation agreed in the cost tables..b) The strategy for procurement will be decided keeping the nature of works, economies of scale,capacity of the contractor and time limit with other parameters.c) The mode of procurement emanates from the strategy adopted and will on the basis of theprocurement threshold as accepted by the Bank for the project.d)The similar process will be adopted for the procurement of goods and services at the state as well asin the district level and will be in line with the procurement plan.

The following procurement process will be adopted once the strategy and the mode of procurement getdecided:

i. Finalization of Bidding Document and specifications by tender calling authority as per sitecondition, specification, source of supply and designed detail.

ii. For the SVS and MVS works the tenders will be invited by the DWSC. In all the cases aminimum period of 30 Days from the date of publication of the notice will be allowed givingthe bidder a minimum period of 30 days for the submission of the bids. The notice shall also bepublicized in the notice board of the authority for calling tenders. Instead of followingprocurement method of NCB , National Shopping can also be adopted for civil works,provided the estimate cost is with in the threshold limit..

iii. Tenders to be opened after the deadline of receipt of bid on the same day at an interval notexceeding half an hour.

iv. Comparative evaluation of bids by DWSCv. Bids of lowest responsive bidder after evaluation to be put up to the DWSC/SE/CE/Engineer-

in-Chief/Tender Committee of the Department for acceptance as per delegation of powers.vi. Letter of acceptance issued to lowest successful bidder.vii.Agreement will incorporate all agreements between the Employer and Successful Bidder. It

will be signed by the Employer and kept ready for signatures of the Bidder in the office of theEmployer with in 28 days following notification of award and letter of acceptance. Within 21days of receipt, successful bidder will sign the Agreement and deliver to Employer.

Procurement steps are explained in the form of a flow chart as under


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Flow chart of the procurement process

ASSESSMENT OF REQUIREMENTS

DECIDING PROCUREMENT STRATEGY

MODE OF PROCUREMENT

PREPARATION OF BID DOCUMENTS

ADVERTISEMENT FOR INVITING BIDS

ISSUE OF SALE OF BID DOCUMENT

PRE BID MEETING

RECEIPT AND OPENING OF BIDS

EVALUATION OF BIDS

SEEKING APPROVAL OF BANK WHEN APPLICABLE

NOTIFICATION OF AWARD

SIGNING OF CONTRACT

INSEPCTION AND QUALITY CONTROL

COMPLETION OF WORKS AND HANDING OVER

3.2 Procurement Schedule and Plan

The size and scope of individual packages under Procurement Plan shall be decided based onthe magnitude, nature and location of works; quantity/ number and nature of goods andservices, keeping in view that works and goods are to be procured economically and efficientlyconsistent with the quality. Procurement schedule in the prescribed formats indicating details


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of each package shall be compiled and forwarded to the Bank for review and clearance beforeinitiating action. The first 18 month procurement plan has been prepared and sent to Bank. Theabove formats should be used for preparing subsequent annual plan.

3.3 Methods of Procurement

The choice of appropriate method of procurement is related to the nature, size, complexity,likely impact of the assignment, technical and financial considerations and particularcircumstances of the assigned job. It is necessary to define the assignment, the objectives andscope of goods, works and services before deciding the selection process.2.8.1 Method of procurement includes:

(a)Goods, works and services (other than consultancy services)

o International Competitive Bidding (ICB)o National Competitive Bidding (NCB)

o Shoppingo Direct Contractingo Force accounto Community Participation in Procurement

(b) Consultancy Services

o Quality and Cost Based Selection (QCBS)o Quality Based Selection (QBS)o Selection under a Fixed Budget (FBS)o Least Cost Selection (LCS)

o Selection Based on Consultants Qualification (CQ)o Single Source Selection (SSS)o Individual Consultant (IC)

(c)Community Driven Procurement

DWSC will entrust the following works that will be carried out by the beneficiaries of thecommunity:

ISL for BPL Households

Soak Pits

3.3.1 International Competitive Bidding (ICB).

o This method of procurement of goods, works and services is generally adopted wheresupplies need import and foreign (international) firms are expected to participateirrespective of the value.

o This requires adequate notification of client requirements to provide equal opportunityto bid for the required goods and works. The size and scope of individual contracts willdepend on the magnitude, nature and volume of projects. For projects requiring similar

but separate item of equipment or works, bids may be invited under alternative contractoption that would attract the interest of both small and large firms, which could beallowed at their option, to bid for individual contracts (slices) or for a group of similarcontracts (package). All bids and combination of bids shall be received by the same


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deadline and opened and evaluated simultaneously so as to determine the bid orcombination of bids offering the lowest evaluated cost to the client.

o For projects that include ICB, the DWSC is required to prepare and submit to the Banka General Procurement Notice and Bank shall arrange for its publication in UNDevelopment Business online (UNDB online) and the Development Gateway dg

Market. Simultaneously it shall be published in at least one newspaper of nationalcirculation and web site of the RWSSD.

o The related prequalification or bidding documents, as the case may be, shall not bereleased to the public earlier than the date of publication of the General Procurement

Notice.o The prequalification is usually necessary for large or complex works or in any other

circumstances in which the high cost of preparing detailed bids could discouragecompetition

o Bidding preparation period shall be 45 to 90 days from date of start of sale of biddingdocument or invitation of bid which ever is later.

o The bidding documents shall include the details as is described in various paras that

follow.o Within two weeks of receiving the Banks no objection to the recommendation of

contract award, the PSU shall publish in UNDB online and in dg market and theSWSM web site the results identifying the bids and lot numbers and the followinginformation:

(a)name of each bidder who submitted a bid;

(b)bid prices as read out at bid opening;

(c)name and evaluated prices of each bid that was evaluated;

(d)name of bidder whose bids were rejected and the reasons for their rejection; and

(e)name of the winning bidder, and price it offered, as well as the duration and

summary scope of the contract awarded.

o If after publication of results of evaluation PSU/DWSC receives protests /complaintsfrom the bidders, and if as a result of analysis of such protests PSU/DWSC changes itscontract award recommendation and the Bank accepts such changes, then the revisedcontract recommendations containing all the above details shall be published with in 2weeks in UNDB online and in dg market and the PSU web site

3.3.2 National Competitive Bidding (NCB)

o National competitive bidding for procurement of goods, works and services is mostappropriate way of procurement when nature or scope of goods or works are unlikely toattract foreign competition because:

The contract values are small;The works are scattered geographically or spread over time;Works are labour intensive; orThe goods or work are available locally at prices below the international market.

o However foreign bidders are not to be precluded from participation if they wish to bid.o To have competitive bids, the advertising of bids shall be in at least one English

newspaper with nation wide circulation and one regional language newspaper and website of PSU. Tendering period shall be minimum 30 days from date of publication.Tenders can be sold from different places but shall be received at one place only.Tenders shall be opened half an hour after the deadline of submission.


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o The bidding documents shall provide clear instructions on how bids should besubmitted, how prices should be offered, and the place and time of submission of bids.Adequate response time for preparation and submission of bids shall be provided. The

procedures shall provide for adequate competitions in order to ensure reasonable prices,and methods used in the evaluation of bids and the award of contracts shall be objective

and made known to all the bidders in bidding documents and not be applied arbitrarilyo The procedure shall also include public opening of bids, publication of results of

evaluation and of the award of contract and provision for bidders to protest.o Within two weeks of receiving the Banks no objection to the recommendation of

contract award, the client shall publish in the PSU web site the results identifying thebids and lot numbers and the following information:(f) name of each bidder who submitted a bid;

(g) bid prices as read out at bid opening;

(h) name and evaluated prices of each bid that was evaluated;

(i) name of bidder whose bids were rejected and the reasons for their rejection; and(j) name of the winning bidder, and price it offered, as well as the duration and

summary scope of the contract awarded.

If after publication of results of evaluation PSU/DWSC receives protests /complaints from thebidders, and if as a result of analysis of such protests PSU/DWSC changes its contract awardrecommendation and the Bank accepts such changes, then the revised contractrecommendations containing all the above details shall be published with in 2 weeks in theRWSSD website

NCB Conditions under the Project : Procurement under NCB method shall be carried out in

accordance with the paragraph 3.3 and 3.4 of the Procurement Guidelines FOR Goods and

Works with following provisions:

i) Only the model bidding documents for NCB agreed with the GOI Task Force [andas amended for time to time], shall be used for bidding;

ii) Invitations to bid shall be advertised in at least one widely circulated national dailynewspaper, at least 30 days prior to the deadline for the submission of bids;

iii) No special preference will be accorded to any bidder either for price or for otherterms and conditions when competing with foreign bidders, state-owned enterprises,small-scale enterprises or enterprises from any given State;

iv) Except with the prior concurrence of the Bank, there shall be no negotiation of pricewith the bidders, even with the lowest evaluated bidder;

v) Extension of bid validity shall not be allowed without the prior concurrence of theBank (i) for the first request for extension if it is longer than four weeks; and (ii)for all subsequent requests for extension irrespective of the period (such

concurrence will be considered by Bank only in cases of Force Majureandcircumstances beyond the control of the Purchaser / Employer);


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vi) Re-bidding shall not be carried out without the prior concurrence of the Bank. The system

of rejecting bids outside a pre-determined margin or bracket of prices shall not be used inthe project;

vii) Rate contracts entered into by Directorate General of Supplies & Disposals, will notbe acceptable as a substitute for NCB procedures. Such contracts will be acceptablehowever for any procurement under National Shopping procedures;

viii) Two or three envelop system will not be used.

Steps to be followed under NCB:

o issue of Invitation for Bids (IFB, Enclosure -1);o Publication of IFB in at least in one English National Newspaper with wide circulation

in India and one Regional Newspaper.

o Use of standard bidding documents;o Sale of bidding documents after the publications and permitting adequate bidding

period.o public opening of the bids and preparation of minutes of bid opening;o evaluation of bids without discrimination and strictly as per the clauses of the bid

document;o award of contract to the lowest evaluated responsive bidder; ando monitoring performance of contract.

The NCB contracting shall adhere to the following procedure:

o Only the model bidding documents for NCB agreed with the GOI Task Force (and asamended from time to time) shall be used for bidding

o Invitations to bid shall be advertised at least in one widely circulated national dailynewspaper, and one regional newspaper, at least thirty days prior to the deadline for thesubmission of bids.

o No special preference will be accorded to any bidder when competing with foreignbidders, state-owned enterprises, small scale enterprises or enterprises from any givenstate

o Except with prior concurrence of the Bank, there shall be no negotiation of price withthe bidders, not even with the lowest evaluated bidder.

o Extension of bid validity shall not be allowed without the prior concurrence of the Bank(a) for the first request for extension if it is longer than four weeks; and (b) for allsubsequent requests for extension irrespective of the period (such concurrence will beconsidered by Bank only in cases of Force Majeure and circumstances beyond thecontrol of the purchaser/ employer.

o Re-bidding shall not be carried out without prior concurrence of the bank. The systemof rejecting the bids outside a pre-determined margin or bracket of prices shall not beused.

o Rate contracts entered into by DGS&D will not be acceptable as a substitute for NCBprocedures. Such contracts will be acceptable for any procurement under shoppingprocedures.

o Two or three envelop system will not be used.


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3.3.3 Shopping

Packages of goods, equipments (including vehicles) and civil works estimated to cost less thanUS$ 50,000 equivalent per contract would be procured following Shopping procedures inaccordance with provisions of para 3.5 of the procurement guidelines. State Government rate

contracts, or direct procurement through Super Bazar / Janatha Bazar are not acceptable as asuitable alternative to Shopping. The rate list of these can however be considered as one of thequotations under the Shopping procedure. DGS&D rate contracts are acceptable for any

procurement under the Shopping procedures.

All Implementing agencies will follow Shopping method wherever specified, based oncomparing price quotations obtained from at least three suppliers or contractors, to ensurecompetitive prices. The shopping is simple and rapid procurement method and does not needcomplex documentation. This method will be followed for procurement of Goods and Worksspecified in the procurement plan and is accepted generally for procuring small amounts ofreadily available off-the-shelf goods or standard specification items or simple civil works of

small value.

Steps to be followed

1 Issue request for quotation.2 Evaluate atleast three quotations by preparing comparative statement3 Select the lowest responsive offer4 Issue purchase order


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Inviting Quotations

Give description, specifications, quantity and time & place of delivery.(Enclosure XIV).

Say that the contract shall be for the full quantity of each item.

All duties, taxes and other levies payable on the raw materials and componentsshall be included in the total price.

Sales tax in connection with the sale shall be shown separately.

The rates quoted by the bidder shall be fixed for the duration of the contract andshall not be subject to adjustment on any account.

The Prices shall be quoted in Indian Rupees only.

Each bidder shall submit only one quotation.

Quotations could also be obtained by telex or facsimile.

Quotation shall remain valid for a period not less than 10 days after the deadlinedate specified for submission.

The terms of the accepted offer shall be incorporated in a purchase order orbrief contract

The evaluation of quotations shall follow the same principles as of openbidding. If quotations are called for more than one item, it shall also beindicated whether the evaluation would be item wise or as a package.

The terms of accepted offer shall be incorporated in a purchase order or briefcontract.

Evaluation of Quotations

The Purchaser will evaluate and compare the quotations determined to be

substantially responsive i.e. the quotations which conform to the laid downterms & conditions, and specifications.

The Quotations would be evaluated for all the item together or would beevaluated separately for each item (select one option and indicate in thequotation notice).

Sales tax in connection with sale of goods shall be or shall not be taken intoaccount in evaluation.

Award of contract

The Purchaser will award the contract to the bidder whose quotation has been

determined to be substantially responsive and who has offered the lowestevaluated quotation price.

Purchase order should include:

Description, specification and quantity along with price.

Delivery period.

Terms of delivery like free on rail (f.o.r.) station of dispatch or free deliveryto the consignee.

Payment termsPrior approval of competent authority shall be arranged for items to be purchased or works to

be undertaken with brief description, specification and estimated costs and agencies from

whom quotations shall be invited.


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3.3.4 Direct Contracting

Direct contracting iscontracting without competition (single source) and may be anappropriate method under following circumstances:

i. An existing contract for goods or works, awarded in accordance with procedures

acceptable to the Bank, may be extended for additional goods or works of similarnature. The Bank shall be satisfied in such cases that no advantage would be obtained

by further competition and that the prices of extended contract are reasonable.ii. Standardization of equipment or space parts, to be compatible with existing equipment

may justify additional purchases from the original supplier.iii. The required equipment is proprietary and obtainable only from one source.iv. The contractor responsible for a process design requires the purchase of critical items

from a particular supplier as a condition of a performance guarantee.v. In exceptional cases, such as in response to natural disasters.

After the contract is signed the PSU shall publish in UNDB online and in dg market the nameof the contractor, price duration and summary scope of the contract. This publication may bedone quarterly and in the format of summarized table covering the previous period

3.3.5 Force Account:

DWSC will resort to this method in case of works carried out by employees of RWSSD, usingown materials and equipment as a last resort and with the prior approval of the Bank. Thismethod will be preferred when:

i. quantities of work involved cannot be defined in advance;

ii. works are small and scattered or in remote locations for which qualifiedconstruction firms are unlikely to bid at reasonable prices;

iii. work must be carried out without disrupting on-going operations;iv. risks of unavoidable work interruption are better borne by the borrower rather

than by a contractor;v. in case of emergencies needing prompt attention.

3.3.6 e-Procurement

E-procurement can be resorted to under the project only after getting the World Banks clearance forthis procedure.

3.4 Bidding Document

3.4.1 Bidding documents shall have to be prepared on the basis of the standard BiddingDocuments cleared with the Bank for the Project. Deviation shall not be made without priorclearance from the Bank.

3.4.2 Bidding document shall include invitation of Bids (Enclosure III); Instructions to theBidders; Form of Bid; Basis of bid evaluation and contract award; Form of Contract;Conditions of Contract, both general and special; Specifications and Drawings; List of Goodsor Bill of Quantities; Delivery time or schedule of completion; Price Schedule; Bid SecurityForms; contract Form; Performance Security Form and Advance Payment Security Form etc.,

Bidding document should specify the relevant factors in addition to price to be considered in


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the bid evaluation and the manner in which they will be applied for the purpose of determiningthe lowest evaluated bid.

3.4.3 Bidding documents in the case of goods shall specify what inspection and tests thepurchaser requires, where and who will conduct the tests. The purchasers should notify thesuppliers in writing the identity of inspection agency retained alongwith the supply order. Adraft model clause for inspection and testing of samples/ items to be included in the contract..

3.4.4 Where Package and Slice procedure is followed, the clauses of submission andevaluation of bids should be modified suitably and modifications got cleared with the Bank.

3.4.5 The following formats of Bidding Documents of World Bank shall be used for theimplementation of the project :

- Contracts for works following ICBprocedures

SBD

- Contracts for goods following ICBprocedures

SBD

- Contracts for works valued less thanor equivalent of US$ 50,000

W9

- Contracts for works valued less thanor equivalent of US $ 50,000 each underShopping procedures

W5

- Contracts for works US $ 50,000and upto US $ 100,000 under NCB

procedures.

W1(Draft Biddocument forthe project Tobe cleared with

Bank )- Contractors for works beyond US$100,000 and upto US$ 10 million under

NCB procedures

W2(Draft Biddocument forthe project to

be cleared withBank)

- Contracts for goods valued less thanor equivalent of US$ 50,000/-) followingShopping Procedures

E5

- Contracts for goods beyond US$50,000 and upto US$ 5,00,000 following

NCB procedures

E1

3.4.6 The below noted aspects shall be complied with while inviting the bids and theirevaluation:

i. No special preference will be given to any bidder either for price or for any other terms andconditions when competing with state owned enterprises, small scale enterprises etc.

ii. Except with prior concurrence of World Bank there will be no negotiations of price withthe bidders even with the lowest evaluated bidder.

iii. Extension of bid validity will not be allowed without prior concurrence of World Banka. For the request for extension of it is longer than 4 weeks and


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b. For all subsequent requests for extension irrespective of the period.iv. Re-bidding will not be carried out without prior concurrence of World Bankv. DGS&D rate contract or State Controller of Stores contracts will not be acceptable as a

substitute for NCB procedure. However DGS &D rates will be acceptable as a substitutefor shopping.

vi. The two or three envelope system will not be used.vii.No materials like pump, pipes, cement steel etc shall be supplied to contractor by

PSU/DWSC/GPWSC.

3.4.7 Guidelines as regard commercial terms of Bidding Document shall be as under:

i. Period of invitation of bids should not be less than 45 days in case of ICB and 30 days incase of NCB contracts.

ii. Validity of Tenders: Bidders shall be required to submit tender valid for period of 90 days.iii. Earnest Money/Bid Security: shall be 2% of the estimated amount of goods, works and a

specific amount be indicated. The bid security shall be in the form of Demand Draft /

Bankers Cheque/ Bank Guarantee from a Scheduled Bank, which should be valid for 45days beyond validity period of bid,. The bid security of unsuccessful bidders shall bereturned within 28 days of the end of bid validity period. The bid security shall be forfeitedin the event of withdrawal of bid within original validity or if the bidder does not accept thecorrection to the Bid Price in pursuant of corrections as per provisions of Bid Document,and in the case of successful bidder if the bidder fails to sign the agreement withinspecified period or furnish the required performance security within specified time limit.

iv. Performance Security Deposit: The amount of performance security shall be 5 (five)percent of contract price plus additional security for unbalanced bids in pursuant toprovisions of Bidding document in the shape of Bank Guarantee from a scheduled Bank/certified cheque/ Bank Draft in favour of concerned Executive Engineer, DWSC valid upto

28 days after date of expiry of defects liability period/ warranty period/ warranty period, asapplicable..The performance security deposit shall be refunded within one month of the completion ofsupply of goods or expiry of warranty period/ defect liability period as applicable .

Failure of the successful bidder to furnish performance security shall constitute a breach ofcontract, cause of annulment of the award, forfeiture of the bid security, and any otherremedy the Employer may take under the contract, and the Employer may resort toawarding the contract to next ranked bidder.

v. Retention Money: shall be deducted @ 6% from each bill subject to a maximum of 5% offinal contract price. 50% of the amount retained shall be paid to the Contractor oncompletion of whole of work and balance 50% on expiry of defect liability period providedthe Engineer has certified that all defects notified by the Engineer to the Contractor beforethe end of this period have been corrected. On completion of the whole work thecontractor shall have the option to substitute retention money (balance 50%) by a BankGuarantee from a Scheduled Bank of similar amount.

vi. Defect Liability Period: Two years from the date of certification of completion of work.vii.Delay in updated Program: A program detailing the scheduling of the works is to be

submitted at the start of the contract. An update of the program showing the actual progressachieved for each activity and the timing of the remaining work and changes in theremaining activities is required to be submitted as per the contract .Any delay in

submission of an updated Program an amount to be mentioned in the contract data shallbe withheld


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viii. Liquidated damages: Liquidated damages @ 0.10% (percent) per day (for goods) and0.05 % (percent) per day (for works) of the value of goods / works for which the delay insupply of goods/ completion of works was incurred subject to a maximum of 10 (ten)

percent of final contract price.ix. Liability on Termination: In the event of termination because of fundamental breach of

contract by contractor, the provision for additional cost for completion of works shall be20% (percent) of unexecuted works to be adjusted from the final payment of the contractor.

3.5 Sale, Receipt and Opening

3.5.1 Bidding documents should be made available for sale till a day prior to the last date ofreceipt of bids, to all those who intend to participate in the bidding. A period of minimum 30days shall be ensured from date of sale of bidding documents and receipt of bids.3.5.2 Bidders shall be permitted to deposit their bids on any day during the bidding periodeither by post or in person. Bids shall be received only at one place (i.e. by the authority

inviting the Bids) and shall be kept in safe custody till the stipulated time of opening.3.5.3 Last date of receipt of bids and opening of Bids shall be the next day, following theclose of sale of Bidding Documents. If the day happens to be a holiday, the last date of receiptand opening of bids shall be the next working day. The bids will be opened at scheduled timeof closure of receipt of bids. All bids received shall be opened in presence of biddersrepresentatives who choose to attend and shall sign a register evidencing their attendance.

3.5.4 Envelopes marked WITHDRAWAL shall be opened first, and the name of the biddershall be read out. Bids for which acceptable notice of withdrawal has been submitted shall not

be opened. Subsequently all envelopes marked MODIFICATION shall be opened andsubmission therein read out in appropriate detail. The bidders names, bid prices including any

alternative Bid Price or deviations, discounts, bid modification and withdrawals and thepresence or absence of bid security and such other details as considered appropriate shall beannounced during opening of bids in the meeting. All cuttings and /over writings observed inthe Bid Form and Price schedules shall be authenticated by the members of Bid OpeningCommittee by encircling and initialing the cuttings/ over writings. The minutes of the bidopening should be prepared in the specified format. No bid shall be rejected at bid opening,except for late bids, which shall be returned unopened to the bidder.

3.5.5 Bids and modifications that are not opened and read out at bid opening shall not beconsidered further for evaluation, irrespective of the circumstances.

3.6 Pre-bid Conference

3.6.1 Pre bid conference should be provided where necessary and should be convened earlyin the bidding process (midway), but should allow sufficient time for bidders to study the

bidding documents and prepare queries/ clarifications.

3.6.2 The meeting should be scheduled at about midpoint of bidding time. The purpose ofmeeting will be to clarify issues and bidders queries/questions on any matter that may beraised at this stage.. Minimum post qualification criteria to be met, important provisions of the

bidding document, schedule of requirements, special conditions of contract and special featuresof the specifications shall be explained to the prospective bidders.

3.6.3 Minutes of meeting indicating the responses given in the meeting (including anexplanation of query but without identifying the source of inquiry) shall be furnishedexpeditiously to all those attending the meeting and subsequently to all the purchases of

bidding documents, after getting the same cleared with the Bank.


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3.6.4 Any modification of the bidding documents which may become necessary as a result ofthe prebid meeting shall be made exclusively through issuance of corrigendum (after gettingthe same cleared with the Bank) and not through the minutes of the prebid meeting.

3.7 Price Adjustment

3.7.1 Bidding documents shall state either (i) bid price will be fixed; or (ii) that priceadjustment will be made to reflect any charges (upwards or downwards) in major costcomponents of the contract such as materials, labour, POL(fuel & lubricants), plant andmachinery spares.3.7.2 Bid adjustment clause shall be provided when the estimatedvalue of work exceeds Rs.100 lakhs and period of completion of works or supply of goods is more than 18 months. Thetotal percentage of materials, labour, POL (fuel & lubricants), plant and machinery sparescomponents should be equal to 100, in the formula.

3.7.3 When the total estimatedvalue of contract does not exceed Rs. 100 lakhs and stipulated

period of completion of works or supply of goods is less than 18 months, prices quoted by thebidder shall be fixed during the bidders performance of the contract and not subject tovariation on any account. In such cases, a bid submitted with an adjustable price quotation will

be treated as non responsive and rejected.3.7.4 The contract price shall be adjusted for increase or decrease in the rates and price oflabour, materials, fuels and lubricants in accordance with following principles and proceduresand as per formula given in the bid document.

(a) The price adjustment shall apply for the works done from the start dategiven in the contract data upto the end of initial intended completion date orextension granted by the Engineer and shall not apply to the work carried out

beyond the stipulated time for reasons attributable to the contractor.

(b) The price adjustment shall be determined during each quarter from theformula.(c) Following expression of meanings are assigned to the work done duringeach quarter.R = Total value of work done during the quarter. It would include theamount of secured advance for materials paid for (if any) during the quarter,less the amount of the secured advance recovered, during the quarter. It shallexclude value of works executed under variation for which price adjustmentshall be worked separately based on the terms mutually agreed.

3.7.5 To the extent that full compensation for any rise or fall in costs to the contractor is notcovered by the provision of formula or other clauses of the contract, the unit rates and pricesincluded in the contract shall be deemed to include amounts to cover the contingency of suchother rise or fall in costs.

3.8 Evaluation of Bids

3.8.1 Before proceeding for evaluation, it shall be ascertained whether the bids:

(i) meet the eligibility requirements

(ii) have been properly signed

(iii) are accompanied by the required authorization/ undertaking

(iv) are accompanied by the required securities.


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(v) are substantially responsive to the requirements of bidding documents.

(vi) provides any clarification and or substantiation that the Employer is required todetermine the responsiveness; and

(vii) are otherwise generally in order.

If a bid is not substantially responsive, that is, it contains material deviation from or reservationto the terms, conditions and specifications in the bidding documents, it should not beconsidered further. The bidder must not be permitted to correct or withdraw material deviationsor reservations once bids have been opened.

3.8.2 The Employer may waive any minor informality or unconformity or irregularity in abid which does not constitute a material deviation, provided such waiver does not prejudice oraffect the relative ranking of any bidder. In those cases for the purposes of evaluation,adjustments should be made for the costs to the Employer of any quantifiable non-materialdeviation or reservations.

3.8.3 A substantiallyresponsive bid is one which conforms to all the terms and conditions ofbidding document without material deviations. The determination of a bids responsiveness isto be based on the contents of the bid itself without recourse to extrinsic evidence.

A substantially responsive bid for works refers to :

A substantially responsive bid is one which conforms to all the terms, conditions andspecifications of the bidding documents, without material deviation or reservation. A

material deviation or reservation is one (i) which affects in any substantial way the

scope, quality or performance of the works; (ii) which limits in any substantial way,

inconsistent with the bidding documents, the Employers rights or the bidders

obligations under the contract; or (iii) whose rectification would affect unfairly the

competitive position of other bidders presenting substantially responsive bids.

A substantially responsive bid for goods shall refer to:

Deviations from or objections or reservations to critical provision such as those

concerning performance security (GCC Clause 7), warranty (GCC Clause 15), Force

majeure (GCC Clause 25), Limitation of liability (GCC Clause 29), Applicable laws

(GCC Clause 30), and taxes and duties (GCC Clause 32) will deemed to be a material

deviation.

(The above clauses refers to Standards Bidding Documents of the World Bank )

3.8.4 No bidder should be requested or permitted to alter his bid after the bid has been

opened. In order to evaluate his bid, if any, clarification is required, the same can be called.The request for clarification and the response shall be in writing and no change in the price orsubstance of the bid shall be sought, offered or permitted.3.8.5 No preferential treatment should be given to any bidder or class of bidders either for

price or for condition unless specifically cleared with the Bank and stipulated in the ProjectAgreement. Any procedure under which bids above or below a predetermined assessment of

bid values are automatically disqualified, is not applicable. Bidder should not be required ascondition of award who undertakes responsibility of work not stipulated in specification orotherwise to modify his bid.

3.8.6 The evaluation will exclude and not take into account any allowance for price

adjustment during the period of execution of the contract.


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3.8.7 A bidder should not be required as a condition of award to undertake responsibilitiesfor work not stipulated in the specifications or otherwise to modify his bid

3.9 Rejection of Bids

3.9.1 Regardless of value, if all bids are proposed to be rejected and bids are to be re-invited,the Bank shall be consulted before such action. (Enclosure -2)

3.9.2 (a) In case of civil works, the system of rejecting bids outside a pre-determinedmargin or bracket of prices shall not be used.

(b) In the case of receipt of unreasonably high prices, the bidders shall be requested tofurnish breakdown of unit rates providing justification for higher bid prices. If the

justification, after review, is determined rational, contract should be awarded to the lowestevaluated responsive bidder. If not, these bidders shall be declared as ineligible from

bidding in the re-bid for that contract.

3.9.3 The borrower shall investigate and review causes justifying rejection of bids andcommunicate to Bank. After Banks prior approval to reject all bids and before initiating actionfor reinitiation of bids, fresh bids shall not be invited on the same bidding and contractdocument.

3.10 Single Bids

Where only one bid is received, efforts should be made to ascertain the reasons. If it isdetermined that publicity was not adequate, bid specification or any of the terms wererestrictive or unclear, the bid shall be cancelled and invited afresh after amending thespecifications/ terms.

If however, it is determined that bid specifications are not restrictive and prices quoted arereasonable and bid is technically and commercially responsive, the single bid shall beconsidered for award.

3.11 Other Factors In Bidding Process

3.11.1 In the case of civil works, if the bid of the successful bidder is seriously unbalanced inrelation to DSR/ cost of work as assessed, Performance Security should be increased to a levelsufficient to protect the Employer against financial loss in the event of subsequent default ofthe successful bidder under the contract.

3.11.2 If the contract is being let on a Slice and Package basis, the lowest evaluated bid price(the combined cost of all the lots) will be determined in conjunction with other contracts to beawarded concurrently taking into account any discounts offered by the bidders for the award ofmore than one contract

3.11.3. If extension of bid validity is required, it should be sought from all bidders beforestipulated expiration date (for valid bids only) and not from the lowest alone and the Banknotified accordingly. The extension shall be for the minimum period required to complete theevaluation. In the case of fixed priced contracts, if the award is delayed beyond initial validity

period of the initial bid validity, the contract price will be adjusted by a factor (as alsostipulated in the bid documents) specified in the request for extension. Banks priorconcurrence is required if the extension is larger than 4 weeks bey

Procurement Manual 19-09-2009 Final CD

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Transcript of Procurement Manual 19-09-2009 Final CD