ILLUSTRATIVE CHECK POINTS

FOR

VARIOUS STAGES OF PUBLIC PROCUREMENT

CENTRAL VIGILANCE COMMISSION

CHIEF TECHNICAL EXAMINER'S ORGANISATION

 Preamble

*****

This compendium lists illustrative check-points in public procurement for

the purpose of ensuring fairness, equity and transparency. These check lists are
illustrative. There could be certain specific cases, which may involve other areas
requiring more focused attention. Such areas need to be determined on case to case
basis.

The compendium is intended to serve as a guide to both executives dealing

with procurement as well as vigilance officials.

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1.0 WorkslPurchase Manual

1.1 Cardinal principle of public procurement is to procure the material/services/works of the

specified quality, at the most competitive prices and, in a fair, just and transparent manner. To
achieve this end, it is essential to have uniform and well documented policy guidelines in the
organization, so that this vital activity is executed in a well-coordinated manner with least time
and cost overruns. In some organizations, Procurement Manual is either not in place or has not
been updated for years together, wh ich renders the system of procurement ad-hoc and arbitrary.

A codified Procurement Manual containing the detailed procurement procedures and

guidelines needs to be prepared by the organizations so that there is systematic and uniform
approach in the decision-making. Delegation of power and commensurate accountability at
various levels of decision-making should be essential feature of the Procurement Manual. An
integrated procurement policy in the form of Procurement Manual helps the Organisations in
circumventing the possibility of corruption and would also ensure smoother and faster decision-
making.

1.2 Following check-points are suggested:

I. Whether procurement (work/purchase/services) manual are in place. If yes, whether
updated regularly or not! When were these updated last time?
11. Whether the provision in the work/purchase/services manual are consistent with CVC
guidelines, General Financial Rule (GFR) and Cannons of public procurement?
111. Whether the provisions in work/purchase/services manual cover the entire gamut of
procurement activities of the organization?
IV. Whether the procurement/contract/works manuals are uploaded on intranet/internet?
v. Whether officials concerned are conversant with procurement manual or not?

2.0 Scope of Work

2.1 It is important for any scheme that the scope of work is properly defined. A well defined
scope of work giving an overview of the proposed procurement needs to be put up to the

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 Competent Authority at the time of seeking approval/sanction. The objective of the procurement
f needs to be clearly brought out in the scope.
3.0 Administrative ~p'proval & Expenditure Sanction (AA & ES)
" .
3.1 Administrative Approval & Expenditure+Sanction is an important component of
procurement process. This provides an opportunity to the Competent Authority to have a
.... - --. - --
. .. ....
comprehensive-overview of the project. If the scheme is approved by the Competent Authority,
suitable provision for expenditure to be incurred on the project is also to be made at this stage.
There are situations, where projects/scheme is sanctioned by the authority, who is not competent.
The importance of 'this aspect in public procurement can be gauged from the facts of a case,
wherein the Competent Authority that was vested with the power to sanction an original
scheme/project of Rs. 10 crores only had sanctioned the project of more than Rs. 300 crores.

3.2 Following check-points are suggested:

I. Whether 'Feasibility Study' has been done before formulating the project?
11. Whether, proposal for A/A&E/S has been prepared after considering aspect of
mandatory clearances such as Environmental, Land Use etc.?
Ill. Whether AlA&E/S is based on proper estimate?
IV. Whether administrative approval and expenditure sanction has been accorded by the
Competent Authority?
v. Whether the authority, which accorded the administrative approval and expenditure
sanction is competent to do so or not as per the delegation of power?
VI. Whether necessary budget provision has been made for the instant project or not?
VII. Whether scope of work in the instant contract matches with corresponding provision
in the A/A & E/S?
Vlll. Whether there is any excess expenditure over the corresponding sanctioned amount?
IX. Whether in case of excess expenditure or change in scope, approval of the Competent
Authority has been taken?

4.0 Consultancy
4.1 Earlier public organizations were undertaking planning and supervisory activities in-
house. Now-a-days, in the era of large-scale infrastructure development, the in-house resources

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available with public organizations are gradually being found to be inadequate. Therefore, there
has been substantial outsourcing of services such as Architectural services, Preparation of DPR,
Project Management Consultancy, and Quality Assurance etc. The Commission has issued
instructions regarding appointment of Consultants vide circular No. 3L PRCl DT.12.11.1982
and the same were reiterated vide circular No. OFFI-CTE-1 Dt. 25.11.2002. Gist of the above
circulars is given below-

The consultant should be appointed in a transparent and competitive manner for need
based and specialized jobs. The agreement should contain adequate provisions for
penalizing the defaulting consultant keeping in view the fact that a consultant's role is
only advisory and recommendatory. Consultant's fee should be based on some fixed
value of the contract.

4.2 Commission in supersession of its earlier circular [No. NO.98IDSP/3 dt. 24.12.2004] has
issued detailed instruction on the possible 'Conflict of Interest' in appointment of Consultants
and 'Professional Liability' of the Consultants, vide circular No. 08106111 dated 24th June, 2011.

4.3 Following check-points are suggested:

I. Whether guidelines for appointment of consultants are in place in the organization?
11. Whether the guidelines are updated regularly or not and when were these last
updated?
Ill. Whether the guidelines for appointment of consultants are covering various aspects of
the consultancy contracts such as provision of 'Professional Liability', upper sealing
of consultancy fee, work performance linked payment, panel clauses for frequent
change of staff, panel clauses for deficiency in services, clauses to deal with
professional misconduct, panel clauses to deal with delay in services etc.?
IV. Whether the qualifying requirement fixed for the selection of the consultant IS

commensurate with the importance and size of the project?

v. Whether the qualifying requirement is unambiguous and also fixed before inviting the
offers for the consultancy work?

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 VI. Whether wide and adequate publicity including web-publicity has been given for
inviting the offers for the consultancy work?
VII. in case of limited tender enquiry, whether the panel has been prepared in a fair and
transparent manner or not! Whether this panel is being up updated regularly or not?
VIII. Whether the bides) are in conformity with the terms of the tender document?
IX. Whether the evaluation of the bids is done as per the notified qualifying criteria and
all bidders are treated at par?
x. Whether all the issues relating to the services tax, professional tax travell ing
allowances etc. are taken into account at the time of bid evaluation?
XI. Whether during performance of the consultancy contract, the contract conditions are
being complied with?
XII. Whether the quality of project management by the Project Management Consultant is
up to the mark?

S.O Detailed Project Report (DPR)lDetailed Estimate

5.1 Successful contract performance depends on the quality of Detailed Project Report
(DPR). If, DPR is prepared on ad-hoc basis not based on site conditions, there is likelihood of
delays and deviations resulting in time and cost overrun. It is imperative for trouble free
execution of the contract that there is consistency among schedule of items, drawings and
specifications. Any such ambiguity and inconsistency adds to time and cost overrun of the
project besides leading to legal complications. Poor DPR leaves opportunity for the contractor to
exploit the situation and gain profits out of am bigu ity in the contract.

Designing of the products/structures of a Project is one of the most important activities in

the project formulation. It is important that structures are designed using the latest codal
provisions and latest engineering practices.

S.2 Following check-points are suggested:

I. Whether detailed site investigation has been carried out before finalizing the
items/materials and their corresponding quantities to be used in the project?
11. Whether proper specification suiting to the site conditions have been selected or not?

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 111. Whether all the items required for successful completion of the project has been taken
into account?
IV. Whether there is consistency among description of items in 'schedule of items' / bill
of quantities, drawings and specifications?
v. Whether rates supported with proper documents (genuine market rate quotations or
standard schedule of rate) have been considered in the preparation of the estimate?
VI. Whether detailed analysis of rate has been carried out before arriving at the rate of a
particular item?
VII. Whether DPR has been reviewed as a whole to assess its conformity with local
bylaws, Archaeological Survey of India guidelines, environmental norms, to other
mandatory regulations or otherwise by an independent agency or in-house?
VIII. Whether the structural design has been proof checked by an independent agency or
in-house?

6.0 Design and Drawings

6.1 Designing of products/structures/service modules is an important aspect of any
procurement. It is important that various elements of the project are scientifically designed using
the latest practices and should be economically efficient. Design should suit to the prevailing
site conditions. Similarly drawings should be prepared indicating all necessary details leaving no
room for ambiguity.

6.2 Following check-points are suggested:

I. Whether proper design has been carried out considering the relevant parameters
prevailing at site?
11. Whether design has been proof checked?
111. Whether any deficiency is observed in the design?
IV. Whether any review of the design has been done! If so, reasons for the same?
v. Whether 'good for construction' drawings contain all necessary elements?

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7.0 Tender Document
The tender after acceptance becomes 'the contract' - a legal document. An ambiguous agreement

leads to poor contract performance and litigations. It also gives an opportunity to a contractor to
make profit out of ambiguous conditions. It has been observed that often the tender document is

prepared in a hurried manner without checking for consistency among Schedule of Items,

Drawings, Specifications and Contract Conditions etc. This can happen due to different parts of

the tender document like Schedule of Quantities, Specifications, Drawings and General
Conditions etc. being prepared by different set of people without correlating them. Sometimes

they are copied from old tender cases without giving a thought to the applicability of the

conditions to the present work.

7.2 Following check-points are suggested:

I. Whether complete tender document containing General/Special Conditions of

Contract, specifications, Bill of Quantities, all Addendums etc. is approved by the

Competent Authority?
11. Whether standard approved tender document has been used? If not, whether the

tender document would be legally sustainable?

Ill. Whether all the prevailing guidelines of Govt.lCVC organization have been made part

of the tender document?

IV. Whether relevant modality to deal with any ambiguity in the bid has been provided in
the tender document?

v. Whether all the documents/drawings stated to have been attached with the tender
documents have actually been attached or not?
VI. Whether proper place of tender receipt has been notified in the NIT or not?

vu. Whether the provision of additional bank guarantees or other securities have been

made in case of bid being unbalanced or front-loaded?

VIII. Bank Guarantees from Nationalised Banks only should be accepted. Under no
•
circumstances bank guarantees from Co-operative Banks should be accepted?

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8.0 Pre-gualification r

8.1 The success of a project largely depends n the capability of the contractor/vendor. Pre-

qualification is a process to select compet~~t contractors having technical and financial

capabili~y. com.mens.urate with the req~i~ement\ of the. parti.cular procurement (work/supply of

goods/hiring of services). The pre-reqursites of rte-qualIficatIOn process are:
+
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-Transparency
-Fairness
-Maintenance of fair corn petition
.
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8.2 The Commission had issued guidelines vide circular No12-02-1-CTE-6 dated:
12.12.2002 and 07.05.2004 advising the organizations to frame the pre-qualification criteria in
such a way that it is neither too stringent nor too-lax
, to achieve the purpose of fair competition.

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8.3 During intensive examinations of the works of the organizations dealing with the power
projects, following deficiencies were observed: •,

• Stringent PQ Criteria resulting in poor c~petition.

• Unduly restrictive criteria, creating entry.barrier for potential bidders.

• Evaluation criteria not notified to the bidiers, making the PQ process non-transparent.

• PQ Criteria relaxed during evaluation, thus creating entry barrier to the other potential
bidders fulfilling the relaxed criteria.

• Credentials of the bidders not matched with the notified criteria.

• Credentials of the bidders not verified.

8.4 Following check-points are suggested:

i) Whether there are proper guidelines on pre-qualification of contractors/suppliers

in the procurement manual of the organization?
ii) Whether pre-qualification criteria for the instant procurement has been framed

objectively commensurate with importance and size of the project/procurement?

iii) Whether the pre-qualification criteria was frozen before inviting pre-qualification
bids?

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 iv) Whether the pre-qualification criteria has been approved by the Competent

Authority as per the provision in the procurement manual ofthe organization?

v) Whether there is any deliberate attempt to make the pre-qualification criteria

suiting to particular bidder(s)?

9.0 Inviting & Opening of Tenders

9.1 The award of Public Contract through open tender is to ensure - transparency in public
procurement, to maximize economy and efficiency in public procurement, to promote healthy

competition among tenderers, to provide for fair and equal treatment to all the tenderers and to

eliminate irregularities, interference and corrupt practices by authorities concerned. This is also

required by the Article 14 of the Constitution of India.

9.2 Normally three modes of tendering are adopted. Namely:

• Open Tenders
• Limited Tenders

• Single TenderINomination Basis

In an open tender, bids are invited giving wide and adequate publicity. This is the most
preferred mode of tendering.

In the case of small value works, urgent works and in case only a few bidders are

available in the market, limited tenders from such bidders who have been empanelled are invited.
Incase of Limited Tenders the empanelment should be done in a transparent way and updated
peri od icall y .

Award of contracts on nomination basis, which is also called a single tender is to be

resorted to only under exceptional circumstances such as natural calamities and emergencies or

there were no bids to repeated tenders or where only one supplier has been licensed ( proprietary
item) in respect of goods sought to be procured.

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 9.3 In a judgment of the Hon'ble Supreme Court [Meerut Nagar Nigam, Meerut Vs AI
• Faheem Meat Exports Pvt. Ltd.] it has been emphasized that all the public tenders should be in
an open and transparent manner with adequate publicity. Consequent to this judgment, the
Commission has issued Office Order No. 23/7/07 dated 05.07.2007 laying down the
circumstances where award through nomination is admissible.

9.4 The Commission vide its Circular No. 06-03-02-CTE-34 dt. 20.10.2003 and Circular No.
15/5/06 issued vide letter no. 005/CRD119 dt. 9th May 2006 has emphasized upon open tendering
as the most preferred mode of tendering and insisted on transparency in the preparation of panel
in case of Iimited tenders.

9.5 Widest possible publicity is essential for greater transparency in open tenders. In addition
to the existing rules and practices regarding publicity, the Commission vide their circular No.
98/0RDI1 dt.18.12.2003 has instructed for up loading the Notice Inviting Tender and also tender
documents in a down loadable form on the web site. The web site publicity is to be given even
in the case of limited tenders.

9.6 In the various booklets issued by the CTE Organization of the Commission, the need to
maintain transparency in receipt and opening of tenders has been emphasized and it has been
suggested therein that suitable arrangements for receipt of sealed tenders at the scheduled date
and time through conspicuously located tender boxes needs to be ensured. The Commission vide
their Circular No. 05-04-1-CTE-8 dt. 8.6.2004 has further instructed that in case of bulky tender
documents the provision for submission of bids to designated officials by hand should be made
in the tender document itself.

To maintain transparency in the opening of tenders, the Commission in its circular dated
8.6.04 has instructed to open the bids in the presence of bidders.

9.7 Following check-points are suggested:

I. Whether proper publicity has been given to the tender as per the guidelines of the
organization?

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 11. Whether the guidelines of the organization for publicity of the tender are adequate?
Ill. Whether NIT has been posted on the organization's website?
IV. Whether place of tender receipt as notified in the NIT is conspicuous?
v. Whether the committee to open the tenders has been duly notified by the Competent
Authority?
VI. Whether the tenders are opened In presence of the bidders or their authorized
representatives? .
VII. Whether cutting/overwriting linsertions are accounted for on each page of the price
bid?
Vlll. Whether the members of the Tender Opening Committee have signed on each page of
the price bid?
10.0 Tender Evaluation and Award of Work
10.1 This is the most sensitive area susceptible to corruption. Corruption is inversely
proportional to transparency and fairness. To ensure that evaluation is done in most transparent,
fair & open manner, following points should be taken care of:
• Evaluation of tenders needs to be done as per pre-notified criteria.
• Timely decision within validity period.
• Complying with commission's circular regarding negotiations.
• Ensuring that conditions 1 specifications are not relaxed in favour of contractor to whom
the work is being awarded.
• Ensuring that Ll is not ignored on flimsy grounds.
• Compliance with the purchase preference policy of the govt.
• Ensuring that work order 1 supply order is placed within justified rates.

10.2 CVC guidelines in this regard have been issued vide following circulars:
• Circular No. 8(1)(H)/98(l) dated 18.] 1.98,
• Circular No. 98/0RDIl dated 24.8.2000 1 15.3.99,
• CVC'S Office Order No. 13/3/05 (005NGLl4) dated] 6.3.2005,
• Circular No. 06-03-02-CTE-34 dated 20.10.03,
• Circular No. 0041DSP111-6594 dated 24-2-2005
• Circular No. 005/CRD/012 dated3.03.2007

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10.3 Following check-points are suggested:
1. Whether the Tender Evaluation Committee has been duly notified by the
Competent Authority?
11. Whether members of the Tender Evaluation Committee are competent enough to
deal with the subject matter?
Ill. Whether the bids are evaluated as per the terms of the tender document or not?
IV. Whether the tender evaluation committee has commented upon the aspect of the
bid being unbalanced or front-loaded?
v. Whether ambiguity clause has been properly applied to deal with any
inconsistency in the bid during evaluation?
VI. Whether there has been any inordinate delay in processing the tender for award of
the work?

11.0 Contract Agreement

11.1 During course of technical examination of various contracts by CTE's Organisation, it
was observed that officials, who are otherwise expert in their own technical domain, do not go
through the complete contract document. During performance of the contract, their main focus
could be on BOQ/specifications for various items. In other words, at times, the officials are more
concerned with the technical aspects of the contract and as such, other important contract
provisions, which are also essential for smooth operation of contract, get ignored. The
contractors/vendors tend to take advantage of the ignorance of the officials for their benefit.
Many a times, major financial irregularities occur during the performance of the contract because
of the officials not being thorough with the contract conditions/provisions. Besides quality,
timely completion of the work is also the essence of the contract. While examining the
correspondence files of some power projects, it was observed that many projects get unduly
delayed due to contractor's fault such as non deployment of adequate plant & machinery,
technical staff, material, labour etc. Officials have been found wanting in their action against the
contractors/suppliers. Such actions In many cases lead to recoveries from the
contractors/suppliers. In some projects, it was further observed that 'Extension of Time' was
granted without claiming compensation i.e. 'Liquidated Damages', ignoring correspondence that
could pin the delay to the account of contractor.

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11.2 Following check-points are suggested:
I. Whether proper agreement between the organization and the contractor / supplier has
been entered into within the prescribed period or not?
11. Whether the contract agreement containing all the relevant papers has been properly
sealed or not?
Ill. Whether irrelevant documents/papers have been made part of the agreement?
IV. Whether various contract provisions such as labour laws, insurances, guarantees etc.
are being compiled by the contractor or not?
v. Whether action has been taken against the contractor for non-compliance of the
contract conditions?
VI. Whether the payment is being made to the contractor strictly as per the contract?
VII. Whether any overpayment/inadmissible payment?
VIII. Whether Bank Guarantees submitted by the contractor/supplier have been duly
verified for their genuineness from the issuing bank?
IX. Whether action has been taken/proposed against the contractor/supplier for delay?
x. Whether the work is being carried out as per the detailed procedure/protocol for
quality of the material/product provided in the contract and in case of any deviation,
whether approval of Competent Authority highlighting the financial implication has
been obtained?
XI. In case of the contractor being a Joint Venture of two or more firms, whether
representatives are being shared by each of the partner as per their disclosure at the
time of bidding?
XII. Whether sub-contracting of the work is allowed in the contract and if so to what
extent? Proposal for sub-contracting should be scrutinised scrupulously to assess the
competence of the sub-contractor. Indiscriminate sub-contracting that too the
inexperienced/incompetent sub-contractors may lead to serious quality compromises
besides delay in execution of the work?

12.0 Payment to the Contractors

12.1 Payment to the contractors/suppliers should be made strictly as per the terms of contract.
Any payment outside the contact agreement should have proper & specific approval of the

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 Competent Authority highlighting the need/necessity for the same as well as rule position.
, Various types of advances such as Mobilization Advance, Plant & Machinery Advance, Advance
on Materials (Secured Advance) etc. may have been provided in the contracts, which need to be
paid and recovered as per the stipulation in the contract agreement. The basic purpose of
Mobilization advance is to extend financial assistance within the terms of contract to the
contractor to mobilize the man and material resources for timely and smooth take off of the
project or procurement of equipment material or other services contract. There could be
possibility of misuse of Mobilization Advance, especially the interest free advance, either due to
absence of necessary safeguards or due to non-implementation of these safeguards provided in
the contracts. The Mobilization Advance so paid could be misused by the contractors either in
building their own capital or for the purpose other than the one for which it was disbursed,
rendering to be counter-productive. In view of the susceptibility of its misuse, Commission vide
its Circular No. NU/POLl19 dated 8th December 1997, banned the provision of interest free
Mobilization. However, in view of representations from various organization, Commission has
reviewed the earlier instructions and allowed the organizations to stipulate interest free advance
with elaborate mechanism for safeguards against its misuse vide circular No. 10/4/07 issued vide
letter No.4CC-1-CTE-2 dated 10.04.2007. More importantly the BGs taken in lieu of
Mobilization Advance need to be properly examined within respect to the acceptable format and
any condition deterrent to the Govt.'s interest should be got withdrawn before acceptance besides
verifying the genuineness of the Bank Guarantees from the bankers. Timely action for
revalidation/ encashment of BGs also needs to be taken so as to protect the Govt. interest.
Similarly, Plant & Machinery Advance should be allowed only for the purchase of Plant &
Machinery for the bona-fide use in the project and it should be allowed only on the production of
genuine documents.

Tax evasion in the procurement contracts could be another area of concern; therefore, it is
necessary that tax liability of the contractors/suppliers is examined properly with reference to as
per the extant instructions of the Government.

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12.2 Following check-points are suggested:
Whether the payment is made as per the terms of the contract?
11. Whether there is any possibility of duplicate payment being made to the
contractor/supplier?
Ill. Whether any over payment is being made to the contractor/supplier?
IV. Whether the rates for extra/substituted items have been derived as per the provision in the
contract agreement/Procurement Manual?
V. Whether the payment for extra/substituted items have been made after due approval of
the Competent Authority?
VI. Whether advances are paid to the contractors/suppliers for the amount specified in the
contract agreement?
VII. Whether recovery of advances is being made as per the terms of the contract agreement?
VIII. Whether recovery of mandatory taxes and duties is being done as per the extant
instructions of the Government and as per the terms of the contract agreement?
IX. Whether reimbursement of service tax, excise duty etc. is being done after obtaining the
actual proof of depositing the same with authorities concerned?
x. Some of the contracts provide escalation clause, with detailed formula in order to
compensate the contractors for increase in the material cost during the contract period.
Whether the formula for escalation is applied correctly or not?
Xl. Whether hire charges of Plant and Machineries are being recovered from the contractor
as per the specified rate?

13.0 Site Records

13.1 Records connected with the execution of the work should be maintained in a proper
manner. The registers/files, wherein important data such as record of the mandatory test,
record of hindrances, record of receipt and supply of materials, record of issue of
drawings/design etc. are kept should be properly bound and page numbered. These
records should be maintained under the signature of designated senior officials. This will
guard against the possibility of manipulation/tempering of these records at any stage.

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 13.2 Following check-points are suggested:
f I. Whether the registers are properly bound and having machine numbered pages?
11. Whether the registers to keep record of important data like mandatory test, hindrances etc
are being issued under the signature of designated senior officer?
HI. Whether these records are being maintained properly with signatures and attestation of
the designated officers?
IV. Whether any tampering/manipulation is noticed in these records?

14.0 Site Inspection

14.1 Site inspection is basically to assess the quality of work being carried out. All the stages
discussed previously are the means, whereas the quality/quantity is the end product. One of the
cardinal principles of public procurement is to procure works or goods or services of specified
quality. For this purpose, detailed quality standards are stipulated in the contracts. Any
compromise in the quality will not only defeat the very purpose of stipulating such elaborate
quality standards, but also cause irreversible loss to public exchequer.

To maintain the quality of the work, testing of the material at various stages of the work
is required. The contract documents stipulate mandatory tests to be carried out for ensuring that
the materials represented by the sample conform to desired quality standards. It has been
observed that at times, aspect of testing at specified frequency & interval is ignored. This not
only defeats the objective of mandatory testing of input materials/products, but also gives
opportunity to the contractors/manufactures/vendors to supply sub-standard materials and save
on the testing charges.

It needs to be examined whether the work is being carried out with the specified quality
standards? Site inspection should highlight the specific quality compromises w.r.t. the bench-
mark i.e. specified standards/specifications rather than general observation.

15.0 Leveraging information technology

15.1 The Government is promoting E-Governance to improve transparency In government
functioning. As regards public procurement, the modem IT tools can be used in enhancing

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 transparency in the form of E-Tendering, E-Procurements, E-Payments & uploading of post
• tender details on the website. CVC has issued instructions in this regard from time to time.

15.2 Following check-points are suggested:

I. Whether e-payment is being made to the contractors/suppliers III general III the
organization?
11. Whether e-payment is being made in the instant contract?
Ill. If the e-payment is not being made then reasons for the same?
IV. Whether CVC's instructions on e-tendering/e-auctions/reverse-auctions are being
complied with?
v. Whether post-tender details are being up\oaded on the organization's website?

16.0 Integrity Pact

16.1 As part of its endeavour to promote transparency in public procurement, the Commission
has issued instructions for putting in place the mechanism of Integrity Pact. Among the
important provisions in the instructions of the Commission are mandatory provision of Integrity
Pact in the procurement contracts and appointment ofIndependent Monitors in the organisation.

16.2 Following check-points are suggested:

I. Whether the provision of Integrity Pact as approved by the Management has correctly
been incorporated in the tender documents/contracts?

********

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TeJegraphicAddress :
"SATARKTA: New Delhi
E-Mail Address
[email protected] ~~

Website f.t:;~q ~ ~
www.cvc.ruc.m
CE TRAL VIGILA CE COMMISSION ~ 'fCR, ;jft.tft.\3ll. itil¥q~<ffi,
EPABX ~-1:{, ~.\:f{.1:{., ~ ~-110023
2465 100 I - 07 Satarkta Bhawan, G.P.O. Complex,
Block A, INA, New Delhi 110023
~/Fax: 24616286
. NO.011NGU014
~./No .

~ / DateJ.~.t.~.. :..~.~~~~.'!'.'.?~:.~
Circular No.01/02/11

Sub: Transparency in Tendering System

There have been instances where the equipment/plant to be procured is of

complex nature and the procuring organization may not possess the full knowledge
of the various technical solutions available in the market to meet the desired
objectives of a transparent procurement that ensures value for money spent
simultaneously ensuring upqradation of technology & capacity building.

2. The Commission advises that in such procurement cases where technical

specifications need to be iterated more than once, it would be prudent to invite
expression of interest and proceed to finalise specifications based on technical
discussions/presentations with the experienced manufacturers/suppliers in a
transparent manner. In such cases, two stage tendering process may be useful
and be preferred. During the first stage of tendering, acceptable technical solutions
can be evaluated after calling for the Expression of Interest (EOI) from the, leading
experienced and knowledgeable manufacturers/suppliers in the field of the
proposed procurement. The broad objectives, constraints etc. could be published
while calling for EOI. On receipt of the Expressions of Interest, technical
discussions/presentations may be held with the short-listed
manufacturers/suppliers, who are prima facie considered technically and financially
capable of supplying the material or executing the proposed work. During these
technicaJ discussions stage the procurement agency may also add those other
stake holders in the discussions who could add value to the decision making on
the various technical aspects and evaluation criteria. Based on the
discussions/presentations so held, one or more acceptable technical solutions
could be decided upon laying down detailed technical specifications for each
acceptable technical solution, quality bench marks, warranty requirements,
delivery milestones etc., in a manner that is consistent with the objectives of the
transparent procurement. At the same time care should be taken to make the
specifications generic in nature so as to provide equitable opportunities to the
prospective bidders. Proper record of discussions/presentations and the process of
decision making should be kept.
 NO.Ol/02/11
-2-

3. Once the technical specifications and evaluation criteria are finalized, the
second stage of tendering could consist of calling for techno commercial bids as
per the usual tendering system under single bid or two bid system, as per the
requirement of each case. Final selection at this stage would depend upon the
quoted financial bids and the evaluation matrix decided upon.

4. Commission desires that organizations formulate specific guidelines and

circulate the same to all concerned before going ahead with such procurements.

(An~al)
Chief Technical Examiner

To

All Secretaries of Ministries/Departments

All CEOs/Heads of Organisations
All Chief Vigilance Officers
TelegraphicAddre s : 00 / RD/O] 2
•• ATARKT: w Delhi
E-Mail ddr
cenv [email protected]
We ne
c T
EP BX ~f(1c60' ~. ~.tfi 3ft. q;1~~Cftf,

_4 51001 - 07 ~-t:t, ~.~.t:t., ~ ~-"0023

atarkta hawan, a.p.o. mplex,
~/F :~461626 Block A, I ,ew D llu 1100_3

~/D

(i) The Secretaries of all Ministries/Departments of Government of India

(ii) The Chief Secretaries to All Union Territories
(Hi) The Comptroller & Auditor General of India
(iv) The Chairman, Union Public Service Commission
(v) The Chief Executives of all PSEs/Public Sector Banks/Insurance Companies/Autonomous
Organisations/Societies.
(vi) The Chief Vigilance Officers in the Ministries/Departments/PSEs/Public Sector Banks/Insurance
Companies/Autonomous Organisations/Societies
(vii) President's, SecretariatjVice-President's secretartat/tok Sabha Secretariat/Rajya Sabha
Secretariat/PMO

CIRCULAR No.Ol/Ol/IO

Attention is invited to the Commission's circular No. 4/3/07 dated 3.3.07 on the issue of "Tendering Process-
Negotiations with U",

post tend r n gonanon could oft n be a

In the said circular it has, among other things, been stated "As
ur e of . rrupti n, it i dire ted that there h uld b no po t tend r nec tiati ns \\ ith L L e: cept in
c rtain cepti nal ituati n ". It ha come t mrni ion' n tic that thi ha be n int rrpr led to
m an that th r i a ban on post tend r n g ti ti n w ith L-I nlv and there uld be pot l .nd r
n g tiation with th r than L I i.c. L_. L" t. I hi i not rre t.

It is larified t all
n med that - ther h uld n rmallv be n t tender n • tiali n.. If at It
n g tiati n are warrant d und r cxcepti nal cir urn tan • th n it n be \ ith L I L west 1 nd rer)
only if th tend r pertain t the ward of work uppl' rder et. \\ her the crnmcnt r the
\' rnment Olpan)- ha. t make payment. However. if th tender is f r 1 f mal ri I b~ the
J \" rnment or rh \1. mpany, the p st tender n g tiati n are n t to h Id c. c pt \\ ith HI i..
Hi rh . t tend rer) j f required.

2. 11other in.tru tion. ill ntain din th ir ular of .. 20 7 remain un hang d.

. Th e in tru ti \\ ith the appr \'31 f th ornrru ion and may pi a e be n t d f r immediate
mpli n .
I) ..,,~l ,,~ 2
(V. Ramachandran)
Chief Technical Exarmner
 No.005/CRD/19
Government of India
Central Vigilance Commission
.*.**
Satarkta Bhawan, Block 'A',
GPO Complex, INA,
New Delhi- 110 023
Dated the 5th July 2007

Office Order No.23n107

Subject:- Transparency in Works/Purchase/Consultancy contracts awarded

on nomination basis.

Reference is invited to the Commission's circular No.15/5/06 (issued

vide letter No.005/CRD/19 dated 9.5.2006), wherein the need for award of contracts
in a transparent and open manner has been emphasized.

2. A perusal of the queries and references pertaining to this circular,

received from various organizations, indicates that several of them believe that mere
post-facto approval of the Board is sufficient to award a contracts on nomination
basis rather than the inevitability of the situation, as emphasized in the circular.

3. It is needless to state that tenderina Drocess or public auction is a

basic requirements for the award of contract by any Government agency as any
other method, especially award of contract on nomination basis, would amount to a
breach of Article 14 of the Constitution guaranteeing right to equality, which implies
right to equality to all interested parties.

4. A relevant extract from the recent Supreme Court of India judgement in

the case of Nagar Nigam, Meerut Vs A1 Faheem Meat Export Pvt. Ltd. [arising out of
SLP(civi/) No.10174 of 2006] is reproduced below to reinforce this point.

'The law is well-settled that contracts by the State, its corporations,

instrumentalities and agencies must be normally granted through public
auction/public tender by inviting tenders from eligible persons and the
notifications of the public-auction or inviting tenders should be
advertised in well known dailies having wide circulation in the locality
with all relevant details such as date, time and place of auction, subject
matter of auction, technical specifications, estimated cost, earnest
money deposit, etc. The award of Government contracts through
public-auction/public tender is to ensure transparency in the public
procurement, to maximize economy and efficiency in Government
procurement, to promote healthy competition among the tenderers, to
provide for fair and equitable treatment of all tenderers, and to
eliminate irregularities, interference and corrupt practices by the
authorities concerned. This is required by Article 14 of the Constitution.
However, in rare and exceptional cases, for instance, during natural
 calamities and emergencies declared by the Government; where the
procurement is possible from a single source only; where the supplier
or contractor has exclusive rights in respect of the goods or services
and no reasonable alternative or substitute exists; where the auction
was held on several dates but there were no bidders or the bids offered
were too low, etc., this normal rule may be departed from and such
contracts may be awarded through 'private negotiations'."

(Copy of the full judgement is available on the web-site of the Hon'ble

Supreme Court of India, i.e., www.supremecourtofindia.nic.in )

5. The Commission advises all CVOs to formally apprise their respective

Boards/managements of the above observations as well as the full judgement of the
Hon'ble Supreme Court for necessary observance. A confirmation of the action taken
in this regard may be reflected in the CVO's monthly report.

6. Further, all nomination/single tender contracts be posted on the web-

site ex post-facto.

~.
(Rajiv Verma)
Under Secretary

To

All Chief Vigilance Officers

Telegraphi Addr ss .
.•, ATARKTA: c Delhi fT I 0
o. 091 • 002
1:-M311 Address 'qJ((f tt '{Cbi (
cenvi il@nic in ~;1i}lt ~ ~
Web It GOVEI E TO I DIA
\ ww.cvc.ruc.m eE TRAL VIGIL CE COMMI 10
EPAB fI cl etal "1cR. \ift tfi.3ft q;1P04 ~ <Ri ,
14651001 - 07 ~-({. ~JffJ{., ~ ~-110023
Satarkta Bhawan, a.p.a. Complex
~/Fa 246 6286 Bloc At lNA. ew elhi 110023

~ / Datea5.ttl Apnl. 20.10 .

Circular 0 8/04/2010

'ub.ieet: - lmplementati It of -teuderin olu i 0 - Ii t.

G rdetines were prescribed In his office OM of even number, dated 17 09 2009.

on the above-cited subject adv sing organisations to ta e due care to see that
effec ive security provisrons are made in the system to prevent any misuse It
has been observed dunng security audit carried by CTEO that a-procurement
soiu ons being sed by some of the organisations lack security consideratrons
as envisaged In the Com rssion's guidelines da ed 17 09 2009 Some of the
shortco Ings I deficiencies are 0 repetitive nature

A check Itst to achieve security considerations in e-Procurement solutions IS

enclosed or nforrnanon Organisa 0 s concerned may follow the same while
irnplernen Ing e-tendennq solutions to address the security related concerns.

(\/ Ramachandran)
Chief Techrucal Examiner

All CVOs of Mtnlstnes/Departments/PSUs/Banks/lnsurance Cornpanres/

Autonomous Orqarusatronszsocetres/u'rs
 1. Whether the application IS secure from ma Ing any emporary Yes o
distortion In th electronic posit 9 0 tender notice jus to
misle d certa n enders?
2. If yes at 2 above, t en whet r any automatic systems alert IS Ye o
provided In the orm of dally exception report he application
H t ISregard?

Wether apphcatio ensures that the tender documents Issued Yes

to I down loaded by bidders are complete in shape as per the
approved tender documents including ail Its corngendum?
4. Is there any check available in the application to detect & alert I Yes
about the miSSingpages to the tenderer If any?
Whelherappltca lonensures tha ai/the corngendum Issued by Yes No
the Competen Authonty are being fully communicated In
proper ashto to all bidders Including hose flho had already
purchased I downloaded the bid documents well ahead of the
due date & before uploadtng the cornqendum?
(t. Whether sys em is safe from- sendlng-""7d-ls-c~nm-tn-a-:-to-ry--:-y-:-e-S-+-:-N:-O----11
commurncanon to different bidders about the same e-tendenng
proc ss? _._ I
Whether e procurement solution has also been customised to Ye
proces all typ of tenders VIZ Limited I Open I Global
No I
Tenders?
Whether onllne Public Tender opemng events feature are Yes No
available an he application? I
!---9-.-; Whe her facilities for evaluation I 10ading-o-:f:-:-bl-:d~s-s-:tr-lc-:tly--:i-n-r.Y-:-e-s-
No
erms of cntena laid down In bid documents are available In the
application?
I . W e her sufficient safeguards have been provided in the Yes No
application 0 deal v I h failed attempt blockmg?
Whe her application ISsafe from submission of fake bids? Yes

t 12.1 Whether encryp Ions of tnds are done at clients end?

--r----
Yes I 0

het ersafety against ampenng and stealing tnforma Ion of Yes

-.----: 0
ubmi ed bid dUring storag be ore Its opening ISensured?
14. Whether application I safe rom Siphoning off and decryptmg No
the clandestme copy 0 a bid encrypted WIth Public key 0
I tender opemnq 0 cer?
15.'Whether application IS safe rom mu ilatlon-'-sabotage or Yes No
o herwlse rendcflng he encrypted bid in the a-tender box I
dUring storage to make It unreadable I Invalid m any orm,
'--_--'-_____ be 0 e opening of t e _bids? ---1. __ __"__
 ether vstem suppo s he feature t at eve hougn if a
pubhsne ten er IS oe ng dele eo fro e app.ica Ion system
does not allow perma nt deiet on of he puohshed ender fro
he Oa aba e?
ether sutticien secunty features are providea In he
application for authentication procedure of the sys em
ad irus a or j e 0 pas ord dIg la sIgna ur . borne nc
I---f-
e c?
20. Whe her audit trails are being captured in the apphcation on Yes No
media no prone to ampenng such as optical WTIeo ce? I
t----;-
21. Whether log shipPing feature IS available where a separate Yes No
dedicated server receives the logs from he apphcatron over a.
veb service In real irne?
Wether tntegnty a 0 non-tampermq is ensured In am atOIng Yes 0

I---~- he server c OC syncbromsauon & time starnpmq?

Whether application generates any exception report I system Yes No
alerts etc 0 I create the resetting of he clock In case the
apphcat 0 for ime stamping I lIIed a h serve level and
time is marupula ed?
I ----------~--~~------~----~--_r~--~~--~
~. W et er apphca 0 ensures that the quotes 0 0 arious Yes
bidders I h thetr name are no being displayed 0 anyone
including 0 the Organl anon dunng carrying out of the e-
reverse auc lonmg process?
ether application IS It for usage complYing 0
requirements of ten er processing VIZ Autnenucity 0 tenderer
non-repudiation and secrecy of information till the actual
r---+..,.openmg 0 enders
26. Whether any comprehensive third party audi [as per statutory Yes
requirement and also as per the requirements of a-tender
processing (compliance to IT Act 2000)) was got conducted
I 0

before irst puttIng It to public use?

W e her application complies With the Commission s Yes 0

_____I GUidelines dated 17 09 2009 on Secunty consrderanon or e-

procurement S stems
 NO.005NGU4
Government of India
Central Vigilance Commission
*****

Satarkta Bhawan, Block 'A',

GPO Complex, INA,
New Delhi- 110 023
Dated the 14th July, 2009

CIRCULAR No. 17/7/09

Subject: Posting of details on award of tenders/contracts on websites.

The Commission vide circulars dated 16.03.2005, 28.07.2005 and

18.04.2007 had directed all organisations to post on their web-sites a summary,
every month, containing details of all the contracts/purchases made above a
threshold value (to be fixed by the organisations) covering atleast 60% of the value
of the transactions every month to start with on a continuous basis. CVOs were
required to monitor the progress and ensure that the requisite details were posted
regularly on respective websites, and also to incorporate compliance status in their
monthly report to the Commission.

2. On a review of the status of implementation by the organisations, it is

observed that some organisations have not adhered to the instructions and
implemented the same. Further, such information being posted on the websites
are not being regularly updated on a continuous basis by certain organisations
/
and, in some cases, the information published is disjointed and not as per the
prescribed format laid down by the Commission. It is also seen that a few
organisations have placed such information on restricted access through
passwords to registered vendors/suppliers etc. which defeats the basic purpose of
increasing transparency in administration.

3. The Commission, therefore, while reiterating its aforementioned

instructions would direct all organisations/departments to strictly adhere and post
summary of details of contracts/purchases awarded so as to cover 75% of the
value of the transactions without any further delay. Any failure on the part of the
organisations on this account would be viewed seriously by the Commission.

4. All Chief Vigilance Officers should reflect the compliance status in their
monthly reports to the Commission after personally verifying the same.

J.

V/
/y"'"

(Shalini Darbari)
Director

To
All Secretaries of Ministries/Departments
All CEOs !Heads of Organisations
All Chief Vigilance Officers
 No. 98/0RDIl
Government of India
Central Vigilance Commission
(CTE's Organization)
Satarkta Bhavan, Block' A'
G.P.O. Complex, LN.A.,
New Delhi- 110 023
Dated the 9th July, 2003

Office Order No. 33/7/03

To

All the Chief Vigilance Officers

Subjects- Short-comings in bid documents.

Sir/Madam,

The Commission has observed that in the award of contracts for goods and
services, the detailed evaluation/exclusion criteria are not being stipulated in the bid
document and at times is decided after the tender opening. This system is prone to
criticism and complaints as it not only leads to a non-transparent and subjective system
of evaluation of tenders but also vitiates the sanctity of the tender system.

2. The Commission would reiterate that whatever pre-qualification,

evaluation/exclusion criteria, etc. which the organization wants to adopt should be made
explicit at the time of inviting tenders so that basic concept of transparency and interests
of equity and fairness are satisfied. The acceptance/rejection of any bid should not be
arbitrary but on justified grounds as per the laid down specifications,
evaluation/exclusion criteria leaving no room for complaints as after all, the bidders
spend a lot of time and energy besides financial cost initially in preparing the bids and,
thereafter, in following up with the organizations for submitting various clarifications
and presentations.

3. This is issued for strict compliance by all concerned.

Yours faithfully,

Sd/-
(Mange Lal)
Deputy Secretary
Telefax No.24651010
 No. 12-02-1-CTE-6
Government of India
Central Vigilance Commission
(CTE's Organisation)
Saiarkata Bhavan,
Block A, GPO Complex,
INA, New Delhi - 110 023.
Dated the 1ih December 2002.
OFFICE MEMORANDUM
Subject: - Prequalification criteria (PO).

The Commission has received complaints regarding discriminatory

prequalification criteria incorporated in the tender documents by various
Deptts./Organisations. It has also been observed during intensive examination of
various works/contracts by CTEO that the prequalification criteria is either not
clearly specified or made very stringent/very lax to restrict/facilitate the entry of
bidders.

2. The prequalification criteria is a yardstick to allow or disallow the firms to

participate in the bids. A vaguely defined PO criteria results in stalling the
process of finalizing the contract or award of the contract in a non-transparent
manner. It has been noticed that organizations, at times pick up the PO criteria
from some similar work executed in the past, without appropriately amending the
different parameters according to the requirements of the present work. Very
often it is seen that only contractors known to the officials of the organization and
to the Architects are placed on the select list. This system gives considerable
scope for malpractices, favouritism and corruption. It is, therefore, necessary to
fix in advance the minimum qualification, experience and number of similar works
of a minimum magnitude Satisfactorily executed in terms of quality and period of
execution.

3. Some of the common irregularities/lapses observed in this regard are

highlighted as under: -

i) For a work with an estimated cost of Rs. 15 crores to be completed in

two years, the criteria for average turnover in the last 5 years was kept
as Rs.15 crores although the amount of work to be executed in one
year was only Rs. 7.5 crores. The above resulted in prequalification of
a single firm.

ii) One organization for purchase of Computer hardware kept the criteria
for financial annual turnover of Rs. 100 crores although the value of
purchase was less than Rs. 10 crores, resulting in disqualification of
reputed computer firms.
Contd ....
 -: 2 :-

iii) In one case of purchase of Computer hardware, the prequalification

criteria stipulated was that the firms should have made profit in the last
two years and should possess ISO Certification. It resulted in
disqualification of reputed vendors including a PSu.

iv) In a work for supply and installation of A. C. Plant, retendering was

resorted to with diluted prequalification criteria without adequate
justification, to favour selection of a particular firm.

v) An organization invited tenders for hiring of D. G. Sets with eligibility of

having 3 years experience in supplying D.G. Sets. The cut off dates
regarding work experience were not clearly indicated. The above
resulted in qualification of firms which had conducted such business for
3 years, some 20 years back. On account of this vague condition,
some firms that were currently not even in the business were also
qualified.

vi) In many cases, "Similar works" is not clearly defined in the tender
documents. In one such case, the supply and installation of A. C.
ducting and the work of installation of false ceiling were combined
together. Such works are normally not executed together as A. C.
ducting work is normally executed as a part of A. C. work while false
ceiling work is a part of civil construction or interior design works.
Therefore, no firm can possibly qualify for such work with experience of
similar work. The above resulted in qualification of A. C. Contractors
without having any experience of false ceiling work although the major
portion of the work constituted false ceiling work.

4. The above list is illustrative and not exhaustive. While framing the
prequalification criteria, the end purpose of doing so should be kept in view. The
purpose of any selection procedure is to attract the participation of reputed and
capable firms with proper track records. The PO conditions should be
exhaustive, yet specific. The factors that may be kept in view while framing the
PO Criteria includes the scope and nature of work, experience of firms in the
same field and financial soundness of firms.

5. The following points must be kept in view while fixing the eligibility criteria:-

Contd ....
 -: 3 :-
A) For Civil/Electrical Works

i) Average Annual financial turnover during the last 3 years, ending 31st
March of the previous financial year, should be at least 30% of the
estimated cost.

ii) Experience of having successfully completed similar works during last

7 years ending last day of month previous to the one in which
applications are invited should be either of the following: -

a. Three similar completed works costing not less than the amount
equal to 40% of the estimated cost.

or

b. Two similar completed works costing not less than the amount
equal to 50% of the estimated cost.

or

c. One similar completed work costing not less than the amount equal
to 80% of the estimated cost.

iii) Definition of "similar work" should be clearly defined.

In addition to above, the criteria regarding satisfactory performance of

works, personnel, establishment, plant, equipment etc. may be incorporated
according to the requirement of the Project.

B) For Store/Purchase Contracts

Prequalification/Post Qualification shall be based entirely upon the

capability and resources of prospective bidders to perform the particular contract
satisfactorily, taking into account their (i) experience and past performance on
similar contracts for last 2 years (ii) capabilities with respect to personnel,
equipment and manufacturing facilities (iii) financial standing through latest
I.T.C.C., Annual report (balance sheet and Profit & Loss Account) of last 3 years.
The quantity, delivery and value requirement shall be kept in view, while fixing
the PQ criteria. No bidder should be denied prequalification/post qualification for
reasons unrelated to its capability and resources to successfully perform the
contract.

Contd ....
 -: 4 :-

6. It is suggested that these instructions may be circulated amongst the

concerned officials of your organization for guidance in fixing prequalification
criteria. These instructions are also available on CVC's website, http://cvc.nic.in.

(MP. Juneja)
Chief Technical Examiner

To

All CVOs of Ministries/Oepartments/PSUs/Banks/lnsurance Companies/

Autonomous Organisations/Societies/UTs.
 No. 12-02-1-CTE-6
Government of India
Central Vigilance Commission
(CTE's Organisation)
Satarkata Bhavan, Block A,
4thFloor, GPO Complex,
INA, New Delhi - 110 023.
Dated: ih May, 2004

OFFICE MEMORANDUM

Subject: - Pre-qualification Criteria (PQ).

Guidelines were prescribed in this office OM of even number dated

17/1212002, on the above-cited subject to ensure that the pre-qualification criteria
specified in the tender document should neither be made very stringent nor very
lax to restrict/facilitate the entry of bidders. It is clarified that the guidelines
issued are illustrative and the organizations may suitably modify these guidelines
for specialized jobs/works, if considered necessary. However, it should be
ensured that the PO criteria are exhaustive, yet specific and there is fair
competition. It should also be ensured that the PO criteria is clearly stipulated in
unambiguous terms in the bid documents.

(M.P. Juneja)
Chief Technical Examiner

To
All CVOs of Ministries/Departments/PSUs/Banks/lnsurance Companies/
Autonomous Organisations/Societies/UTs.
 No.98/0RD/1
Government of India
CENTRAL VIGILANCE COMMISSION
******

Satarkta Bhavan, Block 'A',

G.P.O. Complex, LN.A.,
New Delhi -110 023
Dated the 6th April, 2004

Office Order No. 20/4/04

Sub: Improving Vigilance Administration: Increasing Transparency and

cutting delays bye-payments and e-receipt by Govt. Organisations etc.

The Commission has been receiving complaints about inordinate delays in

making payments to the vendors and other suppliers to the Govt. organisations,
Public Sector Undertakings etc. Similarly complaints are received about delays in
getting refunds from taxation dept. and other departments. Apart from increasing the
cost of procurement, the delays lead to opportunities for corruption. A number of
measures are required to cut down on delays in making payments. One such step is
resorting to mechanism of e-payments and e-receipts wherever such banking I
facilities exist.

In the last few years tremendous progress has been made by the banking
sector in computerization including net-working of branches, making it possible to do
e-banking by making use of facilities like electronic clearing system (E.CS) and
electronic fund transfer (EFT) etc. These facilities are available in most of the- banks
including the State Bank of India as well as in private banks. A large number of
corporates including public sector undertakings are already making e-payments to
vendors and employees instead of making payments by issue of cheques.

The Commission has been receiving complaints that delay is intentionally

caused with ulterior motives in the issue and dispatch of cheques in the accounts
and finance wings of a large number of Govt. Organisations. As the e-payment
facility is already available in the metros as well as practically in all the main urban
centres of the country, in order to curb the above mentioned malpractices, the CVC
in the exercise of powers conferred on it under Section 8(1) (h) issues following
instructions for compliance by all govt. departments, PSUs, banks and other
agencies over which the Commission has jurisdiction.

1. The payment to all suppliers/vendors, refunds of various nature, and other

payments which the organisations routinely make shall be made through electroli\ic,
payment mechanism at all centres where such facilities are available in the banks,

2. Salary and other payments to the employees of the concerned organisations

at such centres shall also be made through electronic clearing system (ECS)
wherever such facilities exist.
 As the organisations will have to collect bank account numbers from the
vendor, suppliers, employees and others who have interface of this nature with the
Govt. organisations, the concerned organisations may plan to switch over to e-
f payment system in a phased manner starting with transactions with the major
suppliers in the beginning or in whatever manner is found more convenient.

It is expected that in three months i.e. by 1st July, 2004, 50% of the payment
transactions both in value terms as well as in terms of number of transactions shall
be made through ECS/EFT mechanism instead of payment through cheques. The
remaining 50% payment transactions at all centres where such facilities exist shall
be made by 31st Dec., 2004.

These instructions are applicable to all the metro cities and other urban
centres where the banks provide ECS/EFT and similar other facilities.

The departments, PSUs, Banks etc. should also provide an enabling

environment and facilities so that businessmen and other citizens can make payment
of Govt. dues and payments to PSUs etc. electronically.

In addition to significantly reducing processing costs in preparation and

dispatch of cheques, the above measures also reduce the risk of frauds by providing
speed, efficiency and easier reconciliation of accounts.

Sd/-
(ANJANA DUBE)
DEPUTY SECRETARY

To

i) The Secretaries of All Ministries/Departments of Government of India.

ii) The Chief Secretaries to all Union Territories.
iii) The Comptroller & Auditor General of India.
iv) The Chairman, Union Public Service Commission.
v) The Chief Executives of all PSEs / Public Sector Banks / Insurance
Companies / Autonomous Organisations / Societies.
vi) AU Chief Vigilance Officers in the Ministries / Departments / PSEs Public
Sector Banks /Insurance Companies / Autonomous Organisations I Societies .
.vii) President's Secretariat I Vice-President's Secretariat I Lok Sabha Secretariat I
Rajya Sabha Secretariat / PMO.
 No.005/CRD/19(part)
Government of India
Central Vigilance Commission
•.••• *
Satarkata Bhawan, GPO Complex,
INA, New Delhi
~
Dated nay. 2010

OFFICE ORDER No.19/05/10

Sub: Transparency in Works/Purchase/Consultancy contracts awarded on

Nomination basi .

Commission vide Circular No 15/5/06 dated 09/05/2006 had prescnbed

certain measures to be followed on works/purchase/consultancy contracts
awarded on nomination basis by PSUs. These instructions have since been
reviewed in the Commission and the Commission IS of the view that the Board of
the PSU IS not required to scrutinize or post facto vet the actions of the
operattonal managers and theIr decisions to award work on nomination baSIS

2 Therefore, the following amendment IS being made In sub-para (i) of Para

2 of Commission's above clrcular.-

~All works awarded on nomination basis should be brought to the notice of

the Board of the respective PSUs for scrutiny and vetting post facto"

Read as

• All works awarded on nomination basis should be brought to the

notice of the Board of the respective PSUs for information".

(Vineet Mathur)
Director
All Chief Vigilance Officers of CPSUs.

Copy to'

(i) All Secretanes of Govt oflndla

(11) All CEOs/Heads of Organizations
 No. OFF-1-CTE-1(Pt) V
Government of India
Central Vigilance Commission
*****

Satarkta Bhawan, Block 'A',

GPO Complex, INA,
New Delhi- 110 023
Dated the 24th March 2005

Office Order No. 15/3105

Subject: Notice inviting tenders - regarding.

The Commission has observed that some of the Notice Inviting

Tenders (NITs) have a clause that the tender applications could be rejected
without assigning any reason. This clause is apparently incorporated in tender
enquiries to safeguard the interest of the organisation in exceptional
circumstance and to avoid any legal dispute, in such cases.

2. The Commission has discussed the issue and it is emphasized that

the above clause in the bid document does not mean that the tender accepting
authority is free to take decision in an arbitrary manner. He is bound to record
clear, logical reasons for any such action of rejection/recall of tenders on the file.

3. This should be noted for compliance by all tender accepting

authorities.

Sd/-
(Anjana Dube)
Deputy Secretary

All Chief Vigilance Officers

 NO.009NGU002
Government of India
Central Vigilance Commission

Satarkta Bhawan. Block-A.

GPO Complex. INA,
New Delhi-110023.
Dated: 13/01/09

CIRCULAR No. __ =ol::...;~1/09

Subject- Implementation of e-tendering solutions.

References are being received by the Commission regarding the

methodology for selection of sole application service provider for the
implementation of e-tendering solutions in various organizations. The
Commission has examined the matter and is of the view that all organisations
should invariably follow a fair. transparent and open tendering procedure to
select the application service provider for implementing their e-tendering
solutions. The standard guidelines on tendering procedure should hold good for
the procurement of these services as well.

~
~
(Shalini Dafb~ri)
Director

All Chief Vigilance Officers

TelegraphicAddress : It.~ffr ~
"S TARKTA: New Delhi
~ ~
E-MailAddress
[email protected] ~~ aJ
-,
~
tJ
Website ~~~ ~~~
www.cvc.nic.in
CENTRAL VIGILANCE COMMISSION ~ 1fiR. ;;ft.tit.aft. :z1Cf)lrnt:q~~CffiDT.
EPABX ~t:t, an{.l:fJ.~., ~ ~-110023
24651001 - 07 Satarkta Bhawan, G.P.O. Complex,
Block A, INA, New Delhi 110023
~/Eax: 24616286
.
"{{./No
005/CRD/19 /"a5~
.
11.12.2012
~ / Dated .
Circular No. 18/12/12

Subject: Transparency in Works/Purchase/Consultancy contracts awarded on

nomination basis - reg.

The Commission has been emphasising on the need for observing integrity,
transparency, fairness and equity in all aspects of decision making including in tendering and
award of contracts. However, the Commission is still receiving complaints regarding adoption
of non-transparent methods in tendering and award of contracts. A number of such complaints
pertain to award on nomination (single source procurement) basis instead of following a
process of open competitive bidding. The Commission in their earlier office order No. 23/7107
dated 05.07.2007(copy enclosed) had laid down the exceptional circumstances where 'single
source procurement' can be resorted to These guidelines were consequent to the Supreme
Court's judgement in case of Nagar Nigam, Meerut vIs A 1 Faheem Meat Export Pvt. Ltd. [SLP
(Civil) No. 1074 of 2006J.

2. In view of the complaints being received regarding award of contracts on 'nomtnatron

basis' without adequate justification, the Commission has decided to reiterate their earlier
instructions for strict implementation. The Commission has also observed that there have been
instances where government organisations/PSUs obtain contract from other government
organisations/PSUs and further award the same to private entities on 'back to back tie up' basis
without competitive tendering mechanism and without any significant value addition by the
procuring government organisation/PSU. This practice subverts the Commission's emphasis on
integrity, transparency, fairness and equity in decision making. It is therefore, necessary to
curb this practice. Further, the Commission directs that details of all tenders awarded on
nomination basis shall be posted on website in public domain as per Commission's office order
of s" July 2007 alongwith brief reasons for doing so.

3. Kindly acknowledge the receipt and circulate to all concerned in your organization.

(J. VinodKumar)
Officer on Special Duty
To,
(i) The CMDs of all CPSUs/Public Sector Banksllnsurance Companies/Fls.
(ii) The CVOs of all the Ministries/Departments/Public Sector Undertakingsl
Public Sector Banksllnsurance Companies/Societies and other Local Authorities.
TelegraphicAddress :
" ATARKTA: New Delhi
E-MailAddress
~,
~ :, "t\o~i'Jr

~
cen [email protected] ;;;
'11': ",,~I(i
Website
www.cvc.nic.in
~~3l1<Wr ~~~ANCf.CJ"

CE TRAL VIGILA E COMMI 10 ~ '1cFf, ~ :eft.3fT. C61UOf~Cffi,

EPABX
.-~, ant.1:ff.~., ~ ~-110023
246 1001 - 07
Satarkta Bhawan, G.P.O. Complex,
~/Fa :24616286 Block A, INA, New Delhi 110023
. 010NGLl03S//0·n(
"ff./ 0............................. . .

~ / Dated :.~.. ~.~.:~~.~?

.
Circular No. 01/01/2012

Sub: Guidelines for compliance to Quality Requirements of e-Procurement Systems.

Ref: Commission's Circular NO.23/06/010 dated 23/06/2010

Commission has been advocating leveraqinq of technology for activities prone to

corruption since 2006 and one of the prominent Initiatives was adoption of e-
procurement for goods, works and services by all Mrmstnes/Oepartments/Orqarusanons
Commission advised all Organizations to ensure secuuty of the e-procurernent systems
and to get their system certified by Department of tnformauon Technology DIT)

2 DIT In turn requested Its attacneo office ::>1<..le ~~t ncardrsauon I esunq anu
Quality Certificate) Directorate to establish necessary processes and systems to
enable certification of e-Procurement systems Accordmgly the quidelmes prepared by
STQC In this regard approved and notified by the DIT IS available on egovstandards
website [www egovstandard go_ r 1 The qurdelmes are also available on
Commission's website lm -CII UI 1I1I1S rLct.o All tI ,t;;

Ministries/Departments/Organlsatlor ell e (ivl d 10 use the e quidehnes for

compliance to Quality Requirements fOI cernfymq th e Procurement systems

J VlnOul<L mar)
Officer on Special Duty

To

CVOs of all Ministnes/Departments

CVOs of all Public Sector Enterprises
CVOs of all Public Sector Banks/tnsurance Companies and Oi qaruz lions
 No.98/0RDIl
Government of India
Central Vigilance Commission
(CTE's Organization)
Satarkta Bhavan, Block' A'
G.P.O. Complex, I.N.A.,
New Delhi- 110 023
Dated the 9th July, 2003

Office Order No. 33/7/03

To

All the Chief Vigilance Officers

Subject:- Short-comings in bid documents.

SirlMadam,

The Commission has observed that in the award of contracts for goods and
services, the detailed evaluation/exclusion criteria are not being stipulated in the bid
document and at times is decided after the tender opening. This system is prone to
criticism and complaints as it not only leads to a non-transparent and subjective system
of evaluation of tenders but also vitiates the sanctity of the tender system.

2. The Commission would reiterate that whatever pre-qualification,

evaluation/exclusion criteria, etc. which the organization wants to adopt should be made
explicit at the time of inviting tenders so that basic concept of transparency and interests
of equity and fairness are satisfied. The acceptance/rejection of any bid should not be
arbitrary but on justified grounds as per the laid down specifications,
evaluation/exclusion criteria leaving no room for complaints as after all, the bidders
spend a lot of time and energy besides financial cost initially in preparing the bids and,
thereafter, in following up with the organizations for submitting various clarifications
and presentations.

3. This is issued for strict compliance by all concerned.

Yours faithfully,

Sd/-
(Mange Lal)
Deputy Secretary
Telefax No.2465I 010
lelegraphi'Address ~~~
"S·\IARKT : ew Delhi
I • tail Addres S
cenv I til nnic.in ~ 'J
Wcbsitc
~ ~ 31fGITrr 'f?11c/UttCf;'d'

\\\\\\.C .nic.in OMMlS ION ~ 'ltR. ;ijf:cft.a:n. z'CflTFm¥:tfr;;t:~iffi~.

E TRAL IGILA
l:.P·\B,· ~-~, 3lff.l(-t.1t. ~ ~-110023
~-+600200 Satarkta Bhawan GP.a. Complex,
Block A, INA, ew Delhi) 1002
~/h 24 5116
98/0RD/1 (viii)
11./ 0 , .

~ / l)att!.~~.~~~i~.
20~.4

Circular NO.01/04/14

Sub: Short-comings in bid documents

Ref: Commission's circular No.3317/03dated 9th July. 2003

The Commission has been impressing upon all Organisations to ensure

transparency and fairplay in all procurements/contracts. One of the concern relates
to the short-comings in framing of NITs and bid documents which results in
ambiguity and scope for interpretation differently during processing and award of
contracts by the organisations.

2. The Commission had vide its Office Order No.3317103 dated 9th July, 2003.
advised that whatever pre-qualification. evaluation/exclusion criteria, etc. which the
organization wants to adopt should be made explicit at the time of Invitmg tenders so
that basic concept of transparency and interests of equity and fairness are satisfied.
The acceptance/rejection of any bid should not be arbitrary but on justified grounds
as per the laid down specifications, evaluation/exclusion criteria leaving no room for
complaints as after all, the bidders spend a lot of time and energy besides financial
cost initially in preparing the bids and, thereafter, in following up with the
organizations for submitting various clarifications and presentations.

3 The above instructions are reiterated for compliance by all

Mlnlstnes/Departments/ Organisations.

(J Vinod Kumar)
Officer on Special Duty

To

All Chief Vigilance Officers.

 No.4CC-1-CTE-2
Government of India
Central Vigilance Commission
(CTEs Organisation)

Satarkta Bhawan,
INA Colony,
New Delhi - 110023

Dated: 8.6.2004

OFFICE MEMORANDUM

Sub: Mobilization Advance

*********
In order to address the problem of misuse of mobilization advance provision
in the civil and other works, the Commission had issued an O.M. dt.
8.12.1997 for grant of interest bearing 'Mobilization Advance' in selected
works. In view of references from certain organizations on this issue, the
Commission has reviewed the issue and it has been decided to modify and
add the following provisions in the existing O.M. This may be read as
addendum to the Commission's O.M. dt. 8.12.1997.

(i) If the advance is to be given, it should be expressly stated in the

NITlBid Documents, indicating the amount, rate of interest and
submission of BG of equivalent amount.

(ii) The advance payment may be released in stages depending upon the
progress of the work and mobilization of required equipments etc.

(iii) There should be a provision in the contract for adjustment of advance

progressively even as the bills are cleared for payment.

SdJ-
(Gyaneshwar Tyagi)
Technical Examiner
Copy to: -

All CVOs: Ministries/DepartmentslPSUslBankslUTs

 No.98/0RD/1
Government of India
Central Vigilance Commission
Satarkta Bhavan, Block A,
GPO Complex, INA
New Delhi-110023
Dated the is" March, 1999

To
(i) The Secretaries of All Ministries/Departments of Govt. of India
(ii) The Chief Secretaries to all Union Territories
(iii) The Comptroller & Auditor General of India
(iv) The Chairman, Union Public Service Commission
(v) Chief Executives of All PSUs/Banks/Organisations
(vi) All Chief Vigilance Officers in the Ministries/Departments/PSEs/Public
Sector Banks/Insurance Companies/Autonomous Organisations/Societies
(vii) President's SecretariaWice-President's SecretariatlLok Sabha
Secretariate/Rajya Sabha SecretariatlPMO

Subject: Improving vigilance administration-Tenders

Sir,
Please refer to CVC's instructions issued under letter No.8(1)(h)/98(1) dt.
18.11.98 banning post tender negotiations except with L-1 i.e., the lowest tenderer.
Some of the organizations have sought clarifications from the Commission as they are
facing problems in implementing these instructions. The following clarifications are,
therefore, issued with the approval of Central Vigilance Commissioner

(i) The Government of India has a purchase preference policy so far as the
public sector enterprises are concerned. It is clarified that the ban on the
post tender negotiations does not mean that the policy of the Government
of India for purchase preference for public sector should not be
implemented.

(ii) Incidentally, some organisations have been using the public sector as a
shield or a conduit for getting costly inputs or for improper purchases.
This also should be avoided.

(iii) Another issue that has been raised is that many a time the quantity to be
ordered is much more than L1 alone can supply. In such cases the
quantity order may be distributed in such a manner that the purchase is
done in a fair transparent and equitable manner.

Yours faithfully,

Sd/-
(P.S.Fatehullah)
Director
 · o. 98/0RDIl
Govemment of India
Central Vigilance Commission
******
Satarkata Bhavan, Block - 'A',
GPO Complex, I\'A,
Xew Delhi - 110023
Dated 04.09.2003

Office Order :\"0.44/9/03

To

All Chief Vigilance Officers

Sub: Irregularities in the award of contracts.

Sir/Madam,

While dealing with the case of a PS"C, the Commission has observed that the
qualification criteria incorporated in the bid documents was vague and no evaluation criterion
was incorporated therein. It is also seen that the category-wise anticipated TE"cs were not
specified in the bid documents and the same was left for assumptions by Tender Evaluation
Committee for comparative evaluation of financial bids, which led to comparative evaluation
of bids on surmises and conjectures. Further, it was also provided as a condition in the
tender bid that the tenderer should have previous experience in undertaking handling of
similar work and/or transportation works preferably of ISO containers, however, no
definition of 'similar works' was, indicated in the bid documents.

2. It should be ensured that pro-qualification criteria, performance criteria and

evaluation criteria are incorporated in the bid documents in clear and unambiguous
terms as these criterion very important to evaluate bids in a transparent manner.
Whenever required the departments/organisations should have follow two-bid system,
i.e. technical bid and price bid. The price bids should be opened only of those vendors
who were technically qualified by the Deptt.i Organisation. The Commission would
therefore advise that the Deptt.i Organisation may issue necessary guidelines in this regard
for future tenders.

3. It has also observed that the orders were allegedly split in order to bring it within the
powers of junior officers and that the proper records of machine breakdown were not being
kept. It is therefore, decided that in the matters of petty purchase in emergency items all
departments/organisations must keep proper records of all machine breakdown etc.

4. All CVOs may bring this to the notice of all concemed.

Yours faithfully,

Sd/-
(Anjana Dube)
Deputy Secretary