Basics of Procurement

Abhijit Majumder
Sr.Faculty
Indian Institute of Coal Management, Ranchi
 What is Procurement ?

The activity of acquiring

goods or services to accomplish
the goals of an organization.
Steps of Procurement
 Estimate

Make a realistic
estimate of the
cost involved in
the procurement
Administrative Approval
Seek an approval
from the Competent
Authority with proper
estimate once a
procurement is
needed
Preparation of Bid Document
Two Bid System
Tender Fee & Earnest
Money
Pre-qualification
Bid Submission Date &
Validity
Terms & Conditions
Scope of Work/ Supply
Price Bid (BOQ)
 Approval of Bid Document

The Draft Bid

Document must
be approved by
the Competent
Authority
Tender Committee
Comprising of:
Technical/User
Deptt.
Purchase/Contract
Deptt.
Finance
Wide Publicity of Bid

Notice Board
News Paper
Website
 Bid Receipt
Notification of Date,
Time and Place (s)
Assign Box/Official
Representation of
Bidders
Proper
Documentation
Proper Custody of Bid
Documents
 Scrutiny of Bid
Scrutinize
Techno-commercial Bid
Adhere to
Pre-qualification Criteria
of Bid Document
Accept / Reject Bid
accordingly.
Recommend & Seek
approval for Price Bid
Opening
Price Bid Opening
Invite all qualified
bidders to witness the
proceeding
Document the
presence of Bidders
and TC
Declare the prices
received
Scrutiny of Lowest Bid
Compare with Estimated Price/
Justified Price/Updated Price.
Judge the reasonableness as
per manual in terms of
percentage above/below
If unreasonable Cancel
Tender/ Consider negotiation
subject to certain conditions
Seek approval for negotiation
Negotiation
Fix up a date and Invite
the bidder for
negotiation with price
break-up
Keep your price
justification handy
Negotiate
If negotiation fails, go
for retender.
Award of Work/Supply
Acceptance of the offer
Security Deposits/
Performance
Guarantee.
Award of Work strictly
as per stipulations of
Bid Document
Agreement
 Delivery / Execution
Monitor the
delivery/completion
schedule as per
Agreement.
Verify Bank Guarantee
Inspect supply/work
Ensure statutory
deduction
Penalize on default
One Last Word

Be Transparent
Maintain Equity
Discourage
Corruption