3b.Common_Contract Management

• Contract


  Promises, agreements, transactions between two parties based on which commercial activities are carried out
• Indian Contract Act, 1872


  Deals with all types of Contracts
• Contract (as defined in Indian Contract Act, 1872)

  An agreement enforceable by law
• Agreement


  A set of promises forming the consideration for each other
• Essential requirements for valid contracts

  • Offer and its acceptance
  • Free consent of both parties
  • Parties should be competent to enter into contract
  • Mutual and lawful consideration for agreement
  • Object should be lawful and not expressly declared to be void
  • Certainty and possibility of performance
  • It should be enforceable by law. Hence, intention should be to create legal relationship
• Agreements of social or domestic nature are not contracts
• Contract should not have been declared as void under Contract Act or any other law
• Legal aspects governing public procurement of works

  • The Constitution of India
  • Indian Contracts Act, 1872
  • Arbitration and Conciliation Act, 1996 read with The Arbitration and Conciliation (Amendment) Act, 2015
  • Competition Act, 2002 as amended with Competition (Amendment) Act, 2007
  • The Information Technology Act, 2000 (IT Act, regarding e-procurement and e-auction)
  • Right to Information (RTI) Act 2005
  • Central Vigilance Commission Act 2003
  • Delhi Special Police Establishment Act, 1946 (DSPE – basis of the Central Bureau of Investigation)
  • Prevention of Corruption Act, 1988
  • Code of Criminal Procedure, 1973 (Sections 195(1) and 197(1))
  • Various labor laws applicable at the works site; and laws applicable for ESI and EPF deductions and GST & work contract tax
  • Various building and safety acts, codes, standards applicable in the context of the scope of work
  • Various environmental and mining laws, codes, standards applicable in the context of the scope of work
• Bidder


  A Person, firm, company (or any other legal person) who has submitted an offer in response to a notice inviting tender
• Contractor


  The bidder whose tender (offer) has been accepted, and who has entered into a valid agreement
• Supplier


  The individual or firm supplying the goods on contract
• Goods


  All the equipment, machinery or other material which the supplier is required to supply under the contract
• Advance purchase Order


  The intention of purchaser to place the purchase order on the bidder
• Purchase Order


  The order placed by the purchaser on the supplier signed by the purchaser including all attachments and appendices thereto and all documents incorporated by reference therein. The purchase order shall be deemed as 'Contract'
• Work Order


  The order issued to the contractor by the officer in charge of the works
• Contract Price


  The price payable to the supplier under the purchase order for the full and proper performance of its contractual obligations
• Bid documents/ Tender documents


  All the documents of 1. Specifications of the materials or work 2. Terms and conditions of the contract 3. Plans and detailed diagrams if any and other related documents forming part of contract
• Notice Inviting Tender (NIT)


  Any publication or notice issued to the public through website or otherwise expressing the intention of the corporation to get the supplies or work done and requesting the bidder to make offers
• Earnest Money Deposit (EMD)/ Bid Security


  An amount required to be deposited by the bidder/ tenderer along with his offer as a security against his default of entering into contract
• Security Deposit/ Performance Guarantee

  An amount fixed as security for ensuring the performance of the contract and compliance to the other conditions of contract by the contractor
• Procurement Policy Division (PPD) in Department of Expenditure; Ministry of Finance has been created to encourage uniformity and harmonization in public procurement processes by setting guidelines, dissemination of best practices, providing guidance, oversight and capacity building and issuing of procurement manuals
• Centralization of procurement or involvement in procurement processes is not the intended purpose of creation of PPD
• Central Public Procurement Portal (CPPP)


  Designed, developed and hosted by National Informatics Centre (NIC, Ministry of Electronics & Information Technology) in association with Dept. of Expenditure to ensure transparency in the public procurement process
• The primary objective of the Central Public Procurement portal is to provide a single point access to the information on procurements made across various Ministries and the Departments
• CPPP has e-publishing and e-procurement modules
• It is mandatory for all Ministries/ Departments of the Central Government, Central Public Sector Enterprises (CPSEs) and Autonomous and Statutory Bodies to publish on the CPPP all their tender enquiries and information about the resulting contracts
• CPPP provides access to information such as documents relating to pre-qualification, Bidders' enlistment, Bidding documents; details of bidders, their pre-qualification, enlistment, exclusions/ debarments; decisions taken regarding prequalification and selection of successful bid
• GFR 2017 (Rule 160) makes it mandatory for Ministries/ Departments to receive all bids through e-procurement portals in respect of all procurements
• Ministries/ Departments which do not have a large volume of procurement or carry out procurements required only for day-to-day running of offices and also have not initiated e-procurement through any other solution provided so far, may use e-procurement solution (CPPP) developed by NIC
• Other Ministries/ Departments may either use e-procurement solution developed by NIC or engage any other service provider following due process. In the latter case, data on tenders are to be published on CPPP as well through web-service
• Government e-Market Place (GeM)


  An online e-commerce marketplace developed to ensure better transparency and higher efficiency for common use goods and services
• In GeM product or services are offered by a number of eligible sellers and all the eligible buyers can view/ compare all the product/ services and select the product/ services offered by any one of the sellers
• The procurement process on GeM is online and electronic - end to end from placement of supply order to payment to suppliers
• The registration of suppliers on GeM is online and automatic based on ID authentication etc
• The procuring authorities have to assess the reasonability of rates
• Buyer's transactions are processed by the GeM portal and then product/ services are delivered and fulfilled directly by the participating sellers
• Tools of reverse bidding and e-auction are also available which can be utilized for the procurement of bulk quantities
• The Procurement of Goods and Services by Ministries or Departments are mandatory for Goods or Services available on GeM
• Ministries/ Departments/PSUs are expected to make all their procurements through GeM platform in case of all the products and services available on GeM
• The requirement of compulsory advertisement in Newspapers as per GFR 2005 has been dispensed with vide Department of Expenditure OM No. F.1/8/2018-PPD dated 8.3.2018