DISPOSAL

Disposal is reverse of procurement. The purpose of disposal is to timely dispose of the unwanted materials, scraps generated during production old and outdated P & M (BER) etc. for the purpose of generating revenue. For disposal guidelines is being issued by OFB time to time & Factory follows it accordingly

DISPOSAL

• Disposal is an effective function of material management which mainly serves the following purposes -

• To clear the blocked up capital and obtain as much revenue as possible for more useful purposes.

• To vacate the storage space occupied by these items, so that the same can be utilised for storage at other items.

• To bring them in the area of utilisation from the area of non-utilisation by making them available to other organisation/contractors who need them.

CATEGORISATION OF ITEMS FOR DISPOSAL

• Surplus serviceable items not required by the organisation or in excess over the permissible stock limit.

• Unrepairable stores.• Unserviceable items.• Scrap-generated as by product or

production like brass scrap, copper scrap, aluminium scrap, saw dust etc.

• Unserviceable plant & Machinery.

CATEGORISATION OF ITEMS FOR DISPOSAL

• Waste products like coal ash, cinder ash, saw dust etc.

• Obsolete- store is declared obsolete due to technical inefficiency or superserion due to improved/equipment stores.

• Obsolescent-No further provision of such items is made due to development of superior equipment.

Agency for Disposal

• Issue to other ord. Fys./OMD/PSU through MAS (OMD - Other than Military Department).

• Through Auction (Departmentally) or through MSTC.

• Through Tender.• Issue to private contractor for the

conversion into raw material/finish products required by the Fy.

• Note:-• (i) The disposal shall be effected by

public auction/open lender. Limited tender may be resorted to with proper justification with the prior approval of Board/ concerned Member.

• (ii) Rate/Running contracts may also be concluded with the prior approval of Board/ concerned Member.

REVIEW OF SURPLUS ITEMS FOR DISPOSAL

• Review of surplus items for disposal involves scrutiny to ascertain prospects of alternative utilisation on re-ulilisalion after carrying out certain modification/ processing etc. This review is carried out in the following manner

• Within the factory- A committee is formed in the

factory which carries out review of surplus items

once in every six months. This committee is assisted

by stores Branch as well as Material Control Office

This committee tries to ascertain the area of

alternative/ re- utilisalion of these items and declares

the surplus for disposal only when no alternative

utilisation could be found.

• Technical Team-• Technical team is formed under the Directives of

Director General of ordnance stores (D.GOS). This team consists of the Reps of different depots/departments of Defence organisation Ordnance Factory Board and factory concerned. They jointly review the items declared as surplus by the factory and try to explore possibility of utilisation by any other sister factory/Military Department Whenever no such scope exists, the team declares them as surplus for disposal

AGENCIES FOR DISPOSAL

• DISPOSAL BY THE FACTORY • General Guide Lines:• As per instructions, priority should be given for

disposal to sister factories. When item are not required by sister factories, then only other modes of disposal are followed.

• Disposal cannot be arranged by single tender/limited tender enquiries or negotlatings by the factory w/o the specific approval of the 0. F. Board. In case of disposal by advertised Tender Enquiry, it is essential to accept the highest offer only. In case of taking any other decision sanction of the O.F. Board is required.

• As per the latest instruction issued by OFB for disposal of Ferrous scraps/waste etc. within the financial year only one mode to be adopted i.e. cither through OTE or through Auction.

• Normally all the store/scrap valued Rs. 50,000/" in each case should be disposed by public Auction. In case of waste product the limit for Auction sale will be Rs. 1 lakh in case/lot. Tender sale should be resorted for items/lots in excess of above financial ceiling.

• Under M/D let No. PC No. 6(z)/76 D prod. Dt. 9.5.78 it has been laid down that 30% of all copper & copper based Non ferrous scrap & alloy shall be reserved for disposal in lots of 1 to 5 M/tons each to S.S.I, units & further 30% of the available scrap shall be marked for bonafide export units. It should be kept in view that a price preference of 10% over the highest tendered rate is admissible to the registered small scale limit. The same price preference may be allowed to small scale, Invent of any qty. out of the above allocation not being disposed off to the entitled categories. The same will be added to the quantity for disposal to the firms in general.

• DISPOSAL BY PUBLIC AUCTION • While carrying out disposal by public

Auction, the following steps are taken:• Fixing of Reserve guiding price; A

committee is appointed by GM for fixing the reserve guide price. Two Fy. Officers & one AO. The team fixes the price of a lot by taking into consideration of the following factors:

- Book value of the item.- Highest bid received in the last Auction if the

item was put up for disposal in the past.- Present condition of the item.- Present market price of the item.

• Government Auctioneers: Auctions are arranged through govt. Auctioneer For this purpose a list of Govt. Auctioneers is maintained by the factory, and each auctioneer is given a chance by rotation in his turn.

• Supervision of Auction: For this purpose, supervising officer is nominated by GM. Who supervises the auction on behalf of the GM and gives decision regarding acceptance/ rejection of the bid on the spot and signs all documents on behalf of the GM. /Govt. of India.

• Supervising officer may be authorized by the GM in writing to accept, the bid upto 10% below GM can accept 20% below the reserve guiding price.

• Representatives of Excise Deptt., Sates Tax Authorities, Security, Inspection Deptt. Accounts etc. also attend auction to give suitable guidance/ instructions in the matter falling under their purview.

• Successful bidders are required to deposit 25% of the total value immediately to Govt. auctioneers on acceptance of the bid. Govt. Auctioneer will deposit this amount in nearest RBI or SBI through MRO- MRO is made in four copies original + Duplicate - Returned to Factory Triplicate copy - Kept by RBI Quadruplicate copy - Kept by Auctioneers.

• Balance payment of the bid is required to be made by the bidder against MRO within six working days of the auction.

• Bidder is required to lift the material within 21 working days of the auction. This lime limit can be extended before the auction with the approval of supervising officer.

• Entry of Bidders is controlled by the security. Bidders may enter the factory against the gate passes to be issued by stores section, on payment of Rs. 10/-.

• Ground Rent: In case of failure of the bidders to lift the material within the stipulated period, he has to pay the ground rent at the rate of 2% per week of the cost of unlifted material.

• Belated payment in case of failure of the bidders to make the payment within the stipulated period he has to pay penalty at the rate of 10% of 1% of value per day (i.e. 0.11% of value).

• DISPOSAL BY ADVERTISED TENDER ENQUIRIES

• The following special instruction are followed in ease of disposal by advertised tender enquiries :

• Tender enquiries are issued in the prescribed proforma only. Normally 14 days arc allowed for DAVP to publish the advertisement in leading Newspapers.

• Last date of issue of* Tender forms to the interested parties is fixed as the 44lh day from the dale of Issue of advertisement to DAVP.

• The lenders are received upto 2.30 pm of the 45th day of the date of issue of advertisement to DAVP and the tenders are opened on the same day at 3.00 pm.

• Only those contractors are allowed to witness the tender opening etc who have participated in the disposal offender enquiry.

• Existing Instructions arc that in case of disposal the tender should be complete in all respect and it should be on the prescribed proforma.

• The tenderers are required to submit 2% of the total cost of their bid as earnest

• Money along with the quotation, in the form of call deposit or treasury receipt.

• Late quotations in these cases are discouraged.• Comparative statements of Tender are prepared

based on the quotations received and decision for placement of disposal contract is taken as per various rules in vogue within a period of 30 days from the date offender opening.

• The highest acceptable offer can be accepted by the GM. In case of taking any other decision the matter has to be referred to OFB.

• The successful tender has to des posit security deposit at 10% of the total value of the contract before release of disposal of contract.

• Note: Complete instructions in disposal procedure are contained in OFB letter No.212/2/MM dt. 15-6-81.

DISPOSAL COMMITTEE

• In case of disposal, the value of the item is very large. In order to exercise monetary control and also to safeguard the interest of Govt., disposal committee is formed which is composed as under:

• i. Chairman - GM/AGM• ii. Rep- of LAO - member• iii. Rep. of Store Sec. member• iv. Rep. of Provision Office member• v. Rep. of Work Inspection Office member• vi. Any other member as considered necessary.

DISPOSAL OF FERROUS SCRAP

• As per directive issued in June 1985, disposal of ferrous scrap is arranged through MSTC. The following procedure is followed in the above case.

• Steel Scrap Class 'A' and 'B' are disposed off by the factory only.

• In case of other ferrous scrap, the value should be above Rs. 50,000/.

• The type of scrap with details of quantity and specification is intimated to MSTC. Tender Enquiries are issued by MSTC and CST is sent to the factory for recommendation

DISPOSAL OF FERROUS SCRAP

• Disposal contract are concluded by MSTC based on the recommendation of the CST.

• Payment towards the sale value is accepted by MSTC and they issue sale release order to the contractors for the Issue of the scrap.

• Sales tax and other taxes are collected by the factory from the contractor before issue of the scrap. Issue of scrap is made as per disposal instructions of MSTC.

• Discrepancy if any arising out of the contract is settled by MSTC.

• Disposal committee carries out the following functions:

• Scrutiny of the tender enquiry before sending to DAVP regarding terms and conditions etc. to avoid disputes at a later date,

• Scrutiny of quotations received and recommending the contractor on whom disposal contract should be placed.

• Supervising progress of disposal contract and giving suitable advice to the disposal Group of provision office and Stores Section from time to time.

Disposal implementation Committee

• In certain cases, Disposal implementation Committee is formed. The functions of Disposal Implementation committee is to ensure that the materials arc lifted by the Contractors as per terms of contract. This committee also settles disputes which may arise during the execution of the contract

FINANCIAL POWER FOR DECLARATION OF SURPLUS AND DISPOSAL

NATURE OF POWER AUTHORITY EXTENT TO WHICH DELEGATED

REMARKS WHETHER FINANCE IS TO BE CONDUCTED

DOCUMENTS IN WHICH DELEGATION AS COTAINED

DECLARATION OF SURPLUSES

Serviceable(1)-Stores: drums, Container and packages.(2)- Serviceable Stores other than- drums, Container and packages.(3)-Declaration of surplus of Medicines or health care related items.

GM

GM

Medical officer in charge of Ord. Fy. Hospital

Full Power

50 Lakh in each case

1 Lakh in each case

Subject to recommendation of a board constituted for that purpose.

YesYesYes

OFB OrderNo. 439/BSDt. 11.04.2007OFB OrderNo. 454/BSDt. 19.02.2008

Unserviceable Stores. GMAGMJt.GM/DGM

Full PowerRs.25 Lakh in each caseRs.10 Lakh in each case

Nil Yes M of D letter Dt.31.12.79 & Order No.439/BS Dt. 11.04.2007

Scrap and Swarf GMAGM

Jt.GM/DGM

Full PowerRs.25 Lakh in each caseRs.10 Lakh in each case

Nil Yes M of D letter Dt.31.12.79 & Order No.439/BS Dt. 11.04.2007

Un serviceable Plant & Machinery beyond economical repair.

GM Full Power Before declaring any item of P&M as unserviceable and Surplus all avenues for its cost effective reconditioning have to be explored.

Yes OFB order No.375/BS/corr-1, Dt.08.11.93.

• DISPOSAL OF SURPLUS

NATURE OF POWER AUTHORITY EXTENT TO WHICH DELEGATED

REMARKS WHETHER FINANCE IS TO BE CONDUCTED

DOCUMENTS IN WHICH DELEGATION AS COTAINED

Serviceable Stores(1)-: drums, Container and packages.(2)- Serviceable Stores other than- drums, Container and packages.

GM

GM

Full Power

50 Lakh in each case

Subject to adherence to operating procedure for disposal.Clearance from the Central Technical Team as not necessary.

Yes

Yes

M of D letter Dt. 31.12.79 &OFB OrderNo. 439/BS/Dt. 11.04.2007

Unserviceable Stores. GMAGM

Jt.GM/DGM

Full PowerRs.25 Lakh in each caseRs.10 Lakh in each case

Nil YesYesYes

M of D letter Dt.31.12.79 & Order No.439/BS Dt. 11.04.2007

Scrap and swarf GMAGM

Jt.GM/DGM

Full PowerRs.25 Lakh in each caseRs.10 Lakh in each case(book value)

Nil YesYesYes

M of D letter Dt.31.12.79 & Order No.439/BS Dt. 11.04.2007

Un serviceable Plant & Machinery beyond economical repair.

GM Full Power,When book value is less then Rs. 5 Lakh.

Yes OFB order No.439/BS/Dt.11.04.2007.

• Note:

DISPOSAL OF SURPLUS

NATURE OF POWER

AUTHORITY EXTENT TO WHICH DELEGATED

REMARKS WHETHER FINANCE IS TO BE CONDUCTED

DOCUMENTS IN WHICH DELEGATION AS COTAINED

DISPOSAL OF PLANT & MACHINERY

OFB 20 LAKH IN EACH CASE

SUBJECT TO THE CONDITION THAT NORMAL PROCEDURE IS RESORTED TO

YES MOD LETTER NO. 5(12)/D(PROD)/B DT. 20.12.2006

DISPOSAL OF STORES, SCRAP, OBSOLETE AND WASTE MATERIAL.

OFB FULL POWER -DO-EXCEPT IN THE CASE OF STORES WHICH ARE REQUIRED TO BE DECLARED TO THE DGS&D AS PER RULE 124(1) OF GFR

YES M OF D LETTER NO. 2(6)/85(FY-I) DT.10.06.86

Note- (I) for serviceable items, other than Drums, and Packages/Containers, recommendation of Technical Team should be taken into account

(II) Disposal procedure as laid down in P&MM Circular No. 212/2/MM Dt. 15.06.81 should be followed.