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PARA NO SUBJECT PAGE

NO. 1.0 INTRODUCTION 1 2.0 APPLICABILITY 1 3.0 OBJECTIVES 3 4.0 RESPONSIBILITIES OF INDENTING OFFICERS 3 4.2 RESPONSIBILITIES OF PR RAISING OFFICERS 3 5.0 RESPONSIBILITIES OF THE FINANCE OFFICERS 4 6.0 FUNCTIONS OF THE PURCHASE DEPARTMENT 4 7.0 CLASSIFICATION OF MATERIALS AND SUPPLIERS 6 8.0 DELEGATION OF POWERS 6 9.0 SOURCING OF MATERIALS 10

10.0 ISSUE OF PURCHASE REQUISITIONS 13 11.0 MODES OF PURCHASE 14 12.0 TENDER COMMITTEES 20 13.0 SECRECY PROCEDURES 21 14.0 LATE TENDERS 21 15.0 PROCEDURE FOR ARRIVING AT L1 21 16.0 GUIDELINES FOR NEGOTIATION 22 17.0 MODES OF TRANSPORT 24 18.0 TERMS OF PAYMENT FOR INDIGENOUS SUPPLIERS 25 19.0 TERMS OF PAYMENT FOR FOREIGN SUPPLIERS 26 20.0 STANDARD TERMS & CONDITIONS 26 21.0 AMENDMENT TO PURCHASE ORDER 32 22.0 MICRO, SMALL AND MEDIUM ENTERPRISES 34 23.0 COMPLIANCE WITH RIGHT TO INFORMATION ACT 34 24.0 MANAGEMENT REPORTING 35

GLOSSARY 36 Annexure-1 PURCHASE REQUISITION REQUIREMENT 38 Annexure-2 REQUEST FOR QUOTATION / ENQUIRY FORMAT 39 Annexure-3 PURCHASE ORDER FORMAT 40 Annexure-4 REGISTRATION OF VENDORS 41

CONTENTS

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Annexure-5 VENDOR RATING PROCEDURE 43 Annexure-6 STANDARD TERMS AND CONDITIONS (INLAND RFQ) 47 Annexure-7 STANDARD TERMS AND CONDITIONS (FOREIGN RFQ) 51 Annexure-8 ADVANCE PAYMENT 55 Annexure-9 SPLITTING OF ORDER QUANTITY 66 Annexure-10 STANDARD TERMS, CONDITIONS & INSTRUCTIONS TO PO (Inland) 70 Annexure-11 STANDARD TERMS, CONDITIONS & INSTRUCTIONS TO PO (Foreign) 76 Annexure-12 INSTRUCTION FOR DESPATCH BY AIR FREIGHT 80 Annexure-13 INSTRUCTION FOR DESPATCH BY SEA FREIGHT 82 Annexure-14 AGE ANALYSIS OF PENDING PRs 85 Annexure-15 AGE AND CAUSE ANALYSIS OF RECEIPTS PENDING 86 Annexure-16 AGE AND CAUSE ANALYSIS OF CLAIMS PENDING 87 Annexure-17 ANALYSIS OF SUPPLIES PENDING 88 Annexure-18 ANALYSIS OF POs - CATAGORYWISE 89 Annexure-19 REQUIREMENT OF CASH OUTFLOW 90 Annexure-20 PENDING SUPPLIES AGAINST ADVANCE PAYMENT 91 Annexure-21 QUARTERLY PENDING PAYMENTS FOR MORE THAN 3 MONTHS 92 Annexure-22 LEAD TIME ANALYSIS – PR TO PO 93 Annexure-23 PRICE TRENDS – CATAGORYWISE 94 Annexure-24 PURCHASE DETAILS OF PROPRIETARY ITEMS 95 Annexure-25 QUARTERLY FE REPORT 96 Annexure-26 PURCHASE FROM SSI 98 Annexure-27 ANY OTHER REPORTS RELATED TO GOVERNMENT 99 Annexure-28 BANNING / BLACKLISTING 100 Annexure-29 CIRCULAR NO.18254/GM(F)/CO DT:21.08.2009 ISSUED BY D (F) &

OFFICE MEMO B-584 DT:30.07.2009 FROM COMPANY SECRETARY 103

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PURCHASE PROCEDURE

1.0 INTRODUCTION

1.1 OUTSOURCING IN BEL Bharat Electronics Limited, a Navaratna Company, under Ministry of Defence

Production, out sources Products & Services requirements on need basis from different categories of business partners viz PSUs, SSI, Private Firms – indigenous & Foreign and Government Organisations as well.

The outsourcing is governed by the following procedures:

Purchase Procedure Sub Contracts Procedure Work Contracts Procedure

1.2 PURCHASING POLICY

The purchasing policy is based on the principle of evaluating and selecting suppliers fairly and objectively (on parameters of Quality, Cost, Delivery, Technology and Supplier’s Financial stability).

1.3 The procedures to be followed in purchase matters were as per Office Order No.

HO/591/011 dated 02 Sep 1996 and its amendments from time to time. A review of these procedures has now been made taking into account fast changing, challenging and competitive environment and the present needs of the company. Based on this review, the revised Purchase Procedure is issued for adoption by all Units.

1.4 The Suppliers are given reasonable notice and opportunities to participate in tender.

1.5 The intent of this policy is to establish a high level of confidence in the Purchase

procedure by ensuring that procurement of materials or services is carried out in an open, fair, consistent and competitive manner.

1.6 Discourages any activity which goes against the Vigilance and financial norms of the

Organisation.

2.0 APPLICABILITY This purchase procedure is applicable to procurement, and / or service and repairs of

1) Production items 2) Non-production items 3) Capital items and 4) Development items

The procedures are however not applicable to

a) Orders placed on sub-contractors (with or without materials supplied by the company)

b) Purchases made by foreign purchase offices of the Company and c) Works Contracts.

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Applicability of purchase procedure for various activities is illustrated in the table below:

Para Activity Procedure to be

followed Executing Div. / Deptt.

2.1 Execution of Major Works including supplies 2.1.1 Execution of works where

single turnkey solution is economically beneficial to the company .

Works contracts manual

Engg. Services / Plant & Services

2.1.2 Execution of works where procurement and execution of work, done separately, is economically beneficial to the company.

1. Purchase procedure - for procurement Eg. Air-conditioning eqpt etc.

2. Works contracts manual – for execution of civil, electrical and mechanical work.

Woo

Purchase Department and / or Engg. Services / Plant & Services

2.2 Procurement of Spares and Services 2.2.1 Procurement of spares

including service / repairs. Purchase procedure. Department authorised

by Unit / SBU Head / GM / Management.

2.2.2 AMC for stores / equipment.

Works contract procedure. Department authorised by Unit / SBU Head / GM / Management.

2.3 Contract for movement of inward / outbound goods by sea / air / road / rail / other means.

Works contract procedure. Department authorised by Unit / SBU Head / GM / Management.

2.4 Rate / term contracts for supply of goods.

Purchase procedure. Department authorised by Unit / SBU Head / GM / Management.

2.5 Contract for service involving movement of documents inward / outward, customs clearance and any other services which do not involve goods.

Works contract procedure. Department authorised by Unit / SBU Head / GM / Management.

3.0 OBJECTIVES

The objectives of all purchase activities in BEL are to ensure that, at all times:

3.1 The required materials, to prescribed specifications, are purchased from reliable sources in right quantities, at right times and at right prices.

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3.2 Fair and consistent practices are followed in making the purchases with a view to establish long term business relationship with the suppliers.

3.3 The total ‘lead time’ for procurement is reduced to the minimum. 3.4 The procurement is based on the Material Requirement Planning. 3.5 The economics and legal interests of the organization are safeguarded 3.6 The procurement activities are made ‘paper less’ by adapting the emerging trends in IT,

keeping in view the Audit and Vigilance requirements. 3.7 The Governmental rules and regulations are complied with. 4.0 RESPONSIBILITIES OF INDENTING OFFICERS 4.1 All Indenting Officers shall ensure that: 4.1.1 The requirement of the material is finalized based on ESO / Advance ESO /

Procurement approvals. 4.1.2 The schedule of requirement is generated against the Sale Order / Internal Order /

WBS element. 4.1.3 Suggested suppliers are indicated in the indent. 4.1.4 Where indenting officer himself is a PR raising officer he will discharge the

responsibility of PR raising officer along with his responsibilities as indenting officer. 4.2 RESPONSIBILITIES OF PR RAISING OFFICERS 4.2.1 In case the indenting agency or PR raising agency is different, the PR raising agency

should consolidate the requirement based on the schedule received from the different indentors before raising PR (the content of PR shall be as per Annexure-1).

4.2.2 Based on the schedule of requirement PR is generated through the system in SAP

environment OR the schedule of requirement is sent to the material control department for raising the PRs in other cases.

4.2.3 Suggested suppliers are indicated in the PR. 4.2.4 In case of Re-Order Level items (ROL) / consumables PR is issued based on

consumption pattern. 4.2.5 Ensure that financial approval exists for the procurement. 4.2.6 Ensure that PR contains the names of previous suppliers, AVD and / or Suppliers as

per drawings in addition to the suggested suppliers received from the indentor. 4.2.7 Ensure that PRs are generated in time to meet the schedule of requirement. 4.2.8 Normally the date of PR should be such that the date of delivery should not be less

than 30 days from the date of PR.

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4.2.9 The correct description, BEL part number and supplier’s part number / reference in full

are recorded against each item in the PR (wherever suppliers’ part number / reference in full is not available, the detailed specification or drawing should accompany the PR).

5.0 RESPONSIBILITIES OF THE FINANCE OFFICERS All Finance Officers shall ensure that: 5.1 The prescribed rules and procedures have been followed and financial propriety has

been observed. 5.2 The PR is generated according to the ESO / Advance ESO / Procurement Approvals. 5.3 The Purchase Orders are vetted to ensure that complete and adequate information with

respect to vendor, Taxes and other relevant information are captured before releasing the PO.

5.4 The purchase proposal files are cleared promptly, within the specified time period, as

decided by SBU/Unit Head. 5.5 The payment is made to the vendors promptly as per the terms and conditions of

Purchase / Service order by taking pro-active actions and settling the pending issues, if any.

6.0 FUNCTIONS OF THE PURCHASE DEPARTMENT The functions of the Purchase Department, inter-alia, are: 6.1 To scrutinise the purchase requisitions, check availability of import licences if applicable,

check the previous purchase details and performance of suppliers. 6.2 Purchase Officer may add to the list of vendors suggested in the PR, those vendors who

are registered for the supply of the items to increase the competition. 6.3 To issue tenders / enquiries / RFQs (Specimen RFQ format as per Annexure-2),

analyse the quotations received and prepare comparative statements ensuring secrecy. 6.4 To hold negotiations with the lowest bidder, on prices, delivery, terms of payment or

other conditions wherever required, in association with Finance and involve indentor, if required, after approval of competent authority.

6.5 The Purchase Requisitions are converted into Purchase Orders within 21 days from the

date of Purchase Requisition except for obsolete items / items needing clarification / capital items.

6.6 To issue POs after obtaining competent authority’s approval as per delegation of powers

and vetting by Finance wherever financial concurrence is required. POs to be generated only through system (Specimen PO is as per Annexure-3).

6.7 To receive and check order acknowledgement from the suppliers and to set right any

qualified acknowledgement or acknowledgement with reservations.

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6.8 To communicate letter of credit particulars and payment details to the suppliers and take all actions to expedite payments to the suppliers in other cases.

6.9 To ensure that all necessary amendments to PO have been issued before L/C is opened

to avoid charges on account of amendment required due to subsequent amendment of the purchase order.

6.10 To submit application to DGFT (Director General, Foreign Trade) for obtaining necessary

Advance Licence, for physical export, deemed export and Import Licence for restricted items covered as per EXIM (Export and Import) Policy in co-ordination with nominated department.

6.11 For all high cost and high volume items, the deliveries shall be staggered to ensure

minimum inventory of raw materials and components. However, in case, the suppliers do not agree for staggered deliveries, separate orders are to be placed for each quarter based on economic considerations, after recording the reasons for such separate orders.

6.12 For standard and commonly used items, Purchase Department may enter into Annual

Contracts / Long Term Contracts with committed delivery schedules. At the time of entering into Annual Contract, it should be ensured that substantial discounts are obtained from the supplier in view of the high volume of purchase. It should also be stipulated in the contract that these prices can also be made use of by other Units. Copies of such contracts should be sent to all the Units. Purchase Orders should be placed on the suppliers against this contract as and when required as per PRs with financial concurrence as stipulated in para 8.5.1.

6.13 To coordinate for registration updation / maintaining the approved list of vendors for

non-standard / non-production items once a year (preferably in April / May), registration format as per Annexure-4 shall be used.

6.14 To follow up with the suppliers, wherever supplies or settlement of claims / replacement

demands are pending on supplier’s account. 6.15 To undertake frequent reviews of systems and procedures as well as the operating

data. 6.16 Closed PO files shall be maintained as per prevailing policy of the company. However,

files can be scanned and kept in non-editable format also. 6.17 To have a structured procedure to evaluate vendors with reference to Quality, Delivery

and Service. This shall be carried out as per Annexure-5 at Unit / SBU level.

Note: Standards Department, in association with the Purchase and Quality Assurance Departments shall monitor the performance of the Preferred Suppliers in order to decide whether to renew or delete a Preferred Supplier in the subsequent listings of Preferred Suppliers.

6.18 All tenders should include a clause that tenderers who wish to be present for the tender

opening are invited to be present at the time, date and venue specified in the Tender enquiry / RFQ.

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All tenders / enquiries / RFQs shall be accompanied by BEL’s standard terms & conditions as per Annexure-6 (for Inland) or Annexure-7 (for foreign) as applicable.

7.0 CLASSIFICATION OF MATERIALS AND SUPPLIERS 7.1 CLASSIFICATION OF MATERIALS

Generally materials are classified based on the usage it is to be put through. The broad categories are:

1) Production Items. 2) Development Items. 3) Non-Production Items. 4) Capital Items.

7.2 CLASSIFICATION OF SUPPLIERS FOR PRODUCTION / DEVELOPMENT ITEMS

Suppliers are classified as: CATEGORY ‘A’ Preferred Supplier is as per AVD / Drawing and stockists / distributors with whom Annual Contract has been established or has a vendor rating of above 90%. This includes suppliers of proprietary items, licensors’ agreement items, etc. Enquiry shall be sent to all the sources. CATEGORY ‘B’ Where long term relationship is yet to be established and/or is in the process of establishment, enquiries are to be sent to a minimum of 3 sources (sources to be decided by Head Purchase), if possible, as per the AVD / Drawing / technically identified sources, and stockists / distributors. CATEGORY ‘C’ For development work where the Project Leader / Department Head / Divisional Head requires an item of a particular make and/or from a particular source as per catalogues or other sources of information.

8.0 DELEGATION OF POWERS **The delegation of powers (as per Office Order No. HO/144/011 dt. 15.03.2001 &

amended office order No. HO/144/020 dt 07.08.2011, circular no. 18252/D(F)/2011 dt. 16.08.2011 issued by D(F) & Office memo B-761 dt. 11.07.2011 from Company Secretary and amendments from time to time) for approval of purchase proposals to various levels of executives shall be made by the Authorised Officers, from time to time. The power sub delegated will depend on the classification of materials as explained in clause 7.1 and classification of suppliers as brought out in clause 7.2 above. However the extent of powers delegated shall not exceed the following limits:

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**8.1 MATERIALS NEEDED FOR PRODUCTION/DEVELOPMENT

LEVEL OF THE EXECUTIVE CATEGORY ‘A’ ‘B’ & ‘D’

`

CATEGORY C `

CASH PURCHASE

`

Section Head 2,00,000 50,000 5,000

Departmental Head 7,50,000 2,50,000 8,000

Divisional Head 15,00,000 5,00,000 10,000

a)Single vendor

More than 15,00,000

& Upto 1,00,00,000

More than 5,00,000 & Upto

1,00,00,000 ED/GM/SBUH/Unit Head b)Multi vendor More than

15,00,000 & Upto

2,00,00,000

More than 5,00,000 & Upto

2,00,00,000

15,000

a)Single vendor

More than 1,00,00,000 &

Upto 1000,00,000

More than 1,00,00,000 &

Upto 1000,00,000 *Director (BC)/ Director

(OU) b)Multi vendor More than 2,00,00,000 &

Upto 2000,00,000

More than 2,00,00,000 &

Upto 2000,00,000

20,000

a)Single vendor

More than 1000,00,000

More than 1000,00,000 Committee of

Functional Directors – D(BC)/D(OU)/D(F) b)Multi vendor More than

2000,00,000 More than

2000,00,000

* Functional Directors will be the Competent Authority to approve proposals in their respective functional

areas viz. Director (BC) for purchase proposals in respect of Bangalore Complex, Director (OU) for Purchase proposals in respect of Other Units, Director (R&D) in respect of D&E proposals from CRL, Director (HR) for proposals from HR function, Director (Marketing) & Director (Finance) for proposals from their respective functional areas. However in respect of BG and Other Units, Director (BC) and Director (OU) will be the approving authority for all purchase proposals across the various functional areas.”

**8.2 NON-PRODUCTION MATERIALS (Refer 9.2)

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* Functional Directors will be the competent authority to approve proposals in their respective

functional areas viz. Director (BC) for purchase proposals in respect of Bangalore Complex, Director (OU) for purchase proposals in respect of Other Units, Director (R&D) in respect of D&E proposals from CRL, Director (HR) for proposals from HR function, Director (Marketing) & Director (Finance) for proposals from their respective functional areas. However in respect of BG and Other Units, Director (BC) and Director (OU) will be the approving authority for all purchase proposals across the various functional areas.

Note 1: Spares for transport: Powers separately provided for emergency requirement up to Rs.3,000/-

at a time to Head (Transport) and Rs.10,000/- at a time with the approval of the Head (Services)

Note 2: GMs / SBU Heads / Unit Heads / Functional Directors will notify the executive who will be treated as Section Head/Department Head/Divisional Head. However, as a general guideline, Section Head Should not be below E II level, Department Head should not be below E IV level, and Divisional Head should not be below E VI level.

**Note 3: Purchase of direct or indirect materials valuing more than Rs. 2000 lakhs in each case of multi tender and Rs. 1000 lakhs in each case of single tender are to be approved by a Committee of Functional Directors. The detailed procedure to be followed in putting up such proposals to the Committee has been enumerated in Circular no. 18252/D(F)/2011 dated 16/08/2011 issued by D(F) & Office memo no. 761 dated 11.07.2011 from Co Secretary.

**8.3 CAPITAL ITEMS Exercise of powers for Capital purchases shall be restricted to EDs/GMs/Unit Heads/Functional Directors

in accordance with the following delegation of powers.

LEVEL OF THE EXECUTIVE Value of each case Rs.

a)Single vendor Upto 10,00,000 ED/GM/SBUH/Unit Head b)Multi vendor Upto 10,00,000

a)Single vendor More than 10,00,000 & Upto

100,00,000 * Director (BC) / Director (OU) b)Multi vendor More than 10,00,000 & Upto

100,00,000 a)Single vendor More than

100,00,000 Committee of Functional Directors – D(BC)/D(OU)/D(F) b)Multi vendor More than

100,00,000

Level of the Executives

Open Tender

`.

Limited Tender

`.

Restricted Tender

`..

Single Tender (Prop)

`.

Single Tender

(non-Prop) `.

Cash Purchase (Excl. Spares for Transport

`. Section Head Nil 20,000 10,000 20,000 2,000 1,000

Departmental Head

2,00,000 1,00,000 50,000 1,00,000 10,000 5,000

Divisional Head

10,00,000 2,00,000 1,00,000 2,00,000 20,000 8,000

ED/GM/SBUH/Unit Head

200,00,000 20,00,000 20,00,000 10,00,000 1,00,000 10,000

* Director (BC)/ Director

(OU)

More than 200,00,000

& upto 2000,00,000

More than 20,00,000

& upto 2000,00,000

More than 20,00,000

& upto 2000,00,000

More than 10,00,000

& upto 1000,00,000

More than 1,00,000 & upto

1000,00,000

20,000

Committee of Functional Directors

More than 2000,00,000

More than 2000,00,000

More than 2000,00,000

More than 1000,00,000

More than 1000,00,000

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* Functional Directors will be the competent authority to approve proposals in their respective functional areas viz. Director (BC) for purchase proposals in respect of Bangalore Complex, Director (OU) for purchase proposals in respect of Other Units, Director (R&D) in respect of D&E proposals from CRL, Director (HR) for proposals from HR function, Director (Marketing) & Director (Finance) for proposals from their respective functional areas. However in respect of BG and Other Units, Director (BC) and Director (OU) will be the approving authority for all purchase proposals across the various functional areas.”

(** amended Vide Office Order No HO/591/023 dated 16.09.2011) 8.4 SIGNING OF PURCHASE ORDERS

After the proposal for Purchase has been approved as per the delegation of powers in Para 8.1, 8.2 and 8.3, the following levels of Purchase Officers are authorised to sign the Purchase Order.

LEVEL OF THE EXECUTIVES All Purchase Orders upto Rs.

E I / E II 3,00,000 E III 6,00,000

E IV 15,00,000 E V and above FULL POWERS

8.5 REGULATION OF DELEGATED POWERS All the prescribed powers are to be exercised within the approved budget and with

financial concurrence as specified below: 8.5.1 CONCURRENCE AND VETTING OF PURCHASE ORDERS BY FINANCE

Sl. No. Category of Suppliers / Items If PO value exceeds Rs.

1 ‘A’ and where Annual Contract is established

1,00,000

2 ‘A’ and where Annual Contract not established

1,00,000

3 ‘B’ 1,00,000 4 ‘C’ 50,000 5 Non-production 50,000 6 Capital All POs

Note 1: It is to be ensured that in no case splitting of PO is resorted to, unless it is as

per MRP list.

Note 2: 10% of the total number of orders not vetted by finance department shall be selected at random, each month, by the Finance Department for thorough verification and reports put up to Management, with a view to improve the effectiveness and the integrity of the purchase transactions.

8.5.2 Cases of single tender of more than Rs.1 lakh per item in respect of Category ‘C’ shall

have the approval of GMs / SBU Heads / Unit Heads / Functional Directors. 8.5.3 Single responses to open tenders can be accepted by the competent officer as per

delegation of powers, provided rates are considered reasonable. In cases of single responses to limited tenders, however, re-tendering may be considered by including

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more vendors from the AVD. If, however, it is felt that there is no necessity for re-tendering and that the single response has to be accepted, it would need approval by an officer one step above the competent authority as per the delegation of powers, provided the rates are considered reasonable. Reasonableness of the price is to be based on past procurement experience, current market trends and/or technical estimate.

8.5.4 Powers for purchases based on 'Source Standardisation' and 'Brand Standardisation' in

the case of non-production materials shall be same as those applicable for limited tenders. The prescribed standardisation procedures have to be followed and the lists of 'Sources Standardisation' and 'Brand Standardisation' are to be periodically reviewed by the GMs / SBU Heads / Unit Heads / Functional Directors in consultation with Finance.

8.5.5 When there is a mix of items in a case for which tendering action has been taken under

different categories, either separate orders may be processed or appropriate approvals may be taken based on the aggregate values of the items coming under the respective tender categories and a single order could be released.

8.5.6 MOQ\ (Minimum Order Quantity ) / MOV (Minimum Order Value) / SPQ (Standard Packing Quantity ) / RL (Reel) can be ordered with the approval as indicated below.

Divisional Head – Upto Rs 10,000/- of value of additional quantity due to

MOQ / MOV / SPQ / RL GM/UH/SBU Heads – Full Powers

#8.5.7 Procurement of items more than the quantity required in view of criticality /

obsolescence / last time buys / hard to find device / MOQ due to opening of closed production line etc. shall be ordered with the approval as indicated below:

GM/UH/SBU Heads - For each line item value upto ` 5,00,000/- Functional Directors - For each line item value upto ` 20,00,000/- Chairman & Managing Director - Full Power.

(# Added vide O.O.No. HO/591/022 dtd. 04.05.2012) 9.0 SOURCING OF MATERIALS 9.1 MATERIALS REQUIRED FOR PRODUCTION / DEVELOPMENT 9.1.1 Items, which have been provided for procurement from a Licensor in terms of a

Technical Collaboration Agreement, need not necessarily be treated as proprietary if there is a provision for obtaining them from other sources at the option of BEL. In the later case, market research to establish other sources will have to be taken up. If it is proposed to buy the items from the Licensor pending the establishment of other sources, the same may be treated as category 'A' supplier item under the delegation of powers. In case OEM regrets or directs, items can be procured by the Purchase Department from the authorised stockists, distributors and licensees / dealers. The list of such suppliers shall be maintained by the Purchase Department.

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9.1.2 In all cases, other than category ‘C’ procurement, where the Indentor proposes contacting only one source the Indentor / PR raising officer shall clearly record and communicate to the Purchase Department as follows:

a) Whether it is a proprietary item or an item to be procured only from the

Licensor; or b) It is a non-proprietary item as per the License Agreement but proposed to be

bought only from the Licensor / Sources recommended by Licensors for reasons to be recorded; or

c) It is not connected with any License Agreement but has only one source designated/established; or

d) It is an item having more than one source but it is proposed to contact only one source, for reasons to be recorded and approved by Head Production / D & E.

9.1.3 The consumables used for production which cannot be directly accounted against

production are to be treated as production material for procurement purpose and delegation of powers shall be as per para 8.1.

9.1.4 The delegation of powers for approval of purchase proposals involving procurement

of medicines, hardware items related to operation theatre and laboratory items shall be as per para 8.1.

9.2 SOURCES FOR NON - PRODUCTION MATERIALS 9.2.1 Non Production Items can be broadly classified as follows:

a) Item not forming part of Bill of Materials (BOM). b) Electrical, Mechanical and Civil Engineering Maintenance Materials. c) Building construction materials like steel, cement, building hardware etc. d) Oils, Chemicals, Consumables and other factory requirements. e) Stationery, Printing materials and other office requirements. f) Provisions and other Canteen requirements. g) Administrative / welfare related items like uniforms, gifts and other requirements

of offices such as appliances, gardening materials, etc. 9.2.1.1 The establishment of sources in respect of non-production items should be processed

according to the nature of the market, for each type of material and list of suppliers should be drawn up and maintained by the Purchase Department.

9.2.1.2 For this purpose, reference to directories, handbooks, yellow Pages, insertion of

advertisements in the press, calling for registration, drawing from lists of other organisations, etc. can be adopted as appropriate. Where only one or two approved sources exist for an item, market research should be made to identify more sources.

9.2.1.3 Where non production items are covered under quality / safety / health certification by

ISI / BIS & by other government approved agencies, procurement of such items shall conform to such quality / safety / health certifications.

9.2.2 Source standardisation, subject to provisions of above para 9.2.1.3, may also be

advantageously adopted for canteen items like provisions, oil, milk, bread and general consumables. Annual contracts may also be entered into for such items

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wherever possible, after obtaining sanction of the GMs / SBU Heads / Unit Heads / Functional Directors.

9.2.3 In the case of maintenance requirements and consumables, the offers should be

invited from manufacturers of reputed brands, subject to provisions of para 9.2.1.3, indicating the schedule of requirements, specifications in the tender enquiry preferably by following two bid system. The committee consisting of Purchase, Finance, Indenting / User Department and other concerned Departments (like Quality Control) to be nominated by the GMs / SBU Heads / Unit Heads / Functional Directors, shall evaluate the offers received. The contract may be entered up to a period of two years with the firm recommended by the committee.

9.2.4 Spare parts for vehicles, etc., which are of proprietary nature or which do not have detailed specifications to permit source diversification, may be procured as far as possible directly from the respective manufacturers or sole selling agents. In cases of urgent requirements or where the manufacturers or sole selling agents regret availability, they may be purchased from local dealers. Manager, Transport is authorised to procure from the panel of suppliers up to Rs.10,000/- at a time, and up to Rs.20,000/- at a time with the approval of the Head Services not below EVII level. Panel of suppliers is to be drawn up by the Unit with the concurrence of Finance. Beyond this value, a team of executives from Purchase, Transport, Inspection and Finance Departments, may be deputed for making such purchases.

9.3 CAPITAL ITEMS

Capital Items are classified as follows: a) Plant and Equipment. b) General purpose machines and special machines. c) Test Equipment. d) Office Equipment and Furniture including industrial furniture. e) Vehicles.

f) Items required for services other than civil works.

The approval for procurement of capital items shall be as per the norms laid down in the Budget Manual, Sub-Delegation of Powers and their amendments and revisions.

9.3.1 For capital items other than vehicles, detailed specifications of the items finalised by

the respective committees, shall be forwarded to Material Control for issue of PR. Purchase shall issue Enquiries / Tenders for obtaining quotation through two bid system i.e., techno-commercial bids and price bids separately.

The techno-commercial bids received against the enquiries / tenders will be evaluated

by technical evaluation committee constituted for the purpose. The committees will consist of Purchase, Finance and nominated technical member. After acceptance of techno-commercial bids by the technical evaluation committee, the price bids of only techno-commercially qualified tenderers shall be opened. Lowest tenderer (L1) may be called for negotiation, if required. The detailed guidelines are given in para 16.0.

9.3.2 The purchase of office equipment, industrial furniture etc may be finalised in the

normal manner after sending enquiries to firms in the approved list of suppliers. The approved list of suppliers shall be prepared by a committee to be constituted by the Unit Head consisting of Purchase, Finance and nominated member of the Furniture Committee. In case an item is standardised in terms of a specific make / brand, it can

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be procured from the manufacturer / sole selling Agent or from authorized dealers (to be tried in that order) after obtaining quotations.

9.3.3 In the case of general-purpose vehicle (bus/truck, car, van, moped / scooters)

sanction of the competent authorities for standardisation in terms of specific makes / brands will be issued by the Corporate Office from time to time. Any lease arrangements needed will also require the approval of the Corporate Office. Purchase Requisitions for special purpose items like battery operated trolleys with / without lifts/fork lifts will be processed as per requirement of Units / SBUs material handling requirements / Plant and Equipment items.

9.4 DEVELOPMENT OF ALTERNATE SOURCES AND IMPORT SUBSTITUTION 9.4.1 ESTABLISHMENT AND DEVELOPMENT OF ALTERNATE SOURCES: In addition to the sources covered by the AVD / BEL drawings, other sources also can

be contacted separately, for market research purposes. Offers received from non-approved sources may also be considered after evaluation of their offers for trial orders. These new sources could be brought in the approved list after they meet the qualitative requirement and vendor rating.

9.4.2 Development of alternate sources may be resorted to in cases where BEL is not sure

of the capacity of an existing indigenous manufacturer., It may be necessary to place a trial order for a small quantity on another indigenous manufacturer who has responded to the market research or Regular Enquiry, preferably on the same terms as given to the main supplier. Such orders may be placed either against the existing PRs for bulk quantity, or after obtaining a special sanction of the GMs / SBU Heads / Unit Heads / Functional Directors.

9.4.3 IMPORT SUBSTITUTION:

For indigenous development of imported items, particularly of high value / high consumption items, BEL will institute market research periodically either by way of advertisements or by way of enquiries, to probable suppliers, indicating the general nature of the items, their broad specifications, the estimated annual off take, etc. The probable suppliers should be called upon to register their names with BEL so that the drawings / detailed specifications may be forwarded to them, as and when needed, for undertaking the development of the items and forwarding samples for approval. Trial order may be placed, if samples are found satisfactory. After the first batch supplies are found meeting evaluation criteria, the names of the suppliers may be included in the List of Approved Sources figuring in BEL Standards / Purchased Part Drawings so that future enquiries may be addressed to them also automatically.

10.0 ISSUE OF PURCHASE REQUISITIONS 10.1 PURCHASE REQUISITIONS (PRs) While issuing the Purchase Requisition, the Indentor shall ensure that all vital

information are incorporated. The details required are as follows: (See Annexure-1)

a) BEL Part No./ Drawing No. with issue level / Specifications / Description. (In the absence of the above, details of item / Supplier’s reference / part

number). However BEL Part No. is mandatory. b) Sale Order / Internal Order/WBS element.

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c) Unit and Quantity required. d) Delivery Schedule (item wise). e) Previous Purchase Order reference, Unit Price of Item, qty. f) Suggested supplier, if any.

10.2 LEAD TIME All PRs should allow sufficient lead time for the purchase activity to be completed,

based on the market situation, norms laid down for inventory holding and other relevant factors.

10.3 MATERIALS FOR PRODUCTION

PRs in respect of material required for production should be issued by the relevant Material Control Department/Production Control. Wherever material indenting has been computerized, MRP/ERP list duly authenticated by concerned Material Control/Production Control could be used in lieu of PR.

10.4 ITEMS MANUFACTURED IN BEL In respect of the items which are manufactured in the various Units / SBUs of BEL, the relevant Material Control Department may first ascertain the procurement cost of the items before issuing CMR.

10.5 ITEMS REQUIRED EXCLUSIVELY FOR RESALE PRs for items for resale will be issued by Material Control, in co-ordination with the Sales Department/Production Control, on the basis of the Sale orders issued against indents from customers.

10.6 MATERIALS FOR ANTICIPATED CUSTOMER ORDERS Materials for the manufacture of Equipment / Spares can be ordered against anticipated customer orders, provided the approval of management is obtained for advance ESO.

10.7 ITEMS FOR DEVELOPMENT DEPARTMENTS For items required by the Development Departments, PRs shall be routed through Material Control except for urgent requirements as indicated in Para 11.8.

10.8 SMALL TOOLS AND METROLOGY ITEMS

PRs for regular consumption items of small tools like drill bits, taps, etc. will be issued by the relevant Material Control Department in consolidated manner once a year on the basis of previous year’s consumption and stock on hand. The quantities needed should be rounded off to the multiple of the standard packaging in which these items are supplied. For other special items of small tools and metrology, the requirement should be projected by the concerned Departments and PRs issued by the relevant Material Control Department after consolidation.

10.9 NON-PRODUCTION MATERIALS PRs for non-production materials will be issued by the relevant Material Control Department once a year or as deemed necessary on the basis of the previous year's consumption and stock on hand/based on input from Indentor, providing for staggered deliveries/consolidation of requirements.

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10.10 CAPITAL ITEMS PRs for capital items shall be issued by Material Control based on the input given by

the respective committees / Indentor. 11.0 MODES OF PURCHASE

The modes of purchase to be adopted have been indicated in the section of Delegation of Powers at Para 8.0. Further details are given below.

11.1 OPEN TENDER 11.1.1 Open Tenders are invitation to tenders by public advertisement and also put on the

BEL and NIC websites. A single insertion issued in the press giving briefly the description of the item giving reference to BEL website, normally will be sufficient. The list of News Papers will be decided by the Purchase Department in consultation with Finance depending upon such factors as the value of the tender, the coverage required to attract competitive offers, etc. A copy of the tender notification may also be circulated/e-mailed to all the suppliers in the approved list maintained by the Purchase Department. In case of global tenders, the notice will also be published in Indian Trade Journal and sent to Indian Missions abroad deemed necessary for adequate response in addition to the press advertisement and BEL website.

11.1.2 Open Tenders shall be resorted to in case of non-production materials estimated to cost Rs. 50 lakh and above. The time allowed for receiving quotations against Open Tenders can be fixed, depending upon the geographical area covered, effort required to be put in by the tenderers and other relevant factors, however shall not be less than 10 days.

11.2 PURCHASES THROUGH DGS&D RATE AND RUNNING CONTRACTS

This refers to items for which DGS&D rate contracts exist and either an indent is placed on the DGS&D or a supply order in the prescribed form (DGS&D or BEL) is placed directly on the supplier at the DGS&D Rate Contract prices. Financial limits for such proposals shall be as for Open Tender / category ‘A’. When an item with required specification is available on DGS&D Rate contract, it should preferably be procured from that source on DGS&D Rate. If item is proposed to be procured from the other sources, even though it is available on DGS&D Rate contract, the specific reasons should be recorded and approval of the next higher authority should be obtained.

11.3 LIMITED TENDER 11.3.1 Limited tenders are those addressed to all the parties in AVD / BEL drawings / PRs

and in the Approved List of Suppliers maintained by the Purchase Department. In case of category C items for development works, the vendors suggested by D&E

/ R&D in the PR may also be contacted for tender enquiry. 11.3.1.1 In AVD / drawing and in approved list of suppliers, if only one source is available,

then financial power for the purposes of approval of purchase proposals will be same as that applicable to single tender purchases.

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11.3.1.2 The time allowed for receiving limited tender quotations may vary, depending upon the geographical area covered, effort required to be put in by the tenderers and other relevant factors, however shall not be less than 3 days.

11.4 RESTRICTED TENDER 11.4.1 Restricted tenders are those which are addressed only to i) some of the parties in the

approved list or ii) to parties not in the approved list or iii) in the absence of approved list. In all cases other than those mentioned below, the reasons for restricting the parties should be recorded.

11.4.2 For non-production items whose estimated cost is above Rs.1,00,000 enquiries may

be limited to 10 suppliers and for items estimated to cost below Rs.1,00,000 to 5 suppliers (subject to a minimum of 3 vendors in both the cases), invariably including those whose quotations had been found to be lower against earlier tender enquiries. Where an approved list exists, those figuring in the list should be preferred to other parties.

11.4.3 If response to the proposed tender enquiry is expected to be poor on the basis of

previous experience or otherwise, the above limits for the number of parties may be exceeded and more parties can be included as felt necessary.

11.4.4 The time allowed for receiving quotations against restricted tenders shall be on the

lines allowed for limited tenders. 11.5 SINGLE TENDER

Single Tender is inviting quotes from single vendor. This may arise in the following circumstances:

1) The cases of proprietary items. 2) When tender enquiry is addressed to only one party, even when the AVD /

approved list / BEL drawing has more than one source of supply for that item. 3) When a specified source is indicated in license agreement / collaborator

agreement / customer requirement / recommended by licensor / collaborator. 4) For emergent requirement, items (including non-production items) procured on

single tender basis can be regularised after taking approval from authority one level higher, giving due justification. The financial limits shall be applicable as per delegation of powers mentioned in para 8.1 and 8.2.

#Note: In case of Single response to competitive bidding (resultant single vendor),

approval from authority one level higher to be obtained.

(# Re-casted vide office Order No. HO/591/022 dated 17.06.2011)

11.5.1 While proposing procurement on single tender basis in the case of clause 2) of para 11.5 above, approval from authority one level higher should be obtained giving justification.

***11.6 Repeat Orders Repeat Orders of upto 100 % of the original value may be placed within 12 months of

the original order date, at the original order price, as per delegation of powers (as per

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the table below) provided i) the original order has not been placed on “time preference” and ii) it is certified by the ordering authority that there has been or there is likely to be no downward trend in the market price for the item/s

Level of the Executive

Repeat Order, PO Value upto

` Divisional Head 3,00,000

a)Single Vendor 100,00,000 ED/GM/SBUH/Unit Head b)Multi Vendor 200,00,000 a)Single Vendor 1000,00,000 * Director (BC) & Director

(OU) b)Multi Vendor 2000,00,000

* Functional Directors will be the competent authority to approve proposals in their respective functional areas viz. Director (BC) for purchase proposals in respect of Bangalore Complex, Director (OU) for purchase proposals in respect of Other Units, Director (R&D) in respect of D&E proposals from CRL, Director (HR) for proposals from HR function, Director (Marketing) & Director (Finance) for proposals from their respective functional areas. However in respect of BG and Other Units, Director (BC) and Director (OU) will be the approving authority for all purchase proposals across the various functional areas.”

(*** amended vide OO No. HO/591/023 dated 16.09.2011) 11.7 LOCAL / CASH PURCHASES BY PERSONAL ENQUIRY 11.7.1 This refers to the purchase of urgent requirements based on personal enquiry made

by a team (with or without obtaining written quotations) from one or more selected suppliers, preferably those on the approved list. Other procedures like placement of orders, ICRR / GR procedure, etc. shall be as per normal purchases.

11.7.2 Cash Purchase by personal enquiry may be done as per delegation of powers in 8.1

and 8.2. The value limit for each cash bill/purchase bill will be Rs. 3,000/-. This will be regularised with Material Receipt Report (MRR)/MIGO Transaction in SAP enclosing valid Cash Bill / Receipt. The receipt of material has to be endorsed by Security on the original bill/ invoice.

11.8 OPEN PURCHASE ORDERS FOR EMERGENT REQUIREMENTS 11.8.1 In emergencies, open Purchase Orders can be placed without obtaining prior

quotations and subject to prices being negotiated and agreed upon. However, all such cases will require finance concurrence and approval by not below E V level in cases up to Rs 50,000 and not below EVI / EVII level in cases beyond Rs 50,000/- up to Rs 1,00,000, not below GM / SBU Head /Unit Head in cases beyond Rs 1,00,000 upto Rs. 2,00,000 and Functional Directors will have full powers upto Rs. 10,00,00,000. Operation of such open orders should be resorted to only in the case of Licensors or other similar proprietary cases where only one supplier is available.

11.8.2 While placing an order on an approved supplier for a large number of items, if prices

are not available for a few items, such items may be included in the order on the basis of ‘prices to be settled’. In such cases also, the procedure will be the same as in 11.8.1.

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11.9 DIRECT ORDERS FOR ITEMS REQUIRED BY D&E DEPARTMENTS #11.9.1 For expeditious execution of D&E work, Heads of D&E Departments / D&E Project

Heads (not below EVI level) may authorise direct purchase of their urgent requirements by oral enquiry up to Rs.10,000/- per order subject to ceiling of Rs.25,000/- per month. Letter orders in duplicate will be forwarded to the concerned supplier with a copy to the Accounts Department (Bills) quoting the work order reference, being the sanction for the purchase. The supplier will supply the material along with a copy of the letter order and the satisfactory receipt of goods will be endorsed by the Indentor. The supplier thereafter will submit his bill along with a copy of letter order for payment. The concerned D&E Department shall maintain a record of the transactions under this procedure and a statement submitted to the Management every month. The Indentor should suitably amend the PR if any, issued accordingly against this requirement. Material received by letter order is to be certified by Security.

#Note: Where there is no separate D&E Department and the D&E work is part of the

Production Department, the Head of concerned Production Department shall exercise the powers of Head of D&E / D&E Project Heads as provided for, in this sub-para.

#11.9.2 The Head of the Prototype Shop / customer support (not below E VI level) can also

issue such letter orders for purchase by oral enquiry up to Rs. 10,000/- per order subject to a ceiling of Rs. 25,000/- per month on behalf of Managers of D&E Departments / customer support wherever necessary. The Head of the Prototype Shop / customer support will arrange to obtain, on the copy of the letter order accompanying the materials delivered by the supplier, an endorsement from the concerned Manager of the Indenting D&E Department / customer support Department, that the material supplied is acceptable to him before he certifies the receipt of materials on the order copy for payment purposes. Material received is to be certified by Security. The Head of the Prototype Shop / customer support shall maintain a record of the transactions under this procedure and a statement submitted to the Management every month.

(# Substituted vide Office Order No. HO/591/025 dated 26.10.2011)

11.9.3 SERVICE ORDERS

To save additional expenditure on repairs it is desirable to project the requirement of AMC in the RFQ at the procurement stage itself of goods / equipment. This will avoid necessity of calling a separate tender for AMC just after expiry of warranty period and incurring additional expenditure on repairs.

11.9.3.1 SERVICE BEYOND WARRANTY PERIOD Materials procured earlier and out of warranty, but needing repairs will be repaired through a Service Order on a chargeable basis through OEM/ Authorised service centres. User /Indentor will liaise with OEM / Authorised service centres and competent service agency where OEM / Authorised service centres are not available and get the details of Repairs / Inspection charges by giving the detailed defect report. A letter will be sent by user / Indentor to Material control / Stores to raise the service request to Purchase department. Management approval will be taken by Purchase department after getting the service request. After Management approval,

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a Service Order will be generated by purchase department, with same delegation of powers as for the placement of Purchase Orders. This clause is also applicable for orders covering training, testing, installation and commissioning etc., However, RBI guidelines shall be followed in case of foreign vendors.

11.9.3.2 SERVICE WITHIN WARRANTY PERIOD

However, for procurement of spares / service within the warranty period user will send a letter to Purchase department / Initial procurement agency for service and supply of spares. Purchase / Initial procurement agency will coordinate with Supplier / User / Stores for service / supply of spares which are covered within the warranty. If some spares are required for service which are not covered in the warranty, a separate procurement action will have to be initiated.

11.9.3.3 AMC For AMC, separate service order will be released by Department authorised by Unit / SBU Head / Management. by following works contract procedure.

11.9.4. e – PROCUREMENT ‘e-procurement’ may be resorted to in stages for procurement of Production, Non-Production and Capital items, keeping in view the requirement to maintain confidentiality and secrecy of the content of the data and information. Items, which are of sensitive nature from the point of view of national security or from the point of view of national interest, need not be procured through e-tendering. All such cases shall be put up to Chairman & Managing Director (CMD) for approval for procurement by other than e-tendering. The requirements of vigilance with respect to the issue of tenders, opening of tenders and providing transparency in the tendering process shall be addressed in the software. The Purchase Executive shall ensure that all the suppliers who are eligible to receive and quote for the tender are included in the list of suppliers while providing the PR data. The PR data containing details of the PR No., part No., description, unit, quantity, suppliers’ part No./ reference, expected delivery period, particulars of suppliers (e-mail id is mandatory) shall be uploaded on to the website. Additional information may be provided in the remarks column in text form. Enquiries are sent by the system, to all the suppliers as per the list in the PR, by e-mail. The suppliers shall visit the website and quote for the items. The supplier may supply any further information or conditions in text form. The committee constituted for opening of the tenders shall electronically open the tenders on the scheduled day and time. In case of quotes received from local suppliers, the details of excise duty, sales tax and other applicable taxes shall be provided by the Purchase Executive, wherever necessary. In the case of imports, the currency conversion rate shall be provided by the Purchase / Finance Executive. Any additional costs, like customs duty, to be considered before generation of the comparative statement of quotes shall also be put into the system.

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The comparative statement of quotes shall be examined, checked and vetted and negotiations shall be held with L1 only, if required. In case of Open Tender, access to quote for the tender is available to all who visit the website. In case of limited tenders, the suppliers identified shall be issued with a password to enable them to submit the quote. ‘e-sourcing’ shall be resorted to by the Purchase Executive, with a view to enhance the supplier base and ensure adequate competition. The details of the websites visited for this purpose shall be maintained PR-wise. In case of two-bid system, techno-commercial and price bids should also be uploaded at the same time in different formats as required. The e-procurement software should have provision for this. The software should also have provision for comparison of price quotes of technically qualified bidders only after the specifications have been frozen. Separate office order regarding implementation of e-procurement will be issued.

12.0 TENDER COMMITTEES To facilitate expeditious processing of tenders, the GM / SBU Head / Unit Head may constitute Tender / Purchase / Price negotiation / Technical Evaluation Committee with representatives of Purchase / Finance / D&E / Indentor as required. Such committees may be appointed for a period of one year. Tender opening schedule may be decided by respective Units / SBUs / Other Offices.

12.1 RE-TENDERING If no / inadequate response is received against a tender, the tender opening date may

be extended to the next opening day as decided in consultation with the concerned purchase executive and all the vendors to be informed to this effect. In case of open tenders extension of tender opening date will also be published in the press / website. Even if single response is received after extension, the same may be considered for processing of PO. In case there is no response, after extension, re-tendering is to be resorted to. Even a single response received against such re-tendering, shall be considered for processing of PO.

Re-Tendering is not applicable for Single Tender (proprietary items). Re-tendering may also be resorted when the price bids received are found not reasonable or where ring is suspected.

12.2 RE-TENDERING IN CASE OF PRICE SENSITIVE SUPPLIES

At times BEL may be required to supply products at short notice to Government Departments like DOT, which are highly price sensitive. In such situations where the success of the tender largely depends on the ability to procure materials within the limited time and lowest material cost. On receipt of tenders, if it is found that the prices quoted are very high or abnormal, the same may be re-tendered with specific approval of GM / SBU Head / Unit Head. While re-tendering, the Purchase Department may indicate target price so that the tenderers who are interested only will participate in tendering.

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If L1 supplier backs out after negotiation / after placement of order, re-tendering shall be resorted to.

13.0 SECRECY PROCEDURES 13.1 All suppliers (except in case of tender / enquiry through fax and e-mail) shall be

required to submit their tender / offer in sealed covers indicating the enquiry number and the closing date on the cover. The tenders will be deposited in the tender box kept in the designated place as mentioned in the tender enquiry. Tenders opened inadvertently due to the non-indication of enquiry number on the sealed cover should be put up to the Head Purchase Department and after his initials on the tender and the cover, resealed in a cover indicating enquiry number and closing date and deposited in the tender box. All tenders shall be opened by a committee consisting of Executives from Purchase and Finance. The representatives of the tenderers may be allowed to be present at the tender opening. In the case of tenders / enquiry by e-mail / fax, the Purchase Department shall give time limit of minimum 24 Hrs as closing time. This should be resorted only for production items and urgent requirements of non – production items, by recording the reasons. Quotation received by e-mail / fax for all tenders shall adhere to the following secrecy norms.

1) A dedicated fax machine to receive the quotes shall be deployed. 2) Designated executives (from purchase and finance departments) shall collect

the quotes received and put them in a sealed envelope after initialling the quotes and recording the tender reference on the envelope and put in the tender box.

3) In case of quotes received through e-mail, the dual password (designated officials from purchase and finance departments) may be adopted to download and print the quotes. The same executives shall collect, initial and put them in a sealed envelope. After recording the tender reference on the envelope, put them in the tender box.

13.2 TENDER OPENING:

As soon as the tenders are opened, the names of tenderers, dates, presence of tenderer’s representatives, any omissions / corrections noticed, etc. shall be recorded in the tender opening statement and signed by all the members of the committee. The committee shall also initial every page of the tenders, circle and initial all money value figures, attest corrections made in tender, if any, and cross out all the blank spaces against items in the tender.

14.0 LATE TENDERS: No late tenders shall be entertained. 15.0 PROCEDURE FOR ARRIVING AT L1 15.1 The detailed comparative statement of the prices and conditions shall be prepared by

the Purchase Department and vetted by the Finance Department to form the basis for decision on L1. While arriving at the L1, the following factors shall be considered:

1) All duties and taxes. 2) Delivery schedule as per RFQ conditions. 3) All elements of cost for receipt of material at BEL / Site, as per tender

conditions.

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4) In case of advances being paid to the vendor, the cost of advancing as per circular No.18281/99/010-001 dated 28-02-2007 (Annexure-8) 18281/99/010-009 dated 17th July 2008, 18281/99/010-006 dated 22nd April 2009 and amended from time to time.

5) Other payment terms, if any. 15.2 GROUP OF ITEMS

In order to arrive at the lowest Tenderer in case of supply of group of items / kits, the overall rates quoted for all the items together shall be taken into account. Before resorting to this procedure a Clause should be included in RFQ, identifying the items to be grouped together.

16.0 GUIDELINES FOR NEGOTIATION

Normally negotiations shall not be conducted. In exceptional cases negotiations may be conducted with L1, with the approval of the approving authority as per Clause 8.1 and 8.2. and as per the guidelines issued in this regard. This should also be communicated to the tenderers, while issuing request for quotation (RFQ).

16.1 TWO BID SYSTEM

Wherever, the bids are invited in two parts viz., “Techno-commercial bid” and the “price bid” they are to be submitted in separately identifiable sealed covers simultaneously, both put in another envelope, giving reference to RFQ. Techno-commercial bid ensures compliance of the Technical specifications as well as the requirements of Commercial nature as specified in the RFQ. In the first instance, only the techno-commercial bid will be opened and in case of any queries in respect of Techno-Commercial bids, the bidders can be called in a predetermined time and issues are discussed. In case techno-commercial specifications are modified, all the bidders should be asked to submit in writing, giving the revised specifications and to submit the revised price bids, if any, before the predetermined time. The deliberations with the bidders have to be recorded. The price bids of only those vendors who qualify the techno-commercial requirement are opened and the price bids of remaining unqualified bidders should be returned unopened. Only the techno-commercially qualified bidders may be invited to participate in price bid opening. Once the price bids are opened, the Purchase Officer at a mutually convenient date and time invite L1 bidder for negotiations, if required.

**16.2 The estimated price should be based on scientific analysis. In case the quoted price is more than the estimated price, negotiations may be held with the lowest tenderer if the difference observed between the estimated price and the price quoted by the tenderer is not justifiable.”

However, if it is found that price bid is abnormally high, then retendering may be considered after reassessing the estimates prepared. Vendor called for negotiation should be informed that an opportunity is given to improve the bid but at no stage should the prices be increased or makes conditions more unfavourable to the company.

(** Initial sub-para of 16.2 substituted vide Office Order No. HO/ 591/022 dated

17.06.2011)

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16.3 All negotiations shall be conducted jointly by officers of the Purchase and Finance, associating if necessary, the Indentor or any other Department. The composition of the negotiating committee will be decided by an officer who is one level higher than authority competent to accept the purchase depending on the merits of each case.

16.4 Negotiation through phone / fax / e-mail is permitted. 16.5 ACCEPTANCE OF TENDERS

The lowest technically acceptable quotation received must invariably be compared with the previous purchase prices, if any, and the increase / decrease in the unit price in terms of percentage should be recorded in the comparative statement. The previous purchase price should be updated to reflect the market trends and current conditions. Decision to negotiate with L1 shall be taken after comparing the L1 price with updated previous purchase price / estimated price. In case of new items, the reasonableness of the prices quoted must be gone into, based on as much data as can be collected in each case, before the offers are accepted. In case the Purchase Department is not convinced of the reasonableness of the price they may refer the case to the Indentor for alternate item / changes in specification. In both cases of changes in specification and / or alternate items and unreasonableness of price, retendering shall be resorted to.

16.6 In cases of limited tenders, lower offers strictly as per specifications detailed in the enquiry cannot be rejected on the ground that the supplier is not considered dependable. Even in open tender cases, such offers should not be rejected unless the same is proved by the vendor performance record either with the company or as ascertained from other leading customers for the product. If past performance of certain tenderer is not up to mark, such tenderer may be eliminated from tender after due justification. In case the lowest tenderer is a new comer to BEL and if there is an element of doubt about his capability to execute the order quantity, particularly in the case of critical items having large quantity requirements, place the order on the L1 who is the new vendor to the extent of his capability to supply. The remaining quantity shall be retendered. However, in case of open tender it is advisable to go through evaluation / prequalification stage where capability, dependability can be verified and established.

16.7 If splitting of the requirement would be to the advantage of the Company in maintaining

the time schedule, the same should be decided before calling for tenders. In all such cases, the same should be made clear to all the tenderers while calling for the tenders. Where it becomes necessary to split the order, the order may be split on L1 and higher bidders in ascending order of their quotes at L1 rates. Refer to circular No. 21326/18/07-08/CO-VIG dated 31st May 2007 (Annexure-9).

16.8 In cases where manufacture / approval of sample is necessary before placement of

the order, the following course of action may be adopted:

a) Order should be placed on the lowest tenderer, only after approval of the sample.

b) If time is not available for (a) but there is adequate level of confidence, the order may be placed on the lowest tenderer with instructions to submit samples for approval before making bulk supplies.

c) In case both the time or level of confidence is not available and material is urgently required, retendering may be resorted to.

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16.9 PRICE PREFERENCE TO CENTRAL PUBLIC SECTOR UNDERTAKING / SMALL

SCALE SECTOR / OTHERS Guidelines regarding price preferences for particular categories of suppliers, as issued by the Government of India, from time to time, may be kept in view while taking purchase decisions.

16.9.1 Government guidelines on purchase preference for Central Public Sector Undertakings are issued from time to time. It is to be noted that ban on the post tender negotiation does not mean that policy of Government of India for purchase preference for Public Sectors should not be implemented. In such cases CPSUs though not L1, may be considered as per Government guidelines in force. Under no circumstances CPSUs should be used as a shield or a conduit for getting costly inputs or for improper purchases. Justification on economic and other grounds should be gone into before considering such proposals.

17.0 MODES OF TRANSPORT All materials should normally be transported by the cheapest mode of transport with due regard to the safety of the materials. However, sensitive electronic equipment and components may be air freighted to avoid damage / deterioration likely in transit. The mode of transport of all major items should be in line with the mode of transport adopted for pricing the finished product. If, however, any material is required urgently or if there is difficulty or delay in transporting by the cheapest mode of transport, a quicker mode of transport including airfreight may be sanctioned by the Head Purchase with financial concurrence. All consignments to be brought through approved freight forwarder / transporter / agency. Wherever approved contract carriers are not available, then the item may be brought by any available free carrier with the approval of Head Purchase with financial concurrence. However if the freight charges exceeds 20% of material cost, approval of GM / SBU Head / Unit Head / FD shall be obtained. This should normally be done before despatch of goods and post facto approval to be avoided. Hazardous materials shall be transported as per the prevailing Government / International regulations.

Annual / biennial contracts should be entered into for movement of inward / outbound goods by sea / air / road / rail / any other means after following the works contract procedure.

18.0 TERMS OF PAYMENT FOR INDIGENOUS SUPPLIERS 18.1 Payment shall be generally made through ECS / EFT. Payment by Account Payee

crossed cheque / Demand Draft may be resorted to only in exceptional cases after recording the reasons.

In case of Category ‘A’ suppliers, the payment shall be made within 15 days from the

date of receipt of materials against supplier’s bills as per accepted ICRRs/ GRs. In other cases, payment shall be made promptly for accepted quantities against supplier’s bills which should be within maximum limit of 30 days from the date of receipt of materials / submission of bills whichever is later. The maximum limit of 30 days will cover all activities connected with payment, viz. Inward goods receipt / inspection, stores receipt, forwarding and payment of bills.

However, the maximum limit of 30 days will not apply in cases where payment terms and conditions of Purchase Order provide for payment period exceeding 30 days.

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18.2 Local collection against delivery of cheque should normally be avoided. The suppliers

may be prevailed upon to accept cheques / payment through ECS / EFT within 30 days from the date of collection of goods. In such cases, suppliers should be asked to hand over their bills along with the materials, and the Stores Department should forward the bills, duly certified by the authorised officer in Stores Department, to the Accounts Department for sending the payment to the supplier within the stipulated period.

In case of collection against delivery of cheque, no payment should be made unless the goods are inspected and found acceptable as per the specification and payment terms and conditions are met.

18.3 Advance payments, along with the Purchase Order or at intermediate points, should

not be entertained. In exceptional cases, where supplier insists upon such advance payment, the same may be followed as per management guidelines issued vide circular Nos. 18281/99/010-001 dated 28-02-2007 (Annexure-8), 18281/99/010-009 dated 17th July 2008, 18281/99/010-006 dated 22nd April 2009 and amended from time to time.

18.4 The performance of the supplier against previous orders should invariably be

reviewed by the Purchase Executives at the time of recommending fresh order on them. In this context the outstanding amounts / claims due from the supplier on account of rejections / shortages in the previous supplies should invariably be checked.

18.5 In the case of controlled items where the distribution is controlled by Government

agencies and the suppliers insist on full payment in advance along with the order, the same may be agreed to by the officers competent to approve the purchases with the financial concurrence.

18.6 Payment through bank against despatch documents should not be agreed unless it is unavoidable. However, if vendor insists on such payment terms, then pre-despatch inspection clause should be incorporated in the Purchase Order. The pre-despatch inspection can be made by BEL / nominated agency / certifying agency or by vendor himself if he is specifically authorised for self inspection. Payment of pre-despatch inspection charges will be as mutually agreed. All bank charges should be to supplier’s account. However, efforts must be made to persuade suppliers to accept BEL’s normal terms / COD basis.

18.7 In case of procurement involving capital goods and items of long term performance,

the purchase department shall ensure to obtain bank guarantee towards performance covering the warranty period. The amount of bank guarantee may be decided and suitable clause shall be incorporated in the RFQ to that effect.

19.0 TERMS OF PAYMENT FOR FOREIGN SUPPLIERS 19.1 Payment should be arranged against shipping documents either on Sight Draft basis

or Letter of Credit (LC), depending upon the agreed terms of payment, through any foreign bank but the same should be presented to BEL only through the company’s bankers for authorizing payment. Letter of Credit should be established only through the company’s bank and the details of LC will be communicated to the suppliers by the Purchase department. Wherever supplier insists LC through a particular bank

26

specified by them, the same should be so stipulated in the Purchase Order to enable Finance Department to arrange accordingly. In case supplier demands LC confirmation, cost of confirmation shall be borne by the foreign supplier.

In case of Sight draft, when documents received directly by the Company, the

payment should be made within 30 days from the date of receipt of material and as per RBI guidelines.

In case of payment through LC / Sight Draft, pre-despatch / stage wise payment inspection clause may be incorporated in the Purchase Order as required. The inspection can be made by BEL / nominated agency / certifying agency or by vendor himself if he is specifically authorised for self inspection. Payment of inspection charges should be as mutually agreed.

19.2 Advance payments, along with the Purchase Order or at intermediate points, should not be entertained. In exceptional cases, where supplier insists upon such advance payment, the same may be followed as per management guidelines issued vide circular No. 18281/99/010-001 dated 28-02-2007 (Annexure-8), 18281/99/010-009 dated 17th July 2008, 18281/99/010-006 dated 22nd April 2009 and amended from time to time.

19.3 The performance of the supplier against previous orders should invariably be

reviewed by the Purchase Executives at the time of recommending fresh order on them. In this context the outstanding amounts / claims due from the supplier on account of rejections / shortages in the previous supplies should invariably be checked.

19.4 In case of procurement involving capital goods and items of long term performance,

the purchase department shall ensure to obtain bank guarantee towards performance covering the warranty period. The amount of bank guarantee may be decided and suitable clause shall be incorporated in the RFQ to that effect.

20.0 STANDARD TERMS & CONDITIONS The standard terms and conditions of contract for the supply and the standard

instructions (Annexure-10 for Inland and Annexure-11 for foreign tenders) framed by the Units shall include the following:

20.1 COUNTER TERMS AND CONDITIONS Purchase Department should persuade the supplier to accept BEL’s Standard Terms

and Conditions. However, in cases when the supplier insists on their terms and conditions the procurement authority not below the level of DGM, may accept suppliers’ terms and conditions after examining the implications, with Finance concurrence.

20.2 BEL’s RESERVATION

BEL reserves the right to accept or reject any quotation or part of the quotation without assigning any reasons. BEL reserves the right of ordering part quantities without assigning reasons and the supplier shall supply the ordered quantity at accepted rates.

20.3 ESCALATION

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Terms and conditions for allowing benefit of escalation in the rate shall be clearly spelt out in the tender enquiry itself. If, during techno-commercial negotiation, any modification is required in the terms and conditions of the escalation clause, same should be conveyed to all technically qualified bidders before getting the revised price bid. There should be no change in these terms and conditions after the price bids are opened.

20.4 TAXES AND DUTIES Normally quoted prices should be assumed to be all inclusive and no extras such as Excise Duty, Sales Tax, Turnover Tax, Octroi etc. will be payable unless specifically stipulated by the supplier in their quotation and provided for, in the Purchase Order and the same is legally leviable. Supplier is not entitled to any increase in taxes if there is delay in supplies on his part. However, if there is decrease in Excise Duty / Taxes, the same must be passed on to BEL. In case of changes in statutory levies like ED, taxes etc. after the placement of orders the payment will be made as per the terms and conditions in the Purchase Order regarding these changes in statutory levies. Necessary statutory forms shall be issued for availment of concessional rate of taxes.

20.5 DELIVERY / LIQUIDATED DAMAGES 20.5.1 The time for and the date of delivery of the stores stipulated in the Purchase Order

shall be deemed to be the essence of the contract, and delivery must be completed not later than the dates specified therein. Should the supplier fail to deliver the stores or any consignment thereof within the period prescribed for such delivery, BEL shall be entitled at their option:

a) To recover from the supplier agreed liquidated damages, and not by way of

penalty of sum of 0.5 % (2.5% in case of purchase orders placed on time preference basis) of the value of any stores not supplied in time for each week of delay or part of a week with a ceiling of 10 % (25% in case of purchase orders placed on time preference basis), or

b) To purchase elsewhere, at the risk and cost of the supplier, the stores not delivered, or

c) To cancel the Purchase Order.

In the event of action being taken under b) & c) the supplier shall be liable for any loss which BEL may sustain but the supplier shall not be entitled to any gain on repurchase made against default. If delay in delivery of the stores is due to no fault of the supplier or due to circumstances beyond his control, delivery period can be extended without levy of liquidated damages by Head Purchase (not below E-VI level) at his discretion without concurrence of finance, if the order value involved is less than or equal to Rs. 1,00,000 for production items(Category A & B items),Rs.50,000 for Non-Production & C category items and with the concurrence of finance for Purchase Orders valuing more than Rs. 1,00,000 for production items(Category A & B items),Rs.50,000 for Non-Production & C category items(All PO’s of Capital items irrespective of value require concurrence of finance). In all other cases of delayed delivery, approval of GMs / SBU Heads / Unit Heads / Functional Directors is required to waive off the liquidated damages with the concurrence of finance taking into consideration the

28

implications. In cases where LD has already been recovered, refund of LD (already deducted from the bills), requires approval of GMs / SBU Heads / Unit Heads / Functional Directors.

@20.5.2 In case of any deviation in acceptance of LD clause by supplier as mentioned in Para 20.5.1, approval from authority one level higher to be obtained.

(@ Sub-para 20.5.2 deleted and substituted vide office Order No. HO/591/022 dated

17.06.2011) 20.6 PACKING

The supplier will be held responsible for the stores being securely and properly packed for tropical storage and for transport by rail, road, sea or air so as to ensure their being free from loss or damage on arrival at their destination. The packing and marking of packages shall be done by and at the expense of the supplier. Packing shall allow for easy removal and checking on site and comply with carrier’s conditions of packing or established trade practices. Each package shall contain a Packing Note quoting PO number, and its contents in detail. If items are packed, clubbing various orders, package for each item shall have BEL’s PO No, and supplier’s invoice no, date and Qty. Actual packing and forwarding charges to Airport / Port of shipment inclusive of Inland transportation charges wherever payable by BEL as per terms of Purchase Order should be prepaid by the suppliers and included in their Invoice. Payment of port charges are calculated on the basis of measurements and gross weight of the cases and as such this information must be indicated by the supplier in their Invoice / Packing Notes, failing which the actual measurements and gross weight of the cases are to be taken by BEL physically on its arrival and furnished to port authorities before delivery of the consignment, resulting in delay and payment of demurrage charges, which will have to be reimbursed to BEL by the supplier.

20.7 INSURANCE 20.7.1 INDIGENOUS SUPPLIES

a) For all orders other than ‘FOR Destination’ Basis, the supplier has to furnish details such as R/R, PWB, GC Note, Postal Receipt Reference, Airway Bill No, Courier Docket No., nature of packing, no. of cases, Gross Weight, Net weight, Train Carrying Goods, Value of Materials despatched etc., immediately to Manager Stores (Transit), BEL to take up Insurance under BEL's open policy.

b) For Purchase Orders placed against quotations on ‘FOR destination ‘ basis

only, the supplier shall be responsible for shortages / damages during transit and as such the consignment may be insured by him at his option and cost. Failing to comply with above provisions a) & b), the supplier shall be held liable for shortages / damages, if any, during transit.

20.7.2 FOREIGN SUPPLIES

The insurance of the materials despatched by sea freight / air freight / air mail post/courier should be covered against BEL’s Open Policy by the supplier by sending a declaration letter giving full particulars i.e. mode of despatch, name of ship, number

29

of cases, short description of material and C & F value to the Insurance Company specified by BEL. Insurance premium will be paid by BEL directly in Rupees. No separate insurance certificate will be issued by the Insurance Company. Declaration will be treated as an evidence for having covered the insurance of the consignment.

20.8 INSPECTION 20.8.1 ON RECEIPT OF MATERIAL AT BEL

There will be visual inspection by IG Stores to confirm that the material supplied is not damaged during transit. If the consignment is found damaged, procedure for insurance claim will be followed by IG Stores. The material will then be inspected by Inspection Department of BEL and their decision with regard to acceptance / rejection of items will be final and binding on the Suppliers.

20.8.2 PRE-DESPATCH The pre-despatch inspection can be made by BEL / nominated agency / certifying agency or by vendor himself if he is specifically authorised for self inspection. Payment of pre-despatch inspection charges will be as mutually agreed.

20.9 REJECTION

Rejection Report: The intimation of the rejection of material will be communicated by the Inspection Department to the Purchase Department and Indentor. Purchase Department will liaise with the supplier and organise RMA or Replacement. The rejected materials will be returned to the supplier for replacement on freight to pay basis for arranging free replacement and all charges on the same will have to be borne by the supplier. The supplier should immediately arrange for replacement within a reasonable time, failing which, BEL reserves the right to procure the items from elsewhere at the risk and cost of the supplier and recover from him the extra expenditure, if any, incurred by BEL. The packing, freight charges, etc. on replacement of returned materials shall be borne by the supplier since such charges were already incurred and borne by BEL on the original consignment which had been rejected and returned to the supplier. Whenever payment has already been made by BEL, partly or wholly to the supplier, the rejected material will be returned to the supplier against refund of amount already paid by BEL. In case the rejected materials are not required to be replaced, freight, insurance charges, etc., incurred by BEL on original consignment shall be recovered from the supplier’s bill apart from the payment made for the goods. Stores rejected by BEL must be removed by the supplier within 30 days from the date of receipt of intimation of rejection and at his own cost. If the supplier does not respond within 90 days from the date of intimation of rejection, the stores will be liable to be sold by BEL at the suppliers’ risk and responsibility. Efforts should be put to sort out rejected cases within 4 months from the date of reporting. A judicious decision must be taken on the cost and effort involved, while returning the item to the supplier, versus the cost of the items.

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a) Wherever the cost of material is less than Rs. 5000/- and payment is already

made, rejected item may be sent back to supplier for replacement with out insisting for Bank Guarantee / Management Approval / Indemnity Bond for indigenous supplier. In case supplier fails to replace the goods with in reasonable time, the recovery may be made from the outstanding / future payments

b) In the case of Foreign goods, Purchase Departments should get the call back letters / RMA Numbers and co-ordinate with respective Claims Departments to settle the pending claims. Line rejection will be intimated through a letter based on Assembly Inspection Report (AIR)/Rejection Report from Production Control/Testing and certified by Quality Control Department.

c) POs more than one year old may be short closed / removed from books of accounts by Purchase with concurrence of Finance if value outstanding against rejections is: i) Less than Rs.5000/- in case of direct Foreign orders.

ii) Less than Rs.1000/- in case of Indigenous orders. 20.10 GUARANTEE / WARRANTY

Material / equipment supplied should be free from any defects arising from faulty material, design or workmanship and should be guaranteed for quality / satisfactory performance, for a minimum period of 12 calendar months (or as specified) from the date of receipt and acceptance of materials / satisfactory installation and commissioning or 15 months (or as specified) from the date of despatch. During this guarantee period, if any defects develop arising from faulty material design or workmanship, the supplier shall remedy such defects at his own cost. If it becomes necessary, the supplier should replace any defective portion of the goods or replace the material / equipment as a whole without any extra cost to BEL.

20.11 FORCE MAJEURE

Force Majeure means an event beyond the control of the supplier and not involving the supplier’s fault or negligence and which is not foreseeable. Such events may include, but are not restricted to, acts of the purchaser either in its sovereign or contractual capacity, wars or revolutions, hostility, acts of public enemy, civil commotion, sabotage, fires, floods, explosions, epidemics, quarantine restrictions, strikes, lockouts, and freight embargoes. If there is delay in performance or other failures by the supplier to perform its obligation under its contract due to event of a Force Majeure, the supplier shall not be held responsible for such delays / failures. If a Force Majeure situation arises, the supplier shall promptly notify the purchaser in writing of such conditions and the cause thereof within twenty-one days of occurrence of such event. Unless otherwise directed by the purchaser in writing, the supplier shall continue to perform its obligations under the contract as far as reasonably practical, and shall seek all reasonable alternative means for performance not prevented by the Force Majeure event. If the performance in whole or in part or any obligation under this contract is prevented or delayed by any reason of Force Majeure for a period exceeding sixty days, either party may at its option terminate the contract without any financial repercussion on either side.

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There may be a Force Majeure situation affecting the purchase organization only. In such a situation the purchase organization is to take up with the supplier on similar lines as above for further necessary action.

20.12 APPROPRIATION

Whenever under this contract any sum of money is recoverable from and payable by the supplier, BEL shall be entitled to recover such sum by appropriating in part or whole by deducting any sum then due or which at any time thereafter may become due to the supplier in this or any other contract entered by BEL as a whole, including its Units and Offices etc., with the supplier alone or in partnership with others. Should this sum be not sufficient to cover the full amount recoverable, the supplier shall pay to BEL on demand the remaining balance due.

20.13 INDEMNITY

The supplier shall at all times indemnify BEL against all claims which may be made in respect of materials for infringement of any right protected by Patent, Registration of design or trade mark and shall take all risk of accidents or damages which cause a failure of the supply.

20.14 ARBITRATION

Normally, there should not be any scope of dispute between the purchaser and the supplier after entering into a mutually agreed valid contract. However, due to various unforeseen reasons, problems may arise during the progress of the contract leading to disagreement between the purchaser and the supplier. Therefore, the conditions governing the contract shall contain suitable provision for settlement of such disputes / differences binding on both the parties. Mode of settlement of such disputes/differences shall be through Arbitration. However, when a dispute/difference arises, both the purchaser and the supplier shall first try to resolve the same amicably by mutual consultation. If the parties fail to resolve the dispute by such mutual consultation then, depending on the position of the case, either the purchaser or the supplier shall give notice to the other party of its intention to commence arbitration as hereinafter provided:

a) When the contract is with domestic supplier, the applicable arbitration procedure will be as per Indian Arbitration and Conciliation Act, 1996.

b) When the contract is with foreign supplier, the supplier has the option to choose either Indian Arbitration and Conciliation Act, 1996 or Arbitration in accordance with the provision of UNCITRAL (United Nations Commission on International Trade Law) Arbitration Rules.

20.15 JURISDICTION

This order shall be governed by the Laws of Indian Union in force. Only competent courts shall have the jurisdiction as provided under the Indian Arbitration and Conciliation Act 1996, or any statutory modifications thereof in force on any matter arising out of any Arbitration proceedings under the contract.

20.16 GENERAL TERMS, CONDITIONS & INSTRUCTIONS

Purchase Order released by BEL should be accompanied by:

1) Drawings and specifications

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2) Standard Terms, Conditions & Instructions to purchase order (Inland), Annexure-10

3) Standard Terms, Conditions & Instructions to purchase order (Foreign), Annexure-11

4) Instructions for despatch by Air Freight, Annexure-12 5) Instructions for despatch by Sea Freight, Annexure-13 6) Any other special instructions / documents in addition to above.

20.17 DE-REGISTRATION / SUSPENSION / BANNING OF FIRMS Any unethical behaviour shall call for action against the vendor of deletion from the

vendor list / banning / suspension / Encashment of Bank Guarantee as considered appropriate by GMs / SBU Heads / Unit Heads / Functional Director in accordance with procedure ref.no 18869/IB/MS Dated:12.01.2009 (Refer to Annexure-28).

21.0 AMENDMENT TO PURCHASE ORDER

Amendments to Purchase Orders generally arise because of the following:

a) Necessity to modify the specifications. b) Extension of delivery date. c) Amendment to quantity. d) Necessity to short close the order. e) Change of mode of transport. f) Transfer of order in another name as per the request of the supplier.

Amendment to payment terms.

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21.1 MODIFICATIONS IN SPECIFICATIONS Modifications in specifications of insignificant nature requested by the supplier may be agreed to by the officer, who had originally approved the purchase with the concurrence of the Indenting Department, subject to the condition that the quality of the material and price are not affected thereby. If the manufacturing cost of the material is likely to be less due to the modification, suitable reduction in the price should be negotiated with the supplier. Concurrence of the Finance should be obtained before any modification / amendments to Purchase Orders are issued, where financial concurrence has been obtained earlier.

21.2 EXTENSION OF DELIVERY DATE 21.2.1 Change in the date of delivery, if requested for by the supplier, may be considered

and agreed to, by the officer approving the purchase in consultation with the Indenting Department provided the reasons for requesting extension in delivery date put forward by the supplier are justifiable and the order was not placed on Time Preference basis. It should, however, be ensured that there would be no extra financial commitment for the company due to the extension of the delivery date (due to such developments as increases in statutory levies, etc.) and the same should be made very clear to the supplier while extending the delivery date. In respect of imported items, the import licence should also be valid for shipment up to extended date.

Time Preference: PO Placed considering delivery time as the prime factor over riding other conditions of tender.

21.2.2 Requests for extension of delivery date in cases where the order had been placed on time preference basis should be rejected if alternate supplies can be arranged at the risk and cost of the supplier. If this is not possible, extension of date subject to levy of liquidated damages may be granted by Head Purchase (not below E VI level), with Finance concurrence.

21.2.3 Requests for advancing the delivery date should be carefully examined and not

normally be accepted unless it is in the Company’s interest to do so. Where they involve earlier payment to the supplier as well, the concurrence of finance should be taken before acceding to the request.

21.3 AMENDMENT TO QUANTITY

Any increase in the quantity ordered, if requested for by the supplier, may be considered by the officer who had approved the purchase, with the concurrence of the Indenting Department, and Finance subject to additional quantity being within or up to 15% of original order quantity. Similarly, the Purchase Order may be amended to incorporate additional requirement of same item received from the Indenting Department or reduction in quantity ordered, with the concurrence of the supplier. However, efforts shall be made to obtain suitable price reduction, if any, owing to increase in the quantity. The value of the Purchase Order after amendment should, however, be approved as per delegation of powers.

21.4 NECESSITY TO SHORTCLOSE THE ORDER

In case the balance quantity of material outstanding on the supplier is no longer required by the Indenting Department, the order may be short closed to the extent of quantity already supplied and accepted, with the concurrence of the supplier. If a

34

supplier regrets his inability to supply a small balance quantity left against an order, the same may be short closed with the concurrence of the Indenting Department, provided the company would not be put to any adverse consequence thereby.

21.5 CHANGE OF MODE OF TRANSPORT

In case material is urgently required (or the urgency no longer exists) the mode of transport in the Purchase Order may be changed, as provided for in para 17.0.

21.6 TRANSFER OF ORDER IN ANOTHER NAME The name of the supplier in a Purchase Order may be changed, if so requested due to the following reasons:

a) The name of the company has been changed. b) The company has been sold to / amalgamated with another company.

In such cases, the request may be agreed to with the concurrence of the second party, provided the quality of the goods and other terms and conditions remain unchanged and the company is agreeable to accept the request of the supplier.

21.7 Normally change in Payment Terms is not allowed after the issue of Purchase Order. However, in exceptional cases changes may be effected with the approval of SBU / Unit Head, subject to the following conditions:

a) Such change in payment terms should not be advantageous to L1 such a way

that his status as L1 is altered vis-à-vis other bidders, when such terms of payment are considered for evaluation of bidders to decide L1.

b) These changes are not disadvantages to BEL.

22.0 MICRO, SMALL AND MEDIUM ENTERPRISES. These vendors are to be classified accordingly in the BEL vendor master. The request received from the vendors to be scrutinised and classified by Standards D e p a r t m e n t a n d s u i t a b l y f l a g g e d i n t h e v e n d o r m a s t e r l i s t . The stores division to inspect and accept the materials within stipulated time. The delay in acceptance and payment attracts interest and penalties. In case of rejection, s t o r e s d i v i s i o n h a s t o i n f o r m t h e v e n d o r s p r o m p t l y i n t i m e . Finance has to ensure that payments are made with in the due dates.

23.0 COMPLIANCE WITH RIGHT TO INFORMATION ACT.

BEL is covered under the provisions of Right to Information Act, 2005. The Company is required to maintain all its records in such a manner to ensure easy access to such records and transparency in the decisions taken. Justifications shall be properly recorded in support of the decisions taken.

24.0 MANAGEMENT REPORTING

The Head of Purchase Department in each unit should generate the following reports periodically / as and when required by the Unit management and by the Corporate Office on all-important aspects of the purchasing activities.

24.1 REPORTS TO THE UNIT MANAGEMENT

i) Age analysis of the pending Purchase Requisitions yet to be converted to Purchase Orders (First week of every month-as per Annexure-14)

ii) Age and cause analysis of receipts which are pending issue of ICRRs / GRs (First and third week of every month as per Annexure-15)

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iii) Age and cause analysis of claims pending on account of non-supply / shortages / rejections (First week of every month-as per Annexure- 16).

iv) Analysis of supplies pending beyond 3 months of stipulated delivery dates (First week of every month as per Annexure-17

v) Category wise analysis of the Purchase Orders placed (as per Annexure-18).

vi) Requirement of cash outflow in current and next month on the basis of expected delivery of materials, PO placed, PR pending for projection in Cash Flow Statement (as per Annexure-19).

vii) Monthly pending Supplies / POs where advance payment is made both Foreign and Local (as per Annexure-20).

viii) The details of Purchase Orders, where supplies have been made but payment is pending for more than 3 months from the date of receipt of goods (First week of every quarter as per Annexure-21).

ix) Analysis of the lead times taken from Receipt of Purchase Requisitions to placement of orders (First week of every month - as per Annexure-22.

x) Price trends, country of origin-wise, of typical electronic and mechanical items over previous year (as per Annexure-23).

xi) Cases of purchase of proprietary articles (as per Annexure-24).

24.2 REPORTS TO THE CORPORATE OFFICE i) Foreign Exchange utilisation – currency / customer wise (as per Annexure-

25). ii) Purchase from the Small Scale Sector (as per Annexure-26). iii) Any other matter which needs to be reported to Government and other

outside agencies in respect of purchase matters (as per Annexure-27).

%25.0 INTEGRITY PACT: 25.1 Central Vigilance Commission has recommended adoption of Integrity Pact in respect

of major procurements in the Government Organizations and PSUs. MoD has also given instructions to DPSUs to adopt Integrity Pact with its vendors / suppliers. In line with these directives, the Company has adopted Integrity Pact for orders / contracts with vendors / suppliers for value ` 20 Crores and above in each case. Detailed instructions in this regard has been issued vide CMD’s Office Order No. HO/865/001 dated 31st July 2010.

(% Inserted vide Office Order No. HO/ 591/022 dated 17.06.2011)

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GLOSSARY

1 AIR : Assembly Inspection Report 2 APP : Air Post Parcel

3 AVD : Approved Vendor Directory

4 B/L : Bill of Lading

5 BOM : Bill of Materials 6 C & F : Cost and Freight

7 CIF : Cost, Insurance and Freight(named port of destination)

8 CMD : Chairman & Managing Director 9 CMM : Central Material Management 10 CMR : Components Manufacturing Request 11 CRR : Consignment Receipt Report 12 CVC : Central Vigilance Commission

13 COC : Certificate of Conformance

14 COD : Cash on Delivery 15 D&E : Development & Engineering

16 DGFT : Director General, Foreign Trade

17 DGS&D : Director General of Supplies & Disposal

18 DPE : Department of Public Sector Enterprises

19 DOT : Department of Telecommunication 20 ECC : Excise Control Code

21 ECS : Electronic clearing system

22 EFT : Electronic Fund Transfer

23 ERP : Enterprise Resource Planning

24 ESO : Equipment Stock Order 25 EXW : Ex-works (named place)

26 EXIM Policy : Export and Import Policy

27 FCA : Free Carrier (Named Terminal/Place)

28 FOB : Free on Board 29 FOR : Free on Road/Rail

30 GC Note : Goods Consignment Note.

31 GM : General Manager 32 HAWB : House Air Way Bill

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33 IDR : Industries Development & Regulation 34 IG : Inward Goods

35 ICC : International chamber of commerce (Paris) 36 ICD : Inland Container Depot 37 ICRR : Inspection Cum Receipt Report 38 JSS : Joint Services Specifications 39 L1 : Lowest Bidder/Tenderer 40 LBP : Local Bills Payable

41 LC : Letter of Credit

42 LCL : Less than Container Load

43 LCSO : Electronics Components Standardization Organization

44 LD : Liquidated damages

45 MAWB : Master Airway Bill 46 MOQ : Minimum Order Quantity

47 MOV : Minimum Order Value

48 MRP : Material Requirement Planning 49 MRR : Material Receipt Report

50 OEM : Original Equipment Manufacturer

51 PO : Purchase Order

52 PR : Purchase Requisition

53 PROP. : Proprietary

54 PSU : Public Sector Undertaking

55 PWB : Parcel Way Bill

56 RBI : Reserve Bank of India

57 RFQ : Request for Quote

58 RL : Reel 59 RR : Railway Receipt

60 RMA : Return Material Authorization

61 SBU : Strategic Business Unit

62 SPQ : Standard Packing Quantity

63 ST : Sales Tax

64 TREM Card : Transport and Emergency Card

65 VPP : Value Payable Parcel

66 W.O : Work Order

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Annexure- 1 (Para 4.2.1) (Para 10.1)

PURCHASE REQUISITION REQUIREMENT

Purchase Requisition shall contain the following details: 1. PR No. 2. PR Date 3. S.O/Internal Order/WBS Element. Type (Defence, Civil, Export etc.) 4. Sl. No. 5. BEL Part No. 6. Part Description 7. Supplier details i.e., Supplier Name, Supplier Code, Type No, as per AVD / Part

Drawing 8. Previous Supplier & Code

9. Previous PO No & Date 10. Previous Procured Type No. 11. Previous Qty 12. Previous Unit Rate 13. Previous Currency 14. Latest issue level of the drawing 15. Drawing Size 16. S.O/Internal Order/WBS Element. No 17. Project Name (In Full) 18. Quantity Required 19. Unit 20. Rate Indicated (RI) (C for 100, K for 1000, M for Million) both in words and figures. 21. Delivery Schedule (from ………. To…………..for each item)

NOTE: Delivery schedule should not be mentioned as ‘urgently required’, ‘priority’, ‘as early as possible’, ‘immediately’.

22. Total Estimated cost 23. Customer Indent No 24. Remarks 25. End customer with full address and details. 26. Program application of the item in the equipment. 27. Suggested Suppliers 28. Generated By Signature Name Staff No. 29. Approved By Signature Name Staff No

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Annexure-2 (Para 6.3)

REQUEST FOR QUOTATION

Please forward your quote through E-Mail / FAX / Sealed Cover, with the best prices for the following items quoting our enquiry number.

PR/RFQ LINE ITEM

BEL PART NO/ ISSUE LEVEL DESCRIPTION

Manufacturer & Manufacturer’s

Part Number QTY UNIT

Delivery Start date/

Delivery End date

Currency /Unit Price in

Figures and words)

Total Price (Figures and

Words)

The following details may please be furnished in your Quote: Total (in Figures)

(In Words): 1.Terms of Payment 2.Terms of Price : 3.Duties : 4.Taxes: 5.Name and Full address of your firm 6. Delivery Schedule: 7.Any Other Terms.Standard Terms & Conditions enclosed.

Attn: Fax No.: E-mail : Vendor Code: --------- M/s ----------- (Vendor’s name and address) ----------------------- -----------------------

Bharat Electronics Ltd., ---------------- , INDIA Tel : +91-- ---------------- Fax: +91--------------------- Email: ----------@---------------

Department: PURCHASE/BEPO/- - (Purchase Cell code) Our Enquiry No. ------------ Vendor’s Ref: --------------------- Date:DD.MM.YY Dated DD.MM.Y Closing Date: DD.MM.YY Time: --.--Hrs Tender Opening Date:DD.MM.YY Time:--.—Hrs

Venue :

Vendor’s Contact Person (name and title) Fax: Tel: e-mail:

Signature of Purchase Executive: Name and title

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Annexure-3 (Para 6.6)

PURCHASE ORDER PAGE No.

(A GOVERNMENT OF INDIA ENTERPRISES) ------(Address of Unit/SBU)------------

UNIT/SBU--------------------- TEL: _+91-80------------------- FAX: _+91-80------------------- e-mail : -------------@---------------- http://www.bel-india.com

*** No. Date

Our Enquiry Ref Your Quotation Ref.

Please supply the following materials in accordance with the instruction given below: This Purchase Order shall be governed by BEL’s Terms, Conditions and instructions attached

Sl. No.

Description BEL Part No. (Issue level)

Manufacturer Part No / Type No

Qty Unit

Del. Sch From

To

CY Unit Price (Figures

and Words)

RI Currency Value

IMPORT LICENCE NO : TOTAL VALUE : CLASS OF MATERIAL : DISCOUNT : AMOUNT IN WORDS : OTHER CHARGES : NET TOTAL VALUE : TERMS OF PRICE MODE OF DESPATCH TERMS OF PAYMENT

RANGE: -------------- DIVISION: ------------- COMMISSIONERATE: ----------------

SALES TAX: CST VAT

EXCISE DUTY

TIN NO. (to be filled) For BHARAT ELECTRONICS LTD. CST : ................ dt: ............ ECC CODE NO: AAA CB 5985 CXM 014 PAN NO. (to be filled ) HEAD PURCHASE * * * TO BE QUOTED IN FULL IN FUTURE CORRESPONDENCE RI (Rate Indication): ‘C’ INDICATES 100 UNITS ‘K’ INDICATES 1000 UNITS ‘E’ INDICATES EACH. CY : Currency , Del.sch : Delivery Schedule, Qty : Quantity, Unit : Unit of measurement, Distribution : PURCHASE /FINANCE(L1) (F2)/PURCHASE CO-ORDINATION(CUSTOMS CLEARANCE) Avoid plastic and use paper bag.

We are Health, Safety & Environment friendly Company committed to ISO – 14001 (EMS) & OHSAS : 18001. We prefer our vendors to follow aforesaid standards in their processes, supplies and services.

BEL FORM NO. Issue level: *** Date:

Supplier CODE No:

41

Annexure-4 (Para 6.13)

BHARAT ELECTRONICS LTD, …………………………(SBU/UNIT)

SUPPLIER REGISTRATION PROFORMA 1 A Company:

Name: Address of Head Office/Registered Office:

Address of Sales Office/Offices (if more than one):

Name of CEO:

SSI/PSU/Proprietary/Partnership/Others

Nature of Business: OEM/Distributer/Stockists Name of companies Represented: B Contact details of Head Office/Registered Office: Contact Person Telephone

Mobile No.:

FAX: e-mail: WEB Site: C Contact details of Sales Office: Contact Person Telephone FAX: e-mail: WEB Site: D Company Related: Date of Establishment of Company: Old Name of Company if any (Detail): No of Employees: E R&D Lab/ Collaboration with any R&D Centre: Field of Specialization if any: F Registration Details for: Central Sales Tax VAT TIN PAN Service Tax Registration No Central Excise No G Equity Invested in Rs H Turn Over In Last Three Financial Years: In Financial Year (20….-….): In Financial Year (20….-….): In Financial Year (20….-….):

42

Name & Address of the Bank Bank A/c No.

2 A Company's Mission & Vision:

B Quality Accreditions (like ISO, Business Excellence/Awards received etc):

3 A Products Handled (Components/Electro-mechanical

subsystems/Systems/Power Supply/Microwave/Eelectrical etc)(Attach Product Brochure):

B Categories of Products (Pl tick at the enclosed list):

4 Name some of your Customers (CIVIL/Defence) and their registration

Certificates:

5 If OEM: Details of Distributor

Details of franchise/Channel Partner

Details of Retailers

6 IF Foreign Supplier: Details of Sales Office in India

7 Dedicated Service Centre/Repair Facility if applicable:

Address:

Contact Person:

Telephone:

FAX:

E-mail:

8 Any other areas not covered:

Signature(supplier):

Name:

Send the filled up form to: Head Purchase, ……………. BEL…………………. or e-mail to ……………………………………………. or Fax on ……………………………

Date:

43

Annexure-5 (Para 6.17)

VENDOR RATING PROCEDURE

Need : In order to procure quality products at competitive prices with deliveries at stipulated pace, it is necessary to have the supplier’s rating system. Concept : The concept of Vendor Rating helps to access vendors on a single point scale on parameters of Quality, delivery, and Service parameters. Methodology: Methodology for vendor rating procedure for purchase parts has been arrived with quality, delivery and service parameters. The details of the methodology are furnished below:

I Quality Rating:

Percentage of Acceptance –

A) 100 XInspected Quantity GR / ICRR TotalAccepted Quantity GR / ICRR Total

B) (0.4 is the weightage factor for accepted quantity on approved deviation based

on recommendations by Material Review Committee) 0.6XBA Rating Quality Final

(0.6 = Weightage given for Quality Rating)

NOTE:

i) Final Quality Rating shall be arrived at on half yearly basis and the same shall be informed to the supplier for improvement, if required.

ii) Replacement ICRRs / GR (Type D) shall also be considered for the calculation of Quality Rating.

iii) Free samples (where ICRRs / GR are made) shall not be accounted for any of the ratings.

44

II Delivery Rating:

Delay in number of days =

{Date of DC or Invoice (Whichever is earlier)} - {Agreed Date of delivery or delivery Date in PO}

Delayed delivery in no. of weeks Delivery Rating Before or on Time 100 Up to 1 week 90 1 to 2 weeks 80 2 to 3 weeks 70 3 to 4 weeks 60 4 to 5 weeks 50 > 5 weeks 0

0.3 X Rating Delivery Rating Delivery Final

(0.3 = Weightage given for Delivery Rating)

NOTE:

i) If the number of dates are shown as minus (-) in the EDP Statement, consider delivery rating as 100.

ii) Final delivery rating shall be arrived at on half yearly basis and the same shall be informed to the supplier for improvement, if required.

III SERVICE RATING:

The following factors to be considered for Annual Service Rating of Vendors.

RATING SCORE A B SL

NO.

P A R A M E T E R

Local Manu-

factures

Foreign Manu-

facturers

Distributor / Stockists (Foreign &

Local)

Purchase Material

Inspection

1 2 3 4 5 6 8 01 Self Certification acceptable to

BEL 10 10 10

02 Supplies with Certificate of conformance 10 10 10

03 ISO 9001-2000 / ISO 14001 Certification 10 10 5

04 LCSO Certification (for Electronic Components). National/International Standards Certification.

15 15 NA

45

05 Response to RFQs 10 10 15 06 Acceptance of BEL Terms of

payment 10 10 10

07 Ability to meet emergent supply requirements 5 5 10

08 Adherence to place or point of delivery as per contract 5 5 5

09 Adequacy and clarity of delivery documents 3 3 4

10 Reasonableness of contract price 3 3 5

11 Ability to hold on agreed price over a contract period or more than a year

4 4 6

12 Compliance to statutory requirements 5 5 NA

13 Acceptance of credit period 3 NA 10 14 Adherence to business ethics 2 5 10 15 No. of Components developed

and supplied for BEL 5 5 NA

TOTAL 100 100 100

0.1X2

B)(ARatingService Final

Note:

The respective groups (Purchase & Materials Inspection) rate the service rating in the month of April. While the ‘Quality rating’ & ‘Delivery rating’ are arrived at for each and every ICRR. The service rating is arrived at an annual basis. The ‘Service Rating’ for the previous year would be applied for calculating the final vendor rating in the ‘Current Year’.

VENDOR RATING CHART Factor Rating

Parameters Acceptable Rating

“Caution” (Under observation

for 1 year) Unacceptable Rating

Quality Rating 60 to 53 52 to 40 < 40

Delivery Rating 30 to 21 20 to 15 < 15

Service Rating 10 to 6 5 to 4 < 4

(Decimal > 0.5 will be rounded off to the next higher place. <0.5 will be rounded off to the lower place)

Vendors falling in the “Caution Range” in any of the parameters will be under observation for one year following the year of rating. The vendor under observation

46

has necessarily to improve the score to come in the range of “Acceptable” category. The vendor will be removed from the AVD in case of failure to improve the ratings. Vendors coming in the category “Unacceptable” in any one of the parameters will be removed from the AVD, i.e., the individual ‘factor’ rating should be in the ‘Acceptable’ range.

Such vendors who have been removed from the AVD will be reviewed on a case-to-case basis by the respective Unit/SBU/CSG Heads for doing further business/ seeking fresh approval.

ASSESSMENT

Final Vendor Rating = (Final Quality Rating + Final Delivery Rating +Final Service Rating)

VENDOR RATING SCORE CLASSIFICATION OF VENDOR

Above 90 Preferred Vendor 80 to 90 Acceptable Vendor

Less than 80 Not preferred Vendor

47

Annexure-6 (Para 6.18)

STANDARD TERMS & CONDITIONS (INLAND ENQUIRY)

1. The quotations and any order resulting from this Enquiry shall be governed by BEL’s conditions of contract and the supplier quoting against this Enquiry shall be deemed to have read and understood the same.

2. Where counter Terms and Conditions of business have been offered by the supplier, we

shall not be deemed to be governed by those unless BEL’s specific written acceptance there of has been given.

3. No Conditions and Terms, notice of which has not been given by the supplier while

submitting quotations, will be considered by BEL, if put forward in subsequent correspondence.

4. Quotations:

The tenderers should quote their minimum price. Negotiations, if any, will be held with L1 only in select cases, if necessary. The suppliers should submit their offer against this Enquiry. Additional information if any, should be furnished by the suppliers in a covering letter. The quotation should be sent in a sealed envelope indicating there on Enquiry / Tender no. and closing date and the same must reach BEL’s office on or before the closing date. The late quotations will not be considered. Fax / e-mail offers are also acceptable. Against each enquiry / tender in case of two bid system, Techno-commercial and price bids should be submitted simultaneously, in separately identifiable sealed covers, both put in another envelope, giving reference to RFQ.

The tenderers / authorised representatives who wish to be present during the tender opening are welcome to be present in cases other than e-tendering.

5. Specifications: a) Materials should be offered strictly conforming to BEL’s specifications. The deviations

in specifications, if any, should be clearly indicated by supplier in their quotation. The supplier should also indicate Make / Type Number of the materials offered and catalogues, technical literature and samples, wherever necessary, should be forwarded by the supplier.

b) Please indicate IDR License number and date under which you are licensed to

manufacture the Machinery/Equipment offered by you. If not, indicate precisely from whom you propose to procure the equipment and what arrangements are proposed for assembly and supply.

c) All items should conform to Government/statutory regulations with regard to Safety,

handling & environment as applicable.

d) Please indicate in your offer, if the firm comes under the SSI Category.

48

e) Please mention the details, if you are a certified company under Quality system

standards ISO 9000 and Environmental Management system standard ISO 14001. f) If the items are approved under LCSO, JSS etc., the details with validity shall be

indicated.

6. Terms of Price: Quotation should be submitted on ‘F.O.R. --------------- ‘or‘ F.O.R. BEL factory basis. The prices should be firm and not subject to alteration on any account.

7. Validity: The quotation must remain valid for a minimum period of 90 days from the closing date.

8. Extras: For Quotations Ex. Works/Ex-Godown/F.O.R dispatching station, the total packed weight of material should be indicated by the supplier to enable BEL to calculate the freight charges on materials up to factory. For quotations Ex-Works/Ex-Godown, the approximate packing and Forwarding charges, should also be indicated by the Supplier.

9. Sales Tax: No sales tax or any other tax will be payable by BEL unless payment of same is specifically stipulated by the supplier in their quotation and the same is legally leviable. Central Sales Tax will be payable at the concessional rates against Form ‘C’ on materials covered under BEL’s Central Sales Tax Registration No.CST. 10050292 dt. 2.7.1957. Local taxes will be payable as applicable.

10. Insurance: The supplier shall be responsible and should cover the Insurance for all transit risks of the materials to be supplied against their quotations ‘F.O.R Bangalore’ and ‘F.O.R. BEL’s Factory unless other wise stated specifically by the supplier in their quotation. The Insurance of materials against quotations “Ex-works / Ex-Godown / F.O.R. dispatching station” will be arranged by BEL.

11. Delivery Date: The supplier must indicate the firm delivery date by which the materials will be dispatched by them from the date of receipt of BEL’s order. Should the supplier fail to deliver the stores or any consignment thereof within the period prescribed for such delivery, BEL shall be entitled at their option: a) to recover from the supplier agreed liquidated damages, and not by way of penalty of

sum of 0.5% (2.5% in case of purchase orders placed on time preference basis) of the value of any stores not supplied in time for each week of delay or part of a week with a ceiling of 10% (25% in case of purchase orders placed on time preference basis) , or

b) to purchase elsewhere, at the risk and cost of the supplier, the stores not delivered, or.

c) to cancel the Purchase Order.

49

In the event of action being taken under b) & c) the supplier shall be liable for any loss which BEL may sustain but the supplier shall not be entitled to any gain on repurchase made against default.

12. Guarantee: Any material / equipment supplied should be free from any defects arising from faulty material, design or workmanship and should be guaranteed for quality / satisfactory performance for a minimum period of 12 calendar months (or as specified) from the date of receipt and acceptance of materials / satisfactory installation and commissioning or 15 months (or as specified) from the date of despatch. During this guarantee period, if any defects develop arising from faulty material, design or workmanship, the supplier shall remedy such defects at his own cost. If it becomes necessary, the supplier should replace any defective portion of the goods or replace the material / equipment as a whole.

13. Inspection: Material on its arrival at BEL’s factory / site will be inspected by BEL’s Inspection

Department and their decision in the matter will be considered final and Copy of Inspection Report will be forwarded to the supplier in case of rejections. The rejected materials will be returned to the supplier for replacement and all charges on same will have to be borne by the supplier. The pre-despatch inspection can be made by BEL / nominated agency / certifying agency or by vendor himself if he is specifically authorised for self inspection. Payment of pre-despatch inspection charges will be as mutually agreed.

14. Payment: The payment will be made against supplier’s bills by Account Payee crossed cheque /

through ECS / EFT only for accepted materials (as per finalised ICRR / GR) within 30 days from the date of receipt of material or submission of bills whichever is later.

Normally no request for Advance Payment is entertained. However, where Advance

Payment is considered in select cases, the same may be allowed as per BEL terms, subject to furnishing Bank Guarantee from a scheduled commercial Bank (other than Cooperative Bank) for an amount equal to 110% of the advance released or the advance released plus estimated interest amount on the advance (calculated at the SBI PLR rate) for the period of advance likely to remain with the Supplier, whichever is higher.

Penal Interest: If the payment terms involves grant of advance, then penal interest (equivalent to 2%

above the prevailing SBI PLR rate) on advance will be charged in cases where the supplier is unable to execute the order for whatever reason resulting in cancellation / short-closure of the order / delay in supplies. The delayed period will be calculated with reference to scheduled date of supplies / completion of milestones as per the purchase order.

15 Evaluation of L1 Cost to BELand compliances to RFQ conditions like delivery requirements, packing, etc.

would be the basis while evaluating L1. Payment terms including advances, if any, will be considered while working out cost to BEL.

16. Certificate of Conformance / Test reports shall be sent for each item along with the

consignment.

50

17. Packing instructions as mentioned in BEL’s Corporate Standards / Drawings to be complied.

18. In case of shelf life items, please indicate the same. 19. BEL reserves the right to accept or reject any quotation or part of the quotation without

assigning any reasons. BEL reserves the right of ordering part quantities without assigning reasons and the supplier shall supply the ordered quantity at accepted rates.

20. BEL may exercise an option of placing repeat order for a maximum quantity up to

100% of the original order quantity within 12months from the date of original order at the same terms and conditions of the original order.

21. Price Preference to Central Public Sector Undertakings / Small Scale Sector / Others

will be applicable as per the Government order in force. 22. Vendors are liable for de-registration / suspension / banning from the business as per the

rules of the company in force. 23. The tendered rate against each item indicated in the RFQ should be indicated both in

words and figures. In case of any clerical error between the rates indicated in figures and word, the rates quoted in words would prevail. If there is any inconsistency between the rate and the value extended (after multiplication with the tender quantity), the rate quoted shall be taken to prevail.

51

Annexure-7 (Para 6.18)

STANDARD TERMS & CONDITIONS (FOREIGN ENQUIRY) 1. The quotations and any order resulting from this Enquiry shall be governed by BEL’s

conditions of contract and the supplier quoting against this Enquiry shall be deemed to have read and understood the same.

2. Where counter Terms and Conditions of business have been offered by the supplier,

we shall not be deemed to be governed by those unless BEL’s specific written acceptance thereof has been given.

3. No Conditions and Terms, notice of which has not been given by the supplier while

submitting quotations, will be considered by BEL, if put forward in subsequent correspondence.

4. Quotations:

The tenderers should quote their minimum price. Negotiations, if any, will be held with L1 only in select cases, if necessary. The suppliers should submit their offer against this Enquiry. Additional information, if any, should be furnished by the suppliers in a covering letter. The quotation should be sent in a sealed envelope indicating there on Enquiry / Tender no. and closing date and the same must reach BEL’s office on or before the closing date. The late quotations will not be considered. Fax / e-mail offers are acceptable. Against each enquiry / tender. in case of two bid system, Techno-commercial and price bids should be submitted simultaneously, in separately identifiable sealed covers, both put in another envelope, giving reference to RFQ. The tenderers / authorised representatives who wish to be present during the tender

opening are welcome to be present in cases other than e-tendering.

5. Specifications: a) Materials should be offered strictly conforming to BEL’s specifications. The deviations in specifications, if any, should be clearly indicated by supplier in their quotation. The supplier should also indicate Make/Type Number of the materials offered and catalogues, technical literature and samples, wherever necessary, should be forwarded by the supplier. b) All items should conform to Government/statutory regulations with regard to Safety, handling & environment as applicable. c) Please mention the details, if you are a certified company under Quality System Standards ISO 9000 and Environmental Management System Standards ISO 14001.

6. Certificate of Compliance: For Electronics components, certificate of compliance / test certificate should be sent by the supplier for each item along with the consignment.

52

7. Terms of Price: a) Quotation should be submitted on ‘F.O.B/F.C.A Inco-terms 2000, basis indicating the

Air or Sea port of shipment. The prices should be firm and not subject to alteration on any account.

b) For Ex-Works Quotation, Packing and F.O.B charges inclusive of Inland freight charges should be indicated by the supplier in their quotation.

c) The nett weight and gross weight of the materials should be indicated by the supplier.

8. Validity: The quotation must remain valid for a minimum period of 60 days from the closing date. 9. Shipping Instructions:

a) Sea-Freight: Consignment should be shipped through BEL’s Forwarding and shipping agents whose names will be indicated in BEL’s Purchase order, and actual sea freight charges will be payable by BEL in Rupees in India.

b) Air-Freight: Consignment of Electronic items including Electronic Equipments should be dispatched to Airport through BEL’s forwarding agents, whose names will be indicated in BEL’s Purchase Order.

c) Airmail Post Parcel: All small parcels weighing upto 10 Kgs (except hazardous materials) should be dispatched by Registered Airmail Post Parcel and the Postal charges should be prepaid by the supplier and included in their invoice.

10. Insurance: The Insurance will be covered against BEL’s open Policy on receipt of declaration letter

regarding C & F value of the consignment from the supplier and the Insurance premium charges will be paid by BEL in Rupees in India.

11. Delivery Date: The supplier must indicate the firm delivery date by which the materials will be

dispatched by them from the date of receipt of BEL’s order. Should the supplier fail to deliver the stores or any consignment thereof within the period prescribed for such delivery, BEL shall be entitled at their option:

a) to recover from the supplier agreed liquidated damages, and not by way of

penalty of sum of 0.5% (2.5% in case of purchase orders placed on time preference basis) of the value of any stores not supplied in time for each week of delay or part of a week with a ceiling of 10% (25% in case of purchase orders placed on time preference basis) , or

b) to purchase elsewhere, at the risk and cost of the supplier, the stores not delivered, or.

c) to cancel the Purchase Order. In the event of action being taken under b) & c) the supplier shall be liable for

any loss which BEL may sustain but the supplier shall not be entitled to any gain on repurchase made against default.

12. Inspection: Material on its arrival at BEL’s factory / site will be inspected by BEL’s Inspection

Department and their decision in the matter will be considered final and Copy of Inspection Report will be forwarded to the supplier in case of rejections. The rejected materials will be returned to the supplier for replacement and all charges on same will have to be borne by the supplier. The pre-despatch inspection can be made by BEL /

53

nominated agency / certifying agency or by vendor himself if he is specifically authorised for self inspection. Payment of pre-despatch inspection charges will be as mutually agreed.

13. Payment: The payment will be made on presentation of shipping documents through BEL’s

bankers, mentioned in BEL’s Purchase Order either on Sight Draft basis or under Letter of Credit through a Foreign Bank.

In case of LC confirmation, the cost of confirmation shall be borne by the supplier.

Normally no request for Advance Payment is entertained. However, where Advance Payment is considered in select cases, the same may be allowed as per BEL terms, subject to furnishing Bank Guarantee from a first class Bank (verified by State Bank of India) for an amount equal to 110% of the advance released or the advance released plus estimated interest amount on the advance (calculated at the SBI PLR rate) for the period of advance likely to remain with the Supplier, whichever is higher. Release of advance will be subject to the prevailing RBI guide lines.

Penal Interest: If the payment terms involves grant of advance, then penal interest (equivalent to 2%

above the prevailing SBI PLR rate) on advance will be charged in cases where the supplier is unable to execute the order for whatever reason resulting in cancellation / short-closure of the order / delay in supplies. The delayed period will be calculated with reference to scheduled date of supplies / completion of milestones as per the purchase order.

14 Evaluation of L1 Cost to BELand compliance to RFQ conditions like delivery requirements, packing, etc.

would be the basis while evaluating L1. Payment terms including advances, if any, will be considered while working out cost to BEL.

15. PHYTOSANITARY CERTIFICATE:

The Wood packaging material including dunnage used in packing of the article is to be appropriately treated as per ISPM -15 and a Phytosanitary Certificate to be attached to the shipping documents.

16. Packing instructions as mentioned in BEL’s Corporate Standards / Drawings to be

complied. 17. In case of shelf life items, please indicate the same. 18. BEL reserves the right to accept or reject any quotation or part of the quotation without

assigning any reasons. BEL reserves the right of ordering part quantities without assigning reasons and the supplier shall supply the ordered quantity at accepted rates.

19. BEL may exercise an option of placing repeat order for a maximum quantity up to

100% of the original order quantity within 12 months from the date of original order at the same terms and conditions of the original order.

20. Price Preference to Central Public Sector Undertakings / Small Scale Sector / Others

will be applicable as per the Government order in force

54

21. Vendors are liable for de-registration / suspension / banning from the business as per the rules of the company in force.

22. The tendered rate against each item indicated in the RFQ should be indicated both in

words and figures. In case of any clerical error between the rates indicated in figures and word, the rates quoted in words would prevail. If there is any inconsistency between the rate and the value extended (after multiplication with the tender quantity), the rate quoted shall be taken to prevail.

55

Annexure-8

Para 15.1, 4) Para 18.30

Para 19.2

56

57

58

59

60

61

62

63

64

65

66

Annexure-9 (Para 16.7)

67

68

69

70

Annexure-10 Para 20

Para 20.16, 2)

STANDARD TERMS, CONDITIONS & INSTRUCTIONS TO PURCHASE ORDER (Inland) 1. Acknowledgement: An acknowledgement of this Purchase Order should be sent to BEL by the supplier

confirming their agreement regarding specifications, quantity, prices, terms of payment and delivery schedule as indicated in BEL’s Purchase Order, within 3 days of its receipt by the supplier. If no confirmation is received from Supplier within 7 days from the date of despatch of the Purchase Order, it shall be presumed that the terms and conditions of the Purchase Order are acceptable to the Supplier.

2. Price: The price indicated in the Purchase Order is firm and not subject to alteration on any

account unless specified otherwise in the terms and conditions of Purchase Order. 2.1 BEL may exercise an option of placing repeat order for a maximum quantity up to 100%

of the original order quantity within 12 months from the date of original order at the same terms and conditions of the original order.

3. Delivery Schedule: Time is the essence of contract and the materials against this Purchase Order must be

delivered by the supplier according to the delivery schedule indicated in the Purchase Order. In case of any change, the supplier should inform BEL in advance and obtain the approval for the revised delivery schedule. Should the supplier fail to deliver the materials or part thereof as per the agreed delivery schedule, BEL shall be entitled at BEL’s option either to recover from the supplier as agreed, liquidated damages a sum equivalent to 0.5% (2.5% in case of purchase orders placed on time preference basis) of the value of materials not supplied in time for every week’s delay or part thereof subject to maximum of 10% (25% in case of purchase orders placed on time preference basis) or to cancel the Order and purchase materials elsewhere at the risk and cost of the supplier.

4. Packing: The supplier will be held responsible for the stores being securely and properly packed

for tropical storage and for transport by rail, road, sea or air so as to ensure their being free from loss or damage on arrival at their destination. The packing and marking of packages shall be done by and at the expense of the supplier. Packing shall allow for easy removal and checking on site and comply with carrier’s conditions of packing or established trade practices. Material should be securely packed by the supplier and a copy of packing note should be placed just below the lid of the package. In case one consolidated Packing Note is prepared for materials packed in more than one package, copies of same should be placed in all packages with a tick mark against the items packed in that particular package. The package should bear sender’s and BEL’s full name and address on one side and BEL’s Purchase Order number, case markings, gross weight etc., on the other side. If items are packed, clubbing various orders, package for each item shall have BEL’s Purchase Order no, and your invoice no, date & Qty.

71

5. Despatch of Materials: a) Ex. Works/Ex-Godown/F.O.R dispatching station

All materials must be consigned directly to the destination specified in the Purchase Order and not on ‘self’ basis. Materials by goods / passenger train should be booked to the destination specified in the Purchase Order. Materials despatched by Lorry Service should be sent through BEL approved Transport Carrier as specified in the Purchase Order on door delivery basis to the destination specified, indicating clearly Purchase Order Number. Supply quantity shall not exceed the ordered quantity unless otherwise specified in the Purchase Order.

b) F.O.R. Destination: The freight charges for material up to destination in respect of Purchase Orders placed against quotations on ‘F.O.R. Destination’ basis will be borne by the supplier and the consignments will be sent ‘freight pre-paid’ door delivery basis. In case, consignments are booked on ‘freight to pay’ basis, freight charges incurred by BEL will be recovered from the supplier’s bill.

c) Despatch documents Despatch documents viz. Railway Receipt / Parcel Way Bill / Lorry Receipt / Airway Bill, 2 copies of Delivery Challan and Packing Notes, should be posted to in-charge Stores Department of respective SBU / Unit as specified in Purchase Order, along with the original bills (Duplicate / Transporter copy shall accompany the consignment) by the supplier immediately after despatch of materials, so as to reach sufficiently in advance of the arrival of the materials, failing which demurrage charges, if any, incurred by BEL will be recovered from the supplier’s bills. One copy of the bill should be sent to Manager Purchase concerned Unit / SBU directly. Since the air consignments are received much earlier than the documents, it is requested that the same must be booked directly to Bharat Electronics Limited and on ‘Self’ basis. Further the consignee copy of Air Way Bill should be delivered to the concerned Airlines along with the consignment, so that we can take delivery of same immediately on its arrival. This will not affect in any way the payment through Bank, wherever the same has been agreed to by BEL. In case this is not adhered to by the Supplier, the storage charges incurred by BEL will be debited to them. The supplier’s Sales Tax / Central Sales Tax No. and date as well as concerned BEL Unit’s Sales Tax No., date, TIN No.,and Central Sales Tax No, and date must be indicated by the supplier in their Delivery Challan and Bill. The Sales Tax declaration forms will be issued wherever necessary after receipt and acceptance of materials and payment made.

6. Insurance: For Purchase Orders placed against quotations on ‘F.O.R. destination’ basis the supplier shall be responsible for shortages / damages during transit and as such the consignments may be insured by him at his option and cost. For all other orders, necessary particulars of despatch must be intimated to BEL by the supplier immediately for arranging insurance, failing which the supplier shall be held liable for shortages / damages, if any, during transit. If the value of a single consignment

72

exceeds Rs. one crore (or as per the terms of the Insurance Policy), prior insurance declaration should be sent by telegram / e-mail / fax to the insurance company (Name and details of the Insurer to be furnished by BEL).

7. Inspection: Material on its arrival at BEL / site will be inspected by the Inspection Department and their decision in the matter will be final and Copy of Inspection Report will be forwarded to the supplier in case of rejections. The pre-despatch inspections, if any, as agreed will be made by BEL / nominated agency / certifying agency or by vendor himself if he is specifically authorised for self inspection. Payment towards pre-despatch inspection charges will be as mutually agreed upon. Rejected Materials The rejected materials will be returned to the supplier for replacement and all charges on same will have to be borne by the supplier. The rejected material, if not collected, will lie in BEL’s factory premises at the risk and cost of the supplier, pending receipt of disposal instructions from him. If so desired by the supplier, the rejected materials, for which no payment has been made by BEL against documents, may be packed and returned to the supplier for arranging replacement / rectification on ‘freight to pay’ basis at his cost and risk and the despatch documents will be forwarded to the supplier directly by BEL’s Manager Stores to enable him to arrange Insurance and take delivery of same. Whenever payment has already been made by BEL to the supplier against despatch documents, the rejected material will be returned to the supplier against refund of amount already paid by BEL. In such cases, the despatch document for the returned materials along with a Debit Note for the amount already paid will be negotiated through BEL’s designated Bank by BEL’s Accounts Officer (Bills Payable). The supplier shall, therefore, retire the documents and thus arrange refund of payment already received by them for rejected materials sent back to them, for replacement / rectification. The packing, freight charges etc., on replacement of returned materials shall be borne by the supplier irrespective of the terms in the Purchase Order, since such charges were already incurred and borne by BEL on the original consignment, rejected and returned to the supplier. In case the rejected materials are not required to be replaced, freight, Insurance charges etc., incurred by BEL on the original consignment shall be recovered from the supplier’s bill.

8. Guarantee: Any material / equipment supplied should be free from any defects arising from faulty material, design, workmanship or manufacturing defects and should be guaranteed for quality / satisfactory performance for a minimum period of 12 calendar months (or as specified) from the date of receipt and acceptance of materials / satisfactory installation and commissioning or 15 months (or as specified) from the date of despatch. During this guarantee period, if any defects develop arising from faulty material, design, workmanship or manufacturing defects the supplier shall remedy such defects at his own cost. If it becomes necessary, the supplier should replace any defective portion of the goods or replace the material / equipment as a whole.

9. Payment: a) Bills, in original along with duplicate copy, in respect of supplies made by the

supplier quoting BEL’s Purchase Order and date should be forwarded by the supplier directly to Manager Stores and the triplicate copy of bill should be

73

sent to Manager Purchase for information. The bills should be accompanied by despatch documents for supplies from out station and in case of local deliveries the same should be submitted along with a copy of Delivery Challan, duly signed by Manager Stores for having received the material. Unless expressly agreed to by BEL in the Purchase Order or subsequent amendment issued in writing, payment will not be made by BEL for any kind of taxes, like Sales Tax, Turnover Tax, Excise, Octroi etc. Other charges like forwarding, freight prepaid by the supplier etc., wherever admissible should be substantiated by the supplier by submitting original vouchers along with their bill.

b) The supplier may avail Bill Discounting Facility offered by various banks and forward their bills to BEL through bank for delivering same to BEL without payment. In such cases the payment of the bill will be made by BEL to the concerned bank through which the bill has been received by BEL.

c) The payment will be made against supplier’s bills by Account Payee crossed cheque / through ECS / EFT only for accepted materials within 30 days from the date of receipt of material or submission of bills whichever is later or as agreed upon.

10. Force Majeure:

Force Majeure means an event beyond the control of the supplier and not involving the supplier’s fault or negligence and which is not foreseeable. Such events may include, but are not restricted to, acts of the purchaser either in its sovereign or contractual capacity, wars or revolutions, hostility, acts of public enemy, civil commotion, sabotage, fires, floods, explosions, epidemics, quarantine restrictions, strikes, lockouts, and freight embargoes. If there is delay in performance or other failures by the supplier to perform its obligation under its contract due to event of a Force Majeure, the supplier shall not be held responsible for such delays / failures. If a Force Majeure situation arises, the supplier shall promptly notify the purchaser in writing of such conditions and the cause thereof within twenty-one days of occurrence of such event. Unless otherwise directed by the purchaser in writing, the supplier shall continue to perform its obligations under the contract as far as reasonably practical, and shall seek all reasonable alternative means for performance not prevented by the Force Majeure event. If the performance in whole or in part or any obligation under this contract is prevented or delayed by any reason of Force Majeure for a period exceeding sixty days, either party may at its option terminate the contract without any financial repercussion on either side. There may be a Force Majeure situation affecting the purchase organization only. In such a situation the purchase organization is to take up with the supplier on similar lines as above for further necessary action

11. Appropriation: Whenever under this contract any sum of money is recoverable from and payable by the supplier, BEL shall be entitled to recover such sum by appropriating in part or whole by deducting any sum then due or which at any time thereafter may become due to the supplier in this or any other contract entered by BEL as a whole, including its Units and Offices etc., with the supplier alone or in partnership with others. Should this sum be not sufficient to cover the full amount recoverable, the supplier shall pay to BEL on demand the remaining balance due.

74

12. Bribes and Gifts: Any bribe, commission, gifts or advantage given / promised or offered by the supplier to

any employee of BEL shall in addition to any criminal liability which the supplier may incur, subject the supplier to the cancellation of this and all other orders and also to payment of any loss or damage resulting from and such cancellation.

13. Indemnity: The supplier shall at all times indemnify BEL against all claims which may be made in

respect of materials for infringement of any right protected by Patent, Registration of Design or Trade Mark and shall take all risk of accidents or damage which causes a failure of the supply.

14. Arbitration:

All disputes regarding this order shall be referred to Chairman and Managing Director of BEL or his nominee for the purpose of arbitration who shall have all relevant powers provided for in the Indian Arbitration and Conciliation Act 1996 or any statutory modification thereof in force.

15. Jurisdiction:

This order shall be governed by the Laws of Indian Union in force. Only competent courts shall have the jurisdiction as provided under the Indian Arbitration and Conciliation Act 1996, or any statutory modifications thereof in force on any matter arising out of any Arbitration proceedings under this contract.

16. Reference:

The Purchase Order No. and date should always be quoted in all correspondence, Delivery Challans, Packing Notes, Bills / Invoices etc. All communication should be addressed to the Purchase Order Issuing Authority.

17. Despatch Documents:

I) Supplier should ensure that duplicate copy of invoice for transporter should accompany the consignment.

II) Invoice should bear the following: i) The ECC (……….) Number. ……. of BEL. (to be filled by Purchase

Department) ii) TIN (Tax Identification Number) (to be filled by Purchase Department) iii) Excise Chapter heading of the goods and description of the goods. (to be filled

by Supplier) iv) Excise Range and division of supplier (to be filled by Supplier) v) a) BEL Excise range address is (to be filled by Purchase Department) ------------------------------ ------------------------------ -----------------------------

b) Details of the Range, Division and Commissionerate (to be filled by Purchase Department)

------------------------------------------------------------------ ----------------------------------------------------------------- -----------------------------------------------------------------

75

18. TREM (Transport Emergency) CARD: Please ensure that the hazardous chemicals are transported to BEL premises by a driver having a transport emergency card. BEL is not responsible for any calamity during transportation till the goods reach BEL premises.

19. Any specific Terms / Conditions mentioned in PO will supersede these general terms.

76

Annexure-11 Para 20

Para 20.16, 3)

STANDARD TERMS, CONDITIONS & INSTRUCTIONS TO PURCHASE ORDER (Foreign)

1. Acknowledgement:

An acknowledgement of this Purchase Order should be sent to BEL by the supplier confirming their agreement regarding specifications, quantity, prices, terms of payment and delivery schedule as indicated in BEL’s Purchase Order, within 3 days of its receipt by the supplier. If no confirmation is received from Supplier within 10 days from the date of despatch of the Purchase Order, it shall be presumed that the terms and conditions of the Purchase Order are acceptable to the Supplier.

2. Reference: The Purchase Order No. and date should always be quoted in all correspondence,

Packing Notes, Bills / Invoices etc. All communication should be addressed to the Purchase Order Issuing Authority.

3. Price:

The price indicated in the Purchase Order is firm and not subject to alteration on any account unless specified otherwise in the terms and conditions of Purchase Order.

3.1 BEL may exercise an option of placing repeat order for a maximum quantity up to100% of the original order quantity within 12 months from the date of original order at the same terms and conditions of the original order.

**4. Delivery Schedule:

Time is the essence of contract and the materials against Purchase Order must be delivered by the supplier according to the Delivery Schedule indicated in the Purchase Order. In case of any change, the supplier should inform BEL in advance and obtain the approval for the revised Delivery Schedule. Should the supplier fail to deliver the materials or part thereof as per the agreed Delivery Schedule, BEL shall be entitled at BEL’s option either to recover from the supplier as agreed, Liquidated Damages a sum equivalent to 0.5% (2.5% in case of Purchase Orders placed on time preference basis) of the value of materials not supplied in time for every week’s delay or part thereof subject to maximum of 10% (25% in case of Purchase Orders placed on time preference basis) or to cancel the Order and purchase materials elsewhere at the risk and cost of the supplier.

(** Amended vide Office Order No. HO/591/022 dated 17.06.2011)

5. Packing: 5.1 The supplier shall pack the stores securely and properly for tropical storage and for

transport by rail, road, sea or air so as to ensure their being free from loss or damage on arrival at their destination. The packing and marking of packages shall be done by and at the expense of the supplier. Packing shall allow for easy removal and checking on site and comply with carrier’s conditions of packing or established trade practices. A copy of packing note should be placed in a prominent place on the package and also inside. In case one consolidated Packing Note is prepared for materials packed in more than one

77

package, copies of same should be placed in all packages identifying the items packed in that particular package. The package should bear vendor’s and BEL’s full name and address and the Purchase Order number, case markings, gross weight etc. Payment of demurrage charges etc. resulting out of inadequate details on the packing is liable to be reimbursed by the Supplier.

5.2 PHYTOSANITARY CERTIFICATE: The Wood packaging material including dunnage used in packing of the article is to be appropriately treated as per ISPM -15 and a Phytosanitary Certificate to be attached to the shipping documents

6. Insurance:

Insurance will be covered against Buyers open policy. However beneficiary should inform the value of the Invoice by a letter / fax / e-mail to the Insurer …… (Name and details to be furnished by BEL) and a copy of the letter / fax / e-mail shall be sent along with the negotiating documents for payment.

7. Inspection:

Material on its arrival at BEL / site will be inspected by the Inspection Department and their decision in the matter will be final and Copy of Inspection Report will be forwarded to the supplier in case of rejections. The pre-despatch inspections, if any, as agreed will be made by BEL / nominated agency / certifying agency or by vendor himself if he is specifically authorised for self inspection. Payment towards pre-despatch inspection charges will be as mutually agreed upon. In case of rejection, the supplier has to send a letter of recall / RMA (Return Material Authorisation) to BEL as soon as the receipt of rejection report from BEL.

8. Despatch of Material:

a) Despatch / Shipment by aircrafts / vessels calling at ports in Pakistan-Prior to Indian Ports and flying Pakistani Flag and or manned by Pakistani crew is prohibited.

b) The despatch of material should be routed through BEL’s approved freight forwarder only as indicated in the Purchase Order.

c) The despatch details such as Airway Bill / Bill of lading / Invoice copies should be faxed / e-mailed to the Authority issuing Purchase Order.

d) Test Report / C of C (certificate of conformance) / manufacturer’s certificate / manuals etc. wherever necessary should be sent along with the material and a copy of the above should be sent along with negotiating documents for payment.

e) Normally material should not be sent by courier services. However, consignment less than 10 kg may be despatched by Air Post Parcel / EMS (Speed Post) provided it is indicated in the Purchase Order.

9. Warranty:

a) Any material / equipment supplied should be free from any defects arising from faulty material, design, workmanship or manufacturing defects and should be warranted for quality / satisfactory performance for a minimum period of 12 calendar months (or as specified) from the date of receipt and acceptance of materials / satisfactory installation and commissioning or 15 months (or as specified) from the date of despatch. During this warranty period, if any defects develop arising from faulty material, design, workmanship or manufacturing defects the supplier shall remedy

78

such defects at his own cost. If it becomes necessary, the supplier should replace any defective portion of the goods or replace the material / equipment as a whole.

b) To and fro freight charges including insurance charges to be borne by the supplier for

replacement or re-export of the rejected item within the warranty period.

10. Force Majeure: Force Majeure means an event beyond the control of the supplier and not involving the supplier’s fault or negligence and which is not foreseeable. Such events may include, but are not restricted to, acts of the purchaser either in its sovereign or contractual capacity, wars or revolutions, hostility, acts of public enemy, civil commotion, sabotage, fires, floods, explosions, epidemics, quarantine restrictions, strikes, lockouts, and freight embargoes. If there is delay in performance or other failures by the supplier to perform its obligation under its contract due to event of a Force Majeure, the supplier shall not be held responsible for such delays / failures. If a Force Majeure situation arises, the supplier shall promptly notify the purchaser in writing of such conditions and the cause thereof within twenty-one days of occurrence of such event. Unless otherwise directed by the purchaser in writing, the supplier shall continue to perform its obligations under the contract as far as reasonably practical, and shall seek all reasonable alternative means for performance not prevented by the Force Majeure event. If the performance in whole or in part or any obligation under this contract is prevented or delayed by any reason of Force Majeure for a period exceeding sixty days, either party may at its option terminate the contract without any financial repercussion on either side. There may be a Force Majeure situation affecting the purchase organization only. In such a situation the purchase organization is to take up with the supplier on similar lines as above for further necessary action.

11. Appropriation: Whenever under this contract any sum of money is recoverable from and payable by the supplier, BEL shall be entitled to recover such sum by appropriating in part or whole by deducting any sum then due or which at any time thereafter may become due to the supplier in this or any other contract entered by BEL as a whole, including its Units and Offices etc., with the supplier alone or in partnership with others. Should this sum be not sufficient to cover the full amount recoverable, the supplier shall pay to BEL on demand the remaining balance due.

12. Indemnity: The supplier shall at all times indemnify BEL against all claims which may be made in respect of materials for infringement of any right protected by Patent, Registration of Design or Trade Mark and shall take all risk of accident or damage which causes a failure of the supply.

13. Mode of Settlement Mode of settlement of disputes / differences, if any, shall be through Arbitration. However, when a dispute / difference arises, BEL and the supplier shall first try to resolve the same amicably by mutual consultation. If the parties fail to resolve the dispute by such mutual consultation within twenty-one days, then, depending on the position of the case, either BEL or the supplier shall give notice to the other party of its intention to commence arbitration.

79

The supplier has the option to choose either Indian Arbitration and Conciliation Act, 1996 or Arbitration in accordance with the provision of UNCITRAL (United Nations Commission on International Trade Law) Arbitration Rules. Venue of Arbitration The venue of arbitration shall generally be the place from where the contract has been issued except when the supplier opts for Arbitration, in accordance with the provision of UNCITRAL, Arbitration Rules, the venue can be a neutral country.

14. Jurisdiction: This order shall be governed by the Laws of Indian Union in force. Only competent courts shall have the jurisdiction as provided under the Indian Laws.

15. Contract: It is expressly understood and agreed by and between the supplier and Bharat Electronics Limited that Bharat Electronics Limited (the Indian Public Sector Undertaking) is entering into this agreement solely on its own and not on behalf of any other person or entity. In particular, it is expressly understood and agreed that the Government of India is not a party to this agreement and has no liabilities, obligations or rights hereunder.

80

Annexure-12 Para 20.16, 4)

INSTRUCTIONS FOR DESPATCH BY AIR FREIGHT

1. Packing:

a) Materials should be securely packed in suitable packing cases to avoid damage in transit. Electronic Components like Resistors, Capacitors etc., must be strip packed and not packed loosely. BEL’s Purchase Order number in full should be clearly marked on each case.

b) PHYTOSANITARY CERTIFICATE: The Wood packaging material including dunnage used in packing of the article is to be

appropriately treated as per ISPM -15 and a Phytosanitary Certificate to be attached to the shipping documents.

Instructions for Despatch:

a) All Airfreight consignments should be despatched through any carrier other than Pakistani Airlines to ……. Airport (the details should be furnished by BEL) on ‘freight to pay’ basis and actual air freight charges will be payable by BEL in Rupees in India. Cargo should be routed through BEL’s approved freight forwarding / consolidating agent indicated in the Purchase Order. Consignee’s name and address in the Airway bill should be indicated as under: Bharat Electronics Limited, ---------------------------------- ----------------------------------, INDIA.

b) Air Way Bill shall contain the following: i) BEL’s Purchase Order No.

ii) Description of goods iii) L/C number iv) Import License No. c) Two copies of invoices along with material should be handed over to BEL’s

freight forwarding for arranging onward despatch to India.

Invoice along with one copy of Air Way Bill should be sent by Courier /Faxed / e-mailed to: The Head Purchase,

---------------------------- (Name of Unit/SBU), Bharat Electronics Ltd., ---------------, INDIA. (Address details to be furnished by BEL)

2. Despatch by Speed Post/Air Post Parcel (APP): Small parcels weighting upto 10 kgs. should normally be sent by Registered Air post Parcel / Speed post (relevant mode will be indicated in BEL’s Purchase Order) to avoid payment of minimum Airfreight Charges. The parcel should be addressed to Head Customs Clearance Cell, Bharat Electronics Limited, ----------------- (address to be furnished by BEL) INDIA, and BEL’s Purchase Order number must be indicated on the

81

Post Parcel Receipt / Speed Post Receipt. Only postal charges should be pre-paid by the suppliers and same should be included in their invoice.

3. Packing and FOB Charges:

Actual packing and forwarding charges to airport inclusive of Inland transportation charges wherever payable by BEL as per terms of purchase order should be prepaid by the suppliers/freight forwarding agent and included in their Invoice / Air Way Bill.

4. Insurance:

a. Insurance of materials despatched by Airfreight / Speed Post /Airmail Post Parcel are covered against BEL’s open policy. The suppliers have to send declaration letter by fax/e-mail to the Insurer …… (Name and details to be furnished by BEL), giving full particulars, such as Purchase Order number and Mode of despatch. A copy of invoice and a copy of Air Way Bill (if available) should be sent along with the declaration.

b. If any single consignment exceeds Rs. Twenty million in value( in equivalent

Foreign Currency) prior insurance declaration should be sent by Telegram/e-mail/Fax to the above Insurance Company (Name and details to be furnished by BEL

5. Payment:

a) The supplier should airmail/Courier, either directly or through their Bankers, the following Original shipping documents, under Sight Draft payment terms quoting BEL’s Purchase Order number, to BEL’s Bankers, for arranging payment along with other required documents as per Terms and Conditions mentioned in the Purchase Order.

1) One copy of Commercial Invoice duly signed by the supplier. 2) One copy of Certificate of origin on the prescribed form, (wherever necessary). 3) One copy of packing note (if the details are not indicated in the commercial

invoice). 4) One copy of letter of Declaration addressed to the Insurance Company. 5) One copy of original APP (Air Post Parcel) receipt / Air Way Bill.

b) Wherever ‘Letter of Credit’ has been received by the supplier from a foreign bank the above mentioned Original Shipping documents should be forwarded by them to that Bank while negotiating.

If the supplier requires confirmed Letter of Credit, the charges are to be borne by the

supplier.

82

Annexure-13 Para 20.16, 5)

INSTRUCTIONS FOR DESPATCH BY SEA FREIGHT

1. Packing: Material should be securely packed in sea-worthy wooden packing cases for shipment

by sea-freight by the supplier. One copy of the Invoice / Packing Note should be placed just below the lid of the package. In case one consolidated Invoice / Packing Note is prepared for materials packed in more than one package, copies of same should be placed in all packages with tick mark against the items packed in that particular package.

PHYTOSANITARY CERTIFICATE:

The Wood packaging material including dunnage used in packing of the article is to be appropriately treated as per ISPM -15 and a Phytosanitary Certificate to be attached to the shipping documents.

The cases should bear the following marks:

3” wide strips should be painted with deep brown paint diagonally on the top bottom and the two opposite sides of the cases.

a) Front view (one side) of the case should be marked as under: BHARAT ELECTRONICS LIMITED ---------------------------- VIA ------------ (Name of the sea port in India) b) Back view (opposite side) should be marked as under:

P.O. No. ----------------------------- Case No ----------------------------- Measurements -------------------- Gross Weight ---------------------- Net Weight -------------------------

c) Payment of port charges are calculated on the basis of measurements and gross

weight of the cases and as such this information must be indicated by the supplier in their Invoice / Packing notes failing which the actual measurements and gross weight of the cases are to be taken by BEL physically on its arrival and furnished to Port authorities before delivery of the consignment, resulting in delay and payment of demurrage charges, which will have to be reimbursed to BEL by the supplier. The ‘Case Marking’ as appearing on the cases, Bill of Lading and Invoice / Packing Notes should be absolutely identical.

BEL

83

2. Mode of Shipment:

a) All consignments in Full Containers: To: Inland Container Depot (ICD) -------------------- . VIA----------------Sea port, INDIA. Regional Manager

Bharat Electronics Limited, (Address to be furnished by BEL in PO)

b) All consignments in Less Container Load (LCL) To: ------------- Sea Port, INDIA.

3. Shipping Instructions:

a) Shipping arrangement for sea-freight consignments will be made by the Forwarding Agents whose names and addresses are given in the Purchase Order. Adequate notice of not less than 6 weeks about the readiness of cargo for shipment should be given to them by the supplier for finalising the shipping arrangements. Cargo has to be made available for shipment at the Port on the date specified by the Forwarding Agents. All Sea freight consignments should be shipped as per Clause 2.

b) Bill of lading should be drawn so as to show the Consignee as BEL / Bankers. Bill of Lading should show that the goods have been shipped and should be marked ‘freight payable at destination’. The following ‘notify’ address and BEL’s Purchase Order No. should be indicated in the Bill of Lading:

Regional Manager

Bharat Electronics Limited, (Address to be furnished by BEL in PO)

4. Freight Charges: The actual sea-freight Charges will be payable by BEL in Rupees in India. The Bill of

Lading should therefore be marked ‘freight payable at destination’ and the amount of freight charges payable by BEL should be indicated on the Bill of Lading.

5. Packing and F.O.B. Charges:

‘F.O.B.’ will be ‘F.O.B. Vessel at Port of shipment’. The actual packing and F.O.B. charges inclusive of inland transportation charges, wherever payable by BEL as per terms of BEL’s Purchase Order, should be pre-paid by the supplier and included in their invoice.

6. Insurance:

a) The insurance of the materials despatched by sea freight should be covered against

BEL’s Open Policy by the supplier by sending a declaration letter by Fax/e-mail giving full particulars i.e. mode of despatch, name of ship, number of cases, short description of material and C & F value to the Insurer …… (Name and details to be furnished by BEL). The declaration should be sent by Airmail / Courier along with a copy of Invoice and Bill of Lading (wherever readily available). Insurance Premium will be paid by BEL directly in Rupees.

84

If any single consignment exceeds Rs. Twenty million in value( in equivalent Foreign Currency) prior insurance declaration should be sent by Telegram/e-mail/Fax to the above Insurance Company (Name and details to be furnished by BEL). No separate Insurance certificate will be issued by the Insurance Company and copy of supplier’s declaration will be treated as an evidence for having covered the Insurance of the Consignment.

7. Advance Shipping documents:

The following copies of shipping documents must be sent to BEL directly by airmail / courier by supplier for BEL’s advance information and to initiate action for clearance of consignment addressed to : THE HEAD, CUSTOM CLEARANCE CELL, BHARAT ELECTRONICS LIMITED, (Address details to be furnished by BEL), INDIA.

a) 2 copies of Commercial Invoice duly signed by the supplier. b) 2 copies of certificate of Origin (wherever required) c) 2 copies of Packing note. d) 1 copy of letter of declaration addressed to Insurance Company regarding

Insurance. e) 2 copies of duplicate non-negotiable Bill of Lading.

8. Payment:

Payment will be arranged by Sight Draft/Letter of Credit as per terms of Purchase Order on presentation of the following shipping documents:

a) 2 copies of Commercial Invoice duly signed by supplier. b) 2 copies of Packing Note (required if the details of case number, markings,

measurements, gross weight, net weight and contents of Individual cases are not already shown in the commercial invoice against Sl. No. a)

c) 1 copy of Letter of declaration addressed to the Insurance Company regarding insurance of the consignment.

d) 2 copies of original clean Bill of Lading.

85

Annexure-14 Para 24.1, i)

Date: PURCHASE DEPARTMENT………………… Age Analysis of the pending Purchase Requisitions yet to be converted to Purchase Orders for the month of …………. Criteria: Details of parts pending for ordering for more than 21 days Sl. No. PR No. PR Date Part No. /

Description UOM Qty Reasons for pendancy

1

2

3

4

5

6

7

8

9

10

86

Annexure-15 Para 24.1, ii)

Date:

PURCHASE DEPARTMENT…………………

Age and Cause Analysis of receipts which are pending issue of ICRRs / GRs

Criteria : Details of CRRs / GRs pending for conversion to ICRRs / GRs more than 3 days

Sl. No. CRR/GR No. CRR/GR Date Reasons for pendancy

1

2

3

4

5

6

7

8

9

10

87

Annexure-16 Para 24.1, iii)

Date: PURCHASE DEPARTMENT………………… Age and Cause analysis of claims pending on account of non-supply of shortages / rejections

Sl. No.

PO No.

Part No.

Description

GR/ICRR No.

UD No.

Supplier

Qty (Shorta

ge/ Rejecti

on)

UOM Unit Rate

Total Value

Rs. Rema

rks

1

2

3

4

5

6

7

8

9

10

88

Annexure-17

Para 24.1, iv) Date:

PURCHASE DEPARTMENT…………………

Analysis of supplies pending beyond 3 months of stipulated delivery dates for the month of …………. Criteria : List of items pending for supply beyond 3 months of stipulated delivery date

Sl. No.

Supplier Name

PO No.

PO Date

Accepted Delivery Date as per order

Part No. UOM Qty. Reasons for

pendancy

1

2

3

4

5

6

7

89

Annexure-18 Para 24.1, v)

Date:

PURCHASE DEPARTMENT…………………

Category wise analysis of the Purchase Orders Placed

Criteria: Placing of PO

Value Sl. No. Category No. of

POs No. of Items Foreign

Currency Rs.

Foreign

NYRO

Direct

SIRO

Local

90

Annexure-19 Para 24.1, vi)

Date:

PURCHASE DEPARTMENT…………………

Requirement of cash outflow in current and next month on the basis of expected delivery of materials, PO placed, PR pending for projection in Cash Flow Statement

PRs POs Anticipated Del.

Schedule Anticipated Del.

Schedule

Total Rs.

Estimated Value Rs. Estimated Value Rs. Sl. No.

PR No.

Current Month

Next Month

Current Month

Next Month

Current Month

Next Month

1

2

3

4

5

91

Annexure-20 Para 24.1, vii)

Date:

PURCHASE DEPARTMENT…………………

Criteria: Monthly Pending supplies/POs where advance payment is made

Sl. No.

Supplier Name PO No. PO

Date

Delivery

schedule as per

PO.

Date of receipt

of goods

Advance

amount paid

Balance Amount pending

Reasons

1

2

3

4

5

92

Annexure-21 Para 24.1, viii)

Date: PURCHASE DEPARTMENT…………………

Criteria: Quarterly pending Payments for greater than 3 months against supplies made for the quarter ending -----

Sl. No.

Supplier Name

PO No.

PO Date

Delivery schedule as

per PO.

Date of receipt of

goods

Amount pending

Reasons

1

2

3

4

5

93

Annexure-22 Para 24.1, ix)

Date:

PURCHASE DEPARTMENT…………………

Analysis of the lead times taken from Receipt of Purchase Requisitions to placement of orders For the month of……………………………

Sl. No. PO No. PO Date PR No. PR Date

No. of days taken for conversion

(PR to PO) Remarks

1

2

3

4

5

Average ************

94

Annexure-23 Para 24.1, x)

Date:

PURCHASE DEPARTMENT…………………

Price Trends of typical Mechanical / Electronic items etc. over previous year (Country Of origin-wise)

Sl. No.

Price during last year

Current year Price Trend Percentage Remarks

1

2

3

4

5

95

Annexure-24 Para 24.1, xi)

Date:

PURCHASE DEPARTMENT…………………

Cases of Purchase of Proprietary Articles

Value Sl. No.

Name of Supplier

No. of POs

(Euro, USD etc) Foreign

Currency Rs. Remarks

1

2

3

4

5

6

7

8

9

Total

96

Annexure-25 Para 24.2, i)

Date:

PURCHASE DEPARTMENT…………………

COMMITMENTS ENTERED DURING THE QUARTER OF THE YEAR ………………….

……. QUARTER: FROM ……….. TO ………….. DEFENCE (ALL FIGURES IN LAKHS ONLY)

PROFORMA

Sl.No. COMMITMENTS FOR US$ PD

Stg DKR Fr France

Sw. Franc DGL JN It

Lira Sw Kr

Belg Fr

SING $ EURO ATS

Other Rs.

Lakhs

TOTAL Rs.

Lakhs

i) RMC in FE ii) Capital goods iii) Knowhow/TOT iv) Others TOTAL EXCHANGE

RATE

PHASING OF OUTGO

a) 2009-10 b) 2010-11 c) 2011-12 d) 2012-13

TOTAL

97

Date:

PURCHASE DEPARTMENT…………………

COMMITMENTS ENTERED DURING THE QUARTER OF THE YEAR ………………….

……. QUARTER: FROM ……….. TO ………….. CIVIL (ALL FIGURES IN LAKHS ONLY) PROFORMA

Sl.No. COMMITMENTS FOR US$ PD

Stg DKR Fr France

Sw. Franc DGL JN It

Lira Sw Kr

Belg Fr

SING $ EURO ATS

Other Rs.

Lakhs

TOTAL Rs.

Lakhs

i) RMC in FE ii) Capital goods iii) Knowhow/TOT iv) Others TOTAL EXCHANGE

RATE

PHASING OF OUTGO

a) 2009-10 b) 2010-11 c) 2011-12 d) 2012-13

TOTAL

98

Annexure-26 Para 24.2, ii)

Date:

PURCHASE DEPARTMENT…………………

Purchase from the Small Scale Sector

Sl. No.

Total No. of POs Total Value No. of POs

released on SSI SSI Value % SSI Value

compared to Total Value

1

99

Annexure-27 Para 24.2, iii)

Date:

PURCHASE DEPARTMENT………………… Any other matter which needs to be reported to Government and other outside agencies in respect of Purchase matters As on -------------- (when required, as per the desired format)

100

Annexure-28

Para 20.17

101

102

103

Annexure-29 (Para 8.0, 8.2,

Note 3,& Para 8.3)

104

105

106