Odisha General Financial Rules 2023 – Procurement & Inventory Study Notes

Universal Applicability of Procurement Instructions

These rules apply to every form of tender or proposal notice—Advertised, Limited, Single-source, Expression of Interest (EOI), Pre-qualification, Registration, etc.—irrespective of whether the invitation is open, restricted to a few firms, or issued to a single party.
Exception: Instructions do not apply to procurements executed under Rule-220 and Rule-221 (small-value local purchases).
Significance: The clause safeguards the constitutional principles of equality (Article 14) by ensuring that—even when only one firm is approached—the spirit of competition, fairness, and transparency permeates the procedure unless specifically exempted.

Definition of “Goods” – Rule 217

• “Goods” embrace tangible items—articles, materials, commodities, livestock, furniture, fixtures, raw materials, spares, instruments, machinery, equipment, industrial plants, vehicles, medicines, accessories—as well as integrated machinery lines and even intangible products such as software licences, technology transfer, patents, intellectual property.
• Explicit exclusion: books, periodicals, publications for libraries.
• Incidental Works/Services: Transportation, insurance, installation, commissioning, training, maintenance are deemed part of the goods contract.
Connection: Establishes why subsequent rules on goods automatically cover services like installation without invoking the “services” chapter.

Authorities Competent to Procure Goods – Rule 218

Contracts must honour the financial limits fixed under Delegation of Financial Powers Rules 1978 (DFPR) plus any department-specific orders.
Implication: Always cross-check the DFPR ceiling before committing expenditure. Violating competence leads to personal liability under OGFR disciplinary provisions.

Registration of Suppliers – Rule 219

1. Departments/HoDs periodically register suppliers for items of recurring need.

2. Registration process must be fair, transparent, and well-publicised.

3. Due-diligence parameters: credentials, manufacturing capacity, QA systems, past performance, after-sales service, financial health.

4. Tenure: $1$ to $3$ years; renewal requires fresh application. New suppliers can join any time if criteria met.

5. Performance is continually monitored; firms can be removed for breach, delay, sub-standard supply, false declarations, or any reason that, in Government’s view, hurts public interest.

6. Approved supplier lists must be placed on departmental/e-Procurement websites—ensuring industry visibility and right-to-information compliance.
   Ethical Angle: An objective register prevents cronyism and encourages MSME participation.

Direct Purchase without Quotation – Rule 220

Threshold: up to $\text{Rs }25{,}000$ per occasion.
Procedure: Competent officer records a certificate—
“I … am personally satisfied that these goods are of requisite quality and purchased from a reliable supplier at a reasonable price.”
Example: Running-repair purchase of a printer cartridge by a Sub-Divisional Office.
Risk Mitigation: Personal certification creates fiduciary accountability; misuse can attract audit objection.

Local Purchase Committee (LPC) – Rule 221

Scope: $\text{Rs }25{,}001$ to $\text{Rs }1{,}50{,}000$.
• Three-member committee (levels decided by competent authority).
• Joint market survey for price, quality, specification, vendor reliability.
• Collective certificate declaring conformity with specs, market rate, vendor reliability and non-debarment.
• Provides collegial decision-making, dilutes individual bias.
Hypothetical Scenario: District HQ needs networking switches worth $\text{Rs }1{,}10{,}000$; LPC visits local IT market, compares at least three shops, records findings, issues order.

Standard Methods to Obtain Bids – Rule 222

(i) Advertised Tender Enquiry (ATE)
(ii) Limited Tender Enquiry (LTE)
(iii) Single Tender Enquiry (STE)
Decision Tree: Value, urgency, uniqueness, and known supplier base guide the choice.

Advertised Tender Enquiry – Rule 223

• Mandatory for estimates ≥ $\text{Rs }10{,}00,000$ (except Rule-220/221/224 cases).
• Publish brief in at least one local & one national newspaper + upload full bid document on website/e-proc portal. No cost for downloaded docs (promotes Ease of Doing Business).
• Global sourcing allowed only beyond $\text{Rs }200\ \text{crore}$ (or revised FD limit)—aligns with Aatmanirbhar Bharat policy.
• Bid Time: Minimum $3$ weeks domestic; $4$ weeks if foreign bids expected. Urgency relaxation needs next-higher authority + Finance concurrence.
Ethical Lens: Balances openness with realistic timelines, curbing insider advantage.

Limited Tender Enquiry – Rule 224

• Default for value ≤ $\text{Rs }10{,}00,000$.
• Documents sent by speed-post/courier/e-mail to >3 registered firms; notice also hosted on website.
• Unsolicited bids disallowed—but mechanism for future registration must exist.
• LTE may exceed $\text{Rs }10{,}00,000$ if:
a) Urgent demand certified;
b) Public-interest reasons recorded;
c) Sources are definitely known, fresh sources improbable.

Single Tender Enquiry & Proprietary Article Certificate – Rule 225

Permitted when:

1. Only one manufacturer exists (monopoly).

2. Emergency requires immediate purchase from a specific source.

3. Standardisation/compatibility with existing equipment.
   Procedure: Competent Technical Expert’s advice + Proprietary Article Certificate (PAC) citing make/model exclusivity, FA concurrence, authority approval.
   Ethical Caution: PAC misuse is a classic audit red flag; documentation must be water-tight.

Two-Stage Bidding – Rule 226

Used when specs cannot be frozen without bidder input (rapid tech change, R&D, risk assessment).
Stage 1: Technical bids (no price) → evaluation & discussions → refine specifications.
Stage 2: Invited bidders submit final technical + price bids against revised specs; bidders may withdraw without penalty if scope changed.
Real-world Analogy: Procuring an AI-enabled traffic-management system where Govt needs market intelligence before firming TOR.

Electronic Reverse Auction – Rule 227

An online, real-time descending-price auction. Preconditions:
• Detailed description feasible;
• Competitive market exists;
• Evaluation criteria fully monetisable.
E-auction notice contains access, registration, start-close timing, and conduct norms.
Benefit: Drives prices to true market discovery, leveraging platform analytics.

Two-Bid Tender Enquiry (Simultaneous) – Rule 228

• Bidders submit sealed technical and financial bids simultaneously.
• Technical bid opened & evaluated first; only qualifying bids proceed to financial opening.
Difference from Two-Stage: Specs are already firm; price is sealed at outset.

Miscellaneous Goods Rules

Late bids rejected (Rule 229); Agent quotes need manufacturer authorisation & warranty back-to-back (Rule 230).

Bidding Document Structure – Rule 231

Chapter 1 Instructions, 2 Conditions, 3 Schedule, 4 Specs, 5 Price Schedule, 6 Contract Form, 7 Std Forms. Model doc link: https://eprocure.gov.in/…/MTD Goods NIC.pdf.

Advance Payments – Rule 232

• Private firms: ≤ $30\%$ with equal BG.
• State/CG/PSUs: ≤ $40\%$.
• Ordnance Factory arms: $100\%$.
• AMC advances: ≤ six-months’ payable amount with BG.
Finance Dept may relax.

Buy-Back & Maintenance – Rule 233 & 234

• Include trade-in clause when replacing old assets; define hand-over timing.
• Paid maintenance starts after free-warranty period.

Consulting Services (Part-C / Section-I)

Definition – Rule 235

Primarily intellectual, non-physical, project-specific outputs—management advice, feasibility studies, engineering, policy, training. Retired employee engagement excluded.

Competent Authority – Rule 236

Admin Dept & HoD within DFPR monetary limits; expenditure depends on budget availability.

Need Assessment – Rule 237 & 238

Engage consultants when in-house expertise lacking. Estimate cost using market rates and benchmarking with similar assignments.

Scope & Source Identification – Rule 239–241

Prepare clear objectives, tasks, eligibility. For cost ≤ $\text{Rs }25{,}00,000$ build long-list informally; above that, publish EOI on e-Procurement portal + newspapers. At least three consultants must be shortlisted.

TOR & RFP – Rule 242–243

TOR: objectives, tasks, schedule, Govt inputs, deliverables.
RFP packs: Invitation letter, instructions, TOR, eligibility, key positions, evaluation criteria, formats, draft contract, review procedures. Standard FD OM 37323/F dated 30-11-2018 may be adapted.

Bid Receipt & Opening – Rule 244–245

Two-bid system; technical opened first. Late bids rejected.

Evaluation & Selection – Rule 246–250

• Consultant Evaluation Committee (CEC) with domain experts documents reasons.
• Open financial bids of technically qualified only.
Selection Methods:

1. QCBS – weightage e.g. $70:30$, $60:40$ (tech:max $80\%$). Highest combined score wins.

2. LCS – for routine assignments; lowest cost among technically qualified wins.
   Significance: QCBS balances innovation/quality vs budget; LCS emphasises economy where specs are standard.

Single-Source / Nomination – Rule 251

Allowed for continuity, emergency, proprietary expertise, or special circumstances. Requires higher-authority approval and price-reasonableness proof.

Negotiations – Rule 252

Not mandatory. If scope changes, negotiate without raising cost beyond original bid. QCBS failure → retender; LCS failure with $L<em>1$ → offer $L</em>1$ price to $L_2$.

Contract Monitoring – Rule 253

Task-force approach to keep deliverables aligned.

Design Competitions – Rule 254

For logos/symbols; wide publicity; expert jury disclosure.

Outsourcing of Non-Consulting Services (Section-II)

Definition – Rule 255

Physical, measurable services with clear performance standards (housekeeping, security, facility management, ICT support). Offices ≥ $40,000$ sq ft may adopt Comprehensive Facilities Management (CFM).

Outsourcing Framework – Rule 256–259

• Permit only when internal manpower inadequate.
• Identify service, estimate cost, ensure budget, then prepare Tender containing scope, inputs, eligibility, statutory obligations (EPF/ESI/GST, Labour laws).

Model Documents & E-Platforms – Rule 260–261

FD website hosts model RFPs (small offices & CFM). Services can be procured via GeM, MSTC, State e-Procurement—mandatory Reverse Auction & analytics to test price sanity.

Invitation & Evaluation – Rule 262–264

Value ≤ $\text{Rs }10{,}00,000$ → Limited Tender to ≥ $3$ firms.
Above $\text{Rs }10{,}00,000$ → Advertised tender in 1 English + 1 Odia daily + website.
Evaluation:
• Routine jobs: technical compliance, then Least Cost.
• CFM: technical score ≥ $70\%$ qualifies; lowest cost among qualifiers wins.
Service charge floor $3.85\%$ (3 profit + 0.85 transaction) and cap $7\%$ ensure sustainability against predatory bidding.

Nomination & Negotiation – Rule 265–266

Exceptional nominations need higher approval. Financial negotiation permissible only for scope-linked reductions; never to inflate price.

Monitoring – Rule 267

Continuous oversight to secure service outcomes; poor performance leads to penalties or blacklisting.

Inventory Management – Chapter 7 (Rule 268 ff)

Scope

Applies to all Departments; supplements specialised rules for Works, Forest, Jails, Agriculture, etc. Departments may issue detailed SOPs consistent with OGFR.
Stores records must be accurate; expenditure usually booked under Contingencies (unless otherwise classified).

Purchase Linkage – Rule 269

All inventory procurement must obey Chapter-6 procurement procedures—guaranteeing price-reasonableness and transparency.

Receipt of Goods – Rule 270

1. Verify against Purchase Order: quantity, specs, absence of damage.

2. Count/measure/weigh; perform visual & technical inspection.

3. Enter details in Stock Register (preferably IT-based), signed by Store-in-Charge.

4. Provide supplier acknowledgement as per contract.
   Example: After receiving $500$ bags of cement, JE weighs random bags, matches test certificates, records in MB/Stock register.

Ethical, Practical & Real-World Insights

• Transparency vs Urgency: Rules embed avenues (Rule 224(iv), 225(ii)) to bypass open tender during emergencies but insist on recorded justification—balancing agility with auditability.
• Digital Push: Mandatory web-hosting, free download, e-Reverse Auction illustrate Odisha’s alignment with Digital India, reducing corruption opportunities tied to sale of paper documents.
• MSME & Competition: Registration lists, low-value purchase ceilings and LPC give smaller local suppliers fair access without costly nationwide advertising.
• Fiscal Prudence: Advance payment caps, buy-back, maintenance planning guard against locking public funds while ensuring lifecycle value.
• Labour Ethics in Outsourcing: Service-charge floor prevents exploitative zero-margin bids that later jeopardise statutory wage payments.
• Audit Trail: Every deviation (single tender, time relaxation, nomination) demands written reasons and higher approval—creating a robust trail for CAG/AG audits.

Quick Reference Thresholds (All values inclusive of GST/Freight unless specified)

• Direct purchase without quotation: $\le 25,000$
• LPC purchase: $25,001$ – $1,50,000$
• Advertised Tender mandatory: $\ge 10,00,000$
• Global Tender bar: <200\ \text{crore}
• Technical bid qualification cut-off (CFM): $70\%$
• Advance to private firms: $\le 30\%$ with BG
• Minimum Service Charge (outsourcing): $3.85\%$

These consolidated notes provide a one-stop revision tool, integrating statutory text with interpretative commentary, numerical limits, practical illustrations, and ethical context—all indispensable for mastering the Odisha General Financial Rules 2023 procurement & inventory framework.