Purchase Policy

BHEL Purchase Policy-2013 Overview

  • Company Information: Bharat Heavy Electricals Limited (BHEL) is based in New Delhi, India, and plays a crucial role in the power generation sector.

  • Purpose of the Policy: The Purchase Policy-2013 aims to streamline procurement processes to meet quality, cost, and efficiency expectations in BHEL's operations.

Foreword and Objectives

  • Manufacturing Capacity: BHEL has increased its capacity to 20,000 MW per annum to support national energy goals.

  • Competitive Environment: The policy emphasizes reducing manufacturing and project execution timelines to stay competitive.

  • Transparency and Quality: Efforts to enhance supplier relationships and procurement processes focus on transparency and quality materials.

  • Task Force Composition: A dedicated team of experts reviewed and formulated the revised purchase policies.

Key Components of the Policy

Chapter 1: Purchase Policy

  • Scope of Application: Effective for all purchase enquiries/tenders post-issue, superseding the previous policy from 1998.

  • Objectives:

    • Ensure material and service procurement at optimum prices and quality standards.

    • Foster long-term relationships with suppliers.

  • Supplier Registration: Ongoing evaluations to maintain a reliable and effective supplier base.

  • Estimates: Preparation of estimates is critical, using market rates and historical data.

Procurement Methods

  • Tender System: A structured approach involving Open, Limited, and Single Tenders depending on value and supplier availability.

    • Open Tender: Required for purchases above Rs 20 Cr, ensures competitive pricing and evaluations.

    • Limited Tender: Directly addresses registered suppliers and considers performance ratings before engagement.

    • Single Tender: Only in exceptional cases, needs justifications and is strictly controlled.

Special Processes

  • Reverse Auction: Preferred method for certain procurements.

  • E-Procurement: Use of electronic methods to enhance efficiency.

  • Quotations and Tenders: Procedures for submission, evaluation and approvals are detailed out to enhance clarity.

Decision Making and Committee Structures

  • Tender Processing: Involves committees for technical and financial evaluations, with roles assigned to various levels of management.

  • Negotiation: Price negotiations occur before finalizing orders, with guidelines preventing conflicts of interest.

  • Abnormally Low Bids: Special procedures to evaluate and address concerns around bids significantly below estimates.

Key Guidelines and Responsibilities

Delegation of Powers

  • Clear hierarchies are established regarding approval limits for various transaction types, ensuring accountability and adherence to budgetary constraints.

  • Procurement for small items can bypass standard procedures with documented justifications.

Miscellaneous Instructions

  • Supplier Eligibility: Agents cannot represent multiple suppliers in the same tender, enhancing fair competition.

  • Materials Management: Emphasis is placed on managing materials to optimize costs and ensure timely delivery.

  • Feedback Mechanism: Regular review and adaptation of the policy are essential based on operational feedback and market changes.

Financial Concurrence and Commitment

  • A systematic review of financial limits for procurements ensures oversight and control mechanisms are present.

  • Use of a Commitment Register to track anticipated cash outflows helps manage financial planning effectively.

Conclusion

  • The BHEL Purchase Policy-2013 endeavors to create a framework that supports the organization’s operational needs while fostering transparency, competitive pricing, and quality engagement with suppliers. By adhering to this structured approach, BHEL aims to enhance its procurement efficiency, ensuring successful project execution and customer satisfaction.