2d. HAL Purchase Manual Booklet - V2g PDF

Purchase Manual
(ISSUE 3 – 2013)
HINDUSTAN AERONAUTICS LIMITED

HAL PURCHASE MANUAL (Issue 3)
Foreword
I am pleased that our Company has brought out the revised Purchase Manual (Issue 3-2013)
and this will provide the essential information and serve as step-by-step guide for procurement
of goods and services. It has come at the right time as we brace ourselves to meet the
demands for improved transparency and standardization of financial information in all our
activities in general and procurement in particular.
Having an effective procurement system that offers a high level of transparency, accountability
and value for money is what the organizations strive for. By launching the improved Purchase
Manual, we have made an attempt to meet the needs of changing procurement scenario.
The manual lays down the frame work for purchase policy and procedures within HAL. The
users’ attention is specially drawn to the sections “Purchase without Tendering” and “Tender
Receipt, Opening and Evaluation” as they will find large-scale revision in the processes they
have been following till now.
The manual has new chapters on Procurement from Russian sources, eProcurement,
Grievance Redressal, Requirement of Professional Standard and Training and Interpretation
of Purchase Procedure.
We had to review our purchase policy norms keeping in line our ever growing business plans.
The earlier version has been modified and new processes/chapters are added and explained
taking into account technical complexity of procurement activities. The team identified to take
up this task has submitted its work in form of revised manual and I hope users, especially
those involved in the procurement process will find the manual as handy reference book. It
should help them in taking the right decision by following the due commercial procedures.
Dr. R.K. Tyagi
Page 1
Preface
The Purchase Manual, for guidance of and use by Purchase and allied Departments, was
issued in 1985. This Manual was revised and re issued in October 2007. A necessity has been
felt to update the Purchase Manual to incorporate Material Management Circulars issued
internally and Guidelines issued by various Govt. Agencies like CVC and MOD on Purchase
Procedures, including the experience gained during the period since the last revision to the
Purchase Manual.
In this Manual the Chapters on “Market Exploration and Source Selection”, “Purchase
Enquiry and Selection of Appropriate Purchase Mode”, “Purchase without Tendering” and
“Tender Receipt, Opening and Evaluation” have been revised. Further, “Sub-Contracting” has
been deleted from Purchase Manual in view of separate Manual for Sub-Contract Procedure.
However, provision of sub-contracting to OEM or Foreign vendors introduced in the Purchase
Manual. New Chapter on Procurement from Russian sources, e-Procurement, Grievance
Redressal, Requirement of Professional Standard and Training and Interpretation of Purchase
Procedure have been suitably incorporated.
This Manual brings out guidelines and broad frame work of Purchase Policy and procedures.
Procurement is a Complex process and it is unique for different categories of items. During
the procurement process certain unique situation may arise which has not been provided
or addressed in the Purchase Manual. Since all such situations cannot be foreseen and laid
down in the Purchase Procedure, Persons involved in the Procurement Process are expected
to take decisions exercising normal commercial prudence taking into consideration the
canons of Financial propriety and move forward.
The Purchasing Groups and Users of this manual are expected to ensure fair , transparent,
healthy competition and equitable treatment to all sources in the procurement process. They
shall also take timely actions for planning, issuing RFQs, Placement of Purchase Orders,
award of Contracts, administration and documentation of all Purchases / Contracts entered
into by them.
This Manual will aid those involved in the Procurement Process in making timely availability of
materials on one hand and ensuring the Commercial and Financial interest of the Company.
Bangalore
Date: 28th June, 2013 Director (Finance)
Page 3
Page 5
CONTENTS
CHAPTER
PAGE
NO./ TITLE
NO.
PARA NO.
INTRODUCTION 18
I PURCHASE OBJECTIVES, FUNCTIONS AND ORGANISATION 20
II CLASSIFICATION OF MATERIALS 23
2.2 Capital Equipments 23
2.3 Direct Project Material/Production Material 23
2.4 Overhead Material/Commercial Material 23
2.4.1 Stock Items 23
2.4.2 Non-Stock Items 23
2.4.3 Tools & Gauges 23
2.4.4 Maintenance Spares including Vehicle Spares 24
2.4.5 Civil Engineering Requirement 24
2.4.6 Welfare Items 24
2.4.7 Medicines & Hospital requirements 24
2.4.8 Miscellaneous 25
2.4.10 Services 25
2.4.11 Approval for MPRs / CPRs 26
Annex-01 Indenting Department/Functional Head Responsible for various procurement 152
activities
Annex-1A Procurement Guidelines for Type of Matl. to be procured (Capital eqpt) 160
Annex-1B Procurement Guidelines for Type of Matl. to be procured (Proj Matls) 161
Annex-1C Procurement Guidelines for Type of Matl. to be procured (Non-Proj) 162
Annex-1D Procurement for research, development & indigenization 163
Annex-1E Purchase Manual Reference 164
III MARKET EXPLORATION AND SOURCE SELECTION 27
3.4 Vendors Sourcing 27
3.5 Vendors Registration 29
3.6 Design Development 30
3.8 Approval 30
3.11 Removal of Firms Name from Approved List 31
3.12 Suspension 32
3.13 Banning of Business Dealings with Firm 33
3.14 Revocation of Orders for Banning / Suspension of a firm 34
3.15 Communication to Firms regarding removal from registration/ Suspension/ 35
Banning
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3.16 Review of Suspension / Banning Order 35

3.17 Maintenance of up to date list of Firms issued with suspension/banning 35
3.18 Definitions 35
Annex-02 Data base Structure for Vendor Directory File 165
Annex-02A Material Group Code 166
Annex-02B Country and Currency Codes 167
Annex-03 Format for inclusion of the source of supply in vendor Directory 173
Annex-03A Format of vendor directory 174
Annex-03B Approved Vendor Directory 175
Annex-04 Application for Registration as approved supplier (Indian Suppliers) 176
Annex-04A Application for Registration as approved supplier (Indian Suppliers-Drugs / Non- 181
Drugs Medical Equipments)
Annex-04B Check list for filling up the Vendor Registration Form (checklist for Indian Vendors) 187
Annex-04C Vendor Registration 188
Annex-05 Application for Registration as approved supplier (Foreign Suppliers - 190
Manufacturers)
Annex-06 Application for Registration as approved supplier (Foreign Suppliers – Stockist 191
and Distributors)
Annex-06A Checklist for Foreign Vendor/Stockist/Distributors 193
IV ASSESSMENT AND AUTHORISATION OF REQUIREMENTS FOR PURCHASE 36
AND SCRUTINY
4.1 Purchase Request 36
4.2 Estimates 36
4.3 Purchase Committee (PC) / Material Provisioning Committee (MPC) 37
4.4 Registration of Purchase Request 37
4.5 Scrutiny of Purchase Request 37
4.6 Provisioning for Repair and Overhaul of Aircraft / Engine Components and Test 38
Equipments
Annex-07 Format for Material Purchase Request 194
Annex-07A Format for Service Purchase Request 196
Annex-08 Format for Capital Purchase Request 197
Annex-09 Format for Urgent Purchase Request 200
Annex-10 Format for Petty Purchase Request 201
V PURCHASE ENQUIRY AND SELECTION OF APPROPRIATE PURCHASE 39
MODE
5.2 Purchase Enquiry 39
5.2(I) Specification 39
5.2.(II)(b) Indent Delivery Date 40
5.2.1 Source Selection 42
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5.2.4 Mode of Dispatch of Enquiry 42

5.2.7 Two Bid System 42
5.3 (I) Earnest Money Deposit 43
5.3.2 Return of EMD 45
5.3.(II) Security Deposit 46
5.3 (III) Performance Bank Guarantee 46
5.4 Mode of Tendering 47
5.4.1 Open Tendering 47
5.4.7 Web Tender 48
5.5 Pre-qualification of Bidders 48
5.6 Limited Tender 48
5.7 Proprietary Tender 48
5.8 Licensor/License Agreements 49
5.9 Single Tender 49
5.9.4 Single Tender (Nomination Basis) 50
5.10 Spot Tendering 51
5.10.5 Procurement on Selection Basis 51
5.11 Procurement from Customer Nominated Source 52
5.12 Two Stage Tendering 52
5.13 Procurement by Sample Selection 53
5.14 Procurement from OEM / Distributors / Stockist 53
5.17 Procurement for Production hold up items / Customers AOG requirements 54
Annex-11 Conditions of Tender (Indigenous Procurement) 202
Annex-11A Conditions of Tender (Indigenous Rate Contract) 210
Annex-12 Conditions of Tender (Foreign Procurement) 212
Annex-13 Format for High Sea Sales Agreement 223
Annex-13A Terms and conditions of Contract (Canteen & Groceries) 225
Annex-14 Format for Proprietary Certificate 228
Annex-28 Discounted cash flow method 293
VI PURCHASE WITHOUT TENDERING 55
6.1 DGS&D Rate Contract 55
6.2 Purchase of Standard Specification Items (Non Capital) of Common use 55
6.4 HAL Rate Contract 55
6.5 HAL License Agreement 56
6.6 Repeat Order 56
6.7 Imprest Purchase System 56
6.8 Petty Purchase 57
6.9 Order on Ancillaries 57
Page 9
Annex-15 Format of Draft Agreement for Rate Contract 229

Annex-16 Format for Imprest Purchase 235
VII TENDERING RECEIPT, OPENING AND EVALUATION 58
7.2 Tender Box 58
7.2.3 Receipt of Tender through FAX/E-mail 58
7.3 Opening of Tender 58
7.4 Tender Opening Register 60
7.5 Unsolicited Tender 60
7.6 Late Tender 60
7.7 Postponement of Due date 60
7.8 Authority for Tender Opening 61
7.9 Tender Evaluation 61
7.9.3 Technical Evaluation (Single Bid) 61
7.9.4 Technical Evaluation Committee (Two Bid System) 61
7.9.9 Commercial Evaluation 62
7.10 Tender Evaluation of Capital Equipment 64
7.11 Tender Evaluation for Selection of Systems for Aircraft/Helicopter/Accessories 65
7.12 Comparative Price Statement 66
7.13 Correspondence with vendors 66
7.14 Acceptance of Tenders 66
7.14.5 Quantity Distributions 67
7.14.7 Minimum Order Quantity 67
7.15 Validity Extension 68
7.16 Price Preference – Public Sector Undertaking, Ancillaries, Small Scale Industries 68
and Indigenous Manufacturers
7.17 Negotiations 68
7.18 Re-tendering 69
7.19 Time frame for processing 70
Annex-17 MSME Govt. Policy 236
Annex-18 Time Frame for Procurement 239
VIII PURCHASE PROPOSAL, ORDER AND ORDER AMENDMENTS 71
8.1 Purchase Approval 71
8.2 Purchase Order 72
8.3 Delegation of Power 72
8.4 Purchase Order Data base 72
8.6 Purchase Order Acknowledgement 73
8.7 Purchase Order Amendment 73
8.8 Purchase Order Terms & Conditions 73
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8.8.3 Advance Payment 74

8.8.4 Risk Purchase 75
8.8.5 Arbitration Clause 75
8.8.6 Security Deposit and Performance Guarantee 75
8.8.7 Agents / Agency Commission 76
8.8.8 Liquidated Damages 76
8.8.9 Price Escalation Clause 77
8.8.10 Integrity Pact 77
8.8.11 Immunity to Govt. of India 79
8.9 Purchase Order Returns 79
Annex-19 Project Material Purchase Proposal Format 240
Annex-20 Non Project Material Purchase Proposal Format 243
Annex-21 Capital Item Purchase Proposal Format 246
Annex-21A Format for Technical Evaluation Statement & Recommendation 249
Annex-21B Format for Comparative Statement of Prices 250
Annex-21C Format for Commercial Evaluation Statement 251
Annex-21D Format for Price Justification 252
Annex-21E Format for Agenda for Negotiation 253
Annex-21F Format for PNC Recommendation 254
Annex-21G Information Checklist for Purchase Proposals (Capital Items) 255
Annex-21H Information Checklist for Purchase Proposals (Projects / Non-Project Items) 258
Annex-22 Format for Brief summary of proposal for Procurement Sub-Committee/ Board of 261
Directors
Annex-22A Chronology of Progression of Purchase Proposal 262
Annex-23A General Terms and Conditions of Contract 263
Annex-23B Format of Bank Guarantee for Advance Payment 270
Annex-23C Format of Bank Guarantee for Security Deposit 272
Annex-23D Format of Performance Bank Guarantee 274
Annex-23E Format of Bank Guarantee towards Earnest Money 276
Annex-24 Format for Integrity Pact 277
Annex-25 Format for Purchase Order Returns 282
IX SUB-CONTRACTING 80
X IMPORT PURCHASE 81
10 Custom Duties and System of Classification of Goods 81
10.9 Clearance of Import Cargo and Demurrage charges 82
10.13 Customs Duty – Imports 83
10.21 Customs Duty – Exports 85
10.22 Excise Duty 86
Page 11
10.23 Custom Duty Exemption Certificate 86

10.24 Withhold Tax 86
XI PURCHASE PROGRESSION 87
XII VENDOR EVALUATION 91
XIII BUDGETING 93
XIV LEGAL ASPECTS OF PURCHASING 95
XV ETHICS OF PURCHASING 100
XVI GRIEVANCE REDRESSAL 101
XVII REQUIREMENT OF PROFESSIONAL STANDARDS & TRAINING 102
XVIII INTERPRETATION OF PURCHASE PROCEDURES 103
XIX GLOSSARY OF PURCHASE TERMS 104
XX INCOTERMS 124
XXI CVC GUIDELINES 130
XXII e—PROCUREMENT 131
XXIII PROCUREMENT FROM RUSSIAN SOURCES 145
Annex-26 Format for Purchase Progression 283
Annex-27 List of CVC Circulars 284
Annex-28 Discounted cash flow method 293
Annex-29 Letter of Intent Format 294
Annex-A Format of Workflow / Hierachy (e-procurement) 295
Page 12
REFERENCE
REFERENCE DESCRIPTION PAGE
1 LIST OF RECORDS/DOCUMENTS TO BE RETAINED AND THE PERIOD OF 297
THEIR RETENTION
2 RETURN OF EARNEST MONEY DEPOSIT (EMD) RECEIVED AGAINST 299
OPEN TENDER
WEBSITE HOSTING-LEVERAGES OF TECHNOLOGY
3 SUMMARY OF ENQUIRIES RELEASED DURING A MONTH 300
(RS. 10 LAKHS AND ABOVE)
3A SUMMARY OF PURCHASE ORDERS RELEASED DURING A MONTH 301
3B SUMMARY OF PAYMENTS MADE DURING A MONTH - AGAINST 302
PURCHASE ORDERS
4 SAMPLE TEMPLATES(PRICE BID FORMAT) 303
5 MATERIAL MANAGEMENT CIRCULARS/ GUIDELINES 306
6 REFERENCE WEB SITES FOR CUSTOM NOTIFICATIONS, EXCHANGE 308
RATES, LABOUR AND MATERIAL INDICES ETC
7 LIST OF ITEMS RESERVED FOR PURCHASE FROM SMALL SCALE 309
INDUSTRIAL UNITS INCLUDING HANDICRAFT SECTOR
8 ARBITRATION 321
Page 13
ANNEXURES
Annx Description Page
01 Indenting dept/functional head responsible for various procurement activities. 152
02 Suggested structure for vendor directory file 165
02A Material group codes 166
02B Country & currency codes 167
03 Suggestion for inclusion of a source of supply in vendors directory 173
03A Format for vendor directory 174
03B Approved vendor directory 175
04 Application for registration as approved supplier (Indian suppliers) 176
04A Application for registration as approved supplier (Indian suppliers) 181
(drugs/non-drugs/medical equipment)
04B Check list for filling up the vendor registration form (Indian vendors) 187
04C Suggested format of vendor registration letter 188
05 Application for registration as approved supplier 190
(Foreign suppliers - manufacturer)
(Foreign suppliers stockist/distributor)
06A Check list for foreign vendor/stockist/distributors 193
07 Format for Material Purchase Request 194
07A Format for Service Purchase Request 196
08 Capital Purchase Request 199
09 Urgent Purchase Request 200
10 Petty Purchase Request 201
11 Conditions of Tender (indigenous) 202
11A Rate contract - Conditions of Tender 210
12 Conditions of Tender (Foreign) 212
13 High sea sale agreement format 223
13A Terms and conditions of contract (canteen & groceries) 225
14 Proprietary certificate 228
15 Rate contract - Draft agreement 229
16 Receiving-cum-discrepancy report (imprest purchases) 235
17 Ministry of micro, small and medium enterprises (MSME) policy 236
18 Time frame for procurement 239
19 Project materials, purchase proposal format 240
20 Non-project materials, purchase proposal format 243
21 Capital items purchase proposal format 246
21A Format for technical evaluation statement & recommendation 249
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21B Format for comparative statement of prices 250

21C Format for commercial evaluation statement 251
21D Price justification 252
21E Agenda for negotiations 253
21F Format for PNC recommendation 254
21G Information check list for purchase proposals (capital items) 255
21H Information check list for purchase proposals (project/non-project) 258
22 Format for brief summary of proposal for approval by PSC/Board 261
22A Chronology of progression of purchase proposal 262
23A General terms & conditions of contract 263
23B Format of bank guarantee for advance payment 270
23C Format of bank guarantee for security deposit 272
23D Format of performance bank guarantee 274
23E Format of bank guarantee towards earnest money 276
24 Integrity Pact format 277
25 Format for purchase order returns 282
26 Format for purchase progression 283
27 List of CVC circulars 284
28 Discounted cash flow method 293
29 Letter of Intent (LoI) Format 294
A Format of Workflow / Hierarchy (e-procurement) 295
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Corrections/amendments included
SL. No. Title Para / Annexure
1 Services 2.4.10.c (new clause)
2 Vendor Registration 3.5.1
3 Purchase Enquiry 5.2.11
4 Earnest Money 5.3.1.d.v
5 Return of EMD 5.3.2
6 Open Tendering 5.4.1
7 Limited Tender 5.6.4 (new clause)
8 Spot Tendering 5.10.3
9 Procurement from Customer Nominated Source 5.11.h (new clause)
10 Telephonic Enquiry 5.19 (new clause)
11 Opening of Tenders 7.3.6
12 Unsolicited Tender 7.5
13 Commercial evaluation 7.9.9.iii
14 Comparative price statement 7.12
15 Negotiations 7.17.4
16 Re-Tendering 7.18.2
17 Draft Purchase Order 8.2.e
18 Agent / Agency commission 8.8.7
19 Agent / Agency commission 8.8.7.2
20 Integrity Pact 8.8.10 (h) - (new clause)
21 Custom duties and system of classification of Goods 10.2 (being statutory in nature)
22 Rights of appeal CESTAT 10.10 (being statutory in nature)
23 Custom duties - imports 10.13.1.b.ii & iii (being statutory in nature)
10.15 [existing 10.15 on surcharge
has been deleted as the same is not
applicable (being statutory in nature)
24 Countervailing duty (CVD) of customs
and 10.16 (additional duty of customs)
is re-numbered as 10.15 and titled
“Countervailing duty (CVD) of customs”]
10.16.1, newly added (being statutory in
nature)
10.16.2, newly added (being statutory in
nature)
27 Exemptions 10.19.2 (being statutory in nature)
28 Purchase order progression register / database 11.4.2
29 Legal aspect of purchasing 14.1.1
30 Grievance Redressal Committee 16.7.1
31 Bill of entry Chapter XIX, Sl. No. 22.A
Chapter XIX, Sl. No. 22.B (new “title”
32 Bill of Lading
introduced)
33 Receiving report Chapter XIX, Sl. No. 153
Small scale industrial undertaking
Chapter XIX, Sl. No. 168
(Public Procurement Policy for MSEs and MSME
34 (No amendment incorporated, as this
development act 2006 may be referred, policy
class considered as invalid)
placed at Annexure-17)
Small scale service & business (industry related) en-
terprises Chapter XIX, Sl. No. 169
35 (Public Procurement Policy for MSEs and MSME (No amendment incorporated, as this
development act 2006 may be referred, policy class considered as invalid)
placed at Annexure-17)
Page 16
36 Off-line EMD payment 22.6.4.g

37 Planning of Indents 23.2.4
Sl. No. has been corrected from 23.4
38 Procurement from Russian Sources
onwards in chapter XXIII
39 Receipt of Offers/ Tender Opening 23.8.4
Indenting Dept / Functional Head responsible for vari- Annexure-1 :
40
ous procurement activities as given below Under Column 2 against Project Material
Role of indenting / Purchase / Finance Dept. in Pro- Annexure-1 : B
41
curement activity (MPR-Finance) Under MPR against Finance role, Sl. No.i
42 Applicant profile Annexure-4, Sl. No. 2.2.a
43 Applicant profile Annexure-4 A, Sl. No. 2.2.a
Application for Registration as Approved Supplier Sl. No. has been corrected from 4 on-
44
(Indian Supplier) Drugs/Non-Drugs/Medical Equipment wards in Annexure-4 A
45 Service Purchase Request (SPR) Annexure-7A
Para 15 (e), Annexure-11, Part-II
46 Earnest Money Deposit (If applicable)
(Conditions of Tender (Indigenous))
Para 15 (e), Annexure-12, Part-II
47 Earnest Money Deposit (If applicable)
(Conditions of Tender (Foreign))
Sl. No. 28 Para 1, Annexure-12, Part-II
48 Agent / Agency commission
(Condition of Tender (Foreign))
Receiving cum discrepancy report
49 Annexure – 16
(Imprest purchases)
Annexure-20, Sl.No. 4 (Tendering, 3rd
50 Non-project material, purchase proposal format.
column, 2nd bullet)
Annexure-21, Sl.No. 4 (Tendering, 3rd
51 Capital item, purchase proposal format.
column, 1st bullet)
Sl. No. 30 Para 1, Annexure-23(a)
52 Agent / Agency commission
(General terms & conditions of contract)
53 Integrity Pact (Revised format) Annexure-24
54 Letter of intent (LoI) Annexure-29
Summary of Enquiries released during a month (Rs.10 Reference-3 (Format-1(A))
55
lakhs and above)
General correction
i. Chairman / CH has been replaced with CMD
ii. Managing Director / MD has been replaced with CEO
iii. D(CP&M) has been replaced with D(OPS)
iv. GM / ED has been replaced with Head of the Division
v. GM(Finance) has been replaced with Head of Finance
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INTRODUCTION
Duties and Responsibilities of Materials Management
Material Planning & Control
a) Timely provisioning of materials and raise demands in appropriate proforma (MPR/PRs)

considering production programme, Bill of Materials, available stock, dues in, production
allowances, contingency, shelf life, procurement lead time based on stage of build/ structural
breakdown and other factors like indigenisation plan etc.
b) Follow up for progression of MPRs.
c) Liaise with related departments like design, methods for updated documents.
d) Authorise issue of materials
e) Liaise with shop engineering for day-to-day production problems relating to materials.
f) Inventory Control and analysis
g) Review of slow moving / non-moving stocks and take corrective action including disposal.
Purchase
a) Preparation of RFQ and tendering
b) Receiving quotations/Tender opening, commercial, vetting, evaluation of quotes and compilation

of comparative statement.
c) Convening and coordinating PC/MPC meetings.
d) Arrange for negotiations if any,
e) Arrange for Long Term Business Agreement/Rate Contract if any.
f) Issuance of Purchase order after coordination with Finance and approval of proposal at Division/
Complex/ Corporate Office level as the case may be.
g) Purchase order progression for ensuring availability of material in time.
h) Ensure prompt payment to supplier after receipt of material.
i) Follow up of replacement /rectification against any rejections and warranty claims.
j) Vendor evaluations and directory.
k) Coordinate with regards to contract management, licence agreement, co-production agreement

etc.
l) Resolve commercial dispute / arbitration.
m) Preparation of Purchase Budget
n) Tendering, evaluation and finalization of the Service Contract for Services as defined in DoP.
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Stores
Stock Control
a) Identification of Stock items
b) Raising of indents in appropriate forms (MPRs) based on fixing of stock levels/re-order levels,
consumption data, supply lead time etc.
c) Rationalization and variety reduction
Receiving
d) Arrange for custom clearance and collection of goods.
e) Prefer claim on vendor/Insurance as the case may be in case of rejection/damage.
f) Preparation of receiving report and arrange for clearance of goods from inspection.
g) Arrange for storing of rejected material in a separate quarantine stores, advise purchase to take
up with the supplier, organize periodical discrepancy. Review committee meeting for disposal of
rejected items.
Dispatch
h) Arrange for all dispatch documents, packing of goods after inspection, custom clearance and
handing over the consignment to carrier/consolidating agency. Inform vendor/customer of
dispatch details.
i) Coordinate with Finance, to finalize insurance policies and ensure continuity of coverage by
prompt payment of premium.
Holding Stores
j) Proper storage / preservation of materials, issue against authorized material requisitions.
k) Carry out perpetual stock/physical verifications.
l) Review of slow-moving / non-moving lists and take appropriate disposal action.
m) Ensure FIFO for lifed items and arrange for disposal of life expired items.
Tool Cribs
n) Proper storage / preservation of tools, issue against token.
o) Keep up to date record of calibration status and arrange for periodical calibration/reconditioning
of tools.
General
a) M.I.S. to various agencies

b) Compilation of procurement / commercial data bank
c) Commercial policies / policy matters
d) Training & Development
e) Computerization/E-Commerce.
Page 19
CHAPTER - I
PURCHASE OBJECTIVES, FUNCTIONS AND ORGANISATION
1. Objectives
1.1 The fundamental principle of procurement function is to ensure
a) Efficiency, economy and transparency
b) Competition wherever it is non-proprietary, non-licensor procurement and non-customer

nominated source.
1.2 The purchase procedure outlined in this manual aims to fulfill the following objectives:
a) To ensure uninterrupted/ timely flow of materials, equipment & services of goods of required
quality to meet and support production plans and other requirements of internal and external
customers.
b) To buy competitively and wisely authorize supplies to desired specifications from approved /
reliable sources at the available reasonable prices within the time schedule to support production
plans and other requirements.
c) To ensure that fair open and uniform purchase practices are followed to develop healthy and long
term relationship with suppliers and to foster the commercial and technological interest of HAL in
the local, national and international market.
d) To ensure timely formulation and commitment of purchase budget, including foreign exchange
requirements.
e) To serve as information center on materials knowledge prices, sources of supply, specifications

etc. to all other departments.
f) To ensure that investment made on inventory is at an optimum level and continuously strive for
reduction in material costs, Capital costs and Overhead expenses. Develop sources of supply to
maintain competition and sustained supplies.
g) Training of purchase personnel in the latest techniques of Materials Management.
h) To keep management appraised of the likely shortfalls in purchase performance by introducing

appropriate reporting systems with a view to seek management’s intervention in time.
i) To adhere to commercial procedures & maintain cannons of financial propriety to safeguard

economic, legal and other interests of HAL. Commercial procedures cover the Purchase Manual
as well as guidelines issued by way of Materials Management Circulars/ CVC guidelines/ MoD
instructions etc. from time to time
j) Maintain and improve the quality of materials procured. Lay emphasis on Quality Management.
1.3 Purchase Functions : Purchase Department is responsible for the following functions:
a) Creation of a comprehensive and regularly updated directory of selected reliable vendors and
exchange the same with other Divisions to expand sources of supply.
b) Maintenance of vendor evaluation and rating records.
Page 20
c) Carry out Market surveys with a view to establishing / developing new reliable and better sources
of supply and keep updated with information on latest products / developments.
d) Analysing bids / offers for decision-making by the Competent Authority.
e) Arranging negotiations with Vendors, when necessary.
f) Issue of Purchase Orders in time.
g) Follow-up of Purchase Orders till the arrival of materials and acceptance at destination and to
ensure after sales service during warranty and post-warranty periods.
h) To finalize the required rate contracts/ Long Term Agreements for regular stock items.
i) To work out periodically procurement lead time for various categories of items from international
and local markets and advise the same to user departments so, that they take timely action
in initiating purchase requests. Maintaining a library of product catalogues and manufacturers/
distributor’s price lists etc.
j) Maintaining a library of product catalogues and manufacturers/Distributor’s price lists etc.
k) Maintaining up to date information regarding sales tax, excise and custom duty-rates etc.
l) Submit MIS reports and other periodic returns.
m) Entering into service contracts in line with the DoP.
n) Entering into Transit Insurance agreements for goods in transit.
o) Finalisation of Commercial Terms & Condition and operation of licence agreements in coordination
with project/production engineering.
p) To ensure that objectives of purchase are realized.
q) To be alert about and responsive to the changes in production programme and change in
requirements of material.
r) Ensure timely payments to suppliers.
1.4 PURCHASE ORGANISATION
1.4.1 The Purchase Department shall be organised, depending on the work load at the Division in such a
manner as to efficiently discharge the functions set out at para above.
Purchase Section
Project Materials - Non- Project Allied Services Contracts relating to

Raw Materials Materials. Custom Clearance Service Contracts &
Bought Out Parts M/c Spares Purchase Budgets ToT/License
Consumables Tooling MIS reports agreements
Standard Parts Capital Items etc Information Bank
GSE/GHE & Eqpt.
Page 21
1.4.2 Integration of the purchase function with other functions of materials management like planning,
stores, transit etc at an appropriate level shall be based upon needs of the Division. An optimum
balance between having as much centralization as possible and as much de-centralization as
necessary will be implemented.
1.4.3 DoP defines the categories of procurements as “Goods”, “Works” and “Services”. The Purchase
Procedure is applicable for procurement of “Goods” and “Services”.
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CHAPTER - II
CLASSIFICATION OF MATERIALS
2.1 For efficient purchasing, it is necessary that the relevant classifications of materials are properly
understood, so that suitable purchasing methods may be adopted for the purchases in question.
Broadly, the following classifications are pertinent to HAL purchases:
2.2 Capital Equipment

2.2.1 Capital equipment consists of machine tools, plant, office equipment, workshop / office furniture,
vehicles etc. The requirements of capital items for the Divisions are sanctioned by the Board in
the annual purchase budget. The Planning/Facility Department, in consultation with the Purchase
Department, should draw up a detailed plan to meet the commitments.
2.2.2 Capital purchase requests are to be raised by the Head of Planning / Head of Facility Planning /
authorised officer and on approval same to be provided to IMM.
2.2.3 A detailed procedure for Capital Procurement is given in Chapter VII.
2.3 Direct Project Material/ Production Material

Direct Project Materials or Production Materials are those which form part of the end product and
are either directly consumed in production/ Overhaul or are required for supply against indents/
RMS order/ Customers’ orders. These are raw materials, consumables, components, spares and
accessories, castings and forgings etc., which go into the manufacture / repair / overhaul of Aircraft /
Engine and other Systems/ end products. The bulk of the production materials in the aircraft industry
falls in the category of bonded / aero materials and is required to be purchased only from approved
sources. (Refer Chapter III). Such stores are required to be covered by Release Note / Airworthiness
certificate or any other document as prescribed by Quality, bearing the signature of an approved
inspection authority. The requirement of production material is linked with production programme
of the Company and Material Purchase Requests are to be raised by Material Planning/ Control
Department.
2.4 Overhead Materials/ Commercial Materials

All other types of materials which are not directly used in production but are required for the production
process/ or functioning of the organisation are classified as overhead materials/ commercial materials.
Such materials fall under two main categories:
2.4.1 Stock Items: These are regular consumption items where stock levels are maintained and
procurement initiated based on re-order levels. Such items are required to be stocked for issue as
and when required.
2.4.2 Non-stock Items: Demand for such items arise based on specific requirements of user departments as
per Material Purchase Requisition (MPR) / First Time Requirements (FTR) raised by user departments
and the same shall be got approved by Functional/Sectional/Divisional Head as per DoP (Level I, II &
III). In such cases approved MPR to be provided by Indenting Department to Purchase Department
for procurement. Such materials will generally be issued to respective users immediately upon receipt
against MR as given / generated from ERP.
2.4.3 Tool and Gauges : The material purchase request for these items shall originate from Tool Planning
Department. This category of items includes hand tools, standard / special cutting tools, measuring
gauges, jigs, fixtures, grinding wheels and honing stones. Quality and volume of production
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largely depends on timely supply of accurate tools and precision gauges. It is, therefore necessary
that dealings are restricted to only reliable sources which should be approved after visiting the
manufacturers, facilities and surveying their processes and quality assurance methods, financial
soundness and commercial standing. MPRs for non-standard tools shall be approved by concerned
Production Engineering / Project Heads under Level I, II, III in DoP.
2.4.4 Maintenance Spares Including Vehicle Spares: The supply of Maintenance spares is vital to keep
the factory’s capital equipment / machine tools / plant in serviceable condition. At the time of selecting
plant and equipment, special care shall be taken to study in detail the after - sales services offered
by the Supplier and Plant Maintenance Department shall undertake VED analysis in order to restrict
purchases only to inescapable insurance items. Commonly available spares of general nature, like
belts, bearings, lamp filaments etc. shall not be purchased in bulk and attempts shall be made to
establish local reliable sources and where possible rate contracts shall also be finalised so that plant
maintenance can avail of these facilities directly avoiding delay. Material purchase Requests for these
items shall be raised by Plant Maintenance Department. Head of Maintenance or his authorised
representative to give approved MPRs to IMM. The list shall be reviewed by Maintenance at least
once in a year.
2.4.5 Civil Engineering Requirements
a. Material Purchase Requests for items of Civil Works like steel, Cement, Pipes, Sand, Bricks,
Sanitary items etc. will be raised by Civil maintenance and approved by competent authority for
provisioning as per DOP.
b. Civil items of emergent nature may be purchased by Civil department directly through Imprest
purchase, as given under heading “Imprest Purchases” in Chapter VI.
c. Other Civil items of emergent nature/ small quantity/ occasional requirement may be purchased
by forming Local purchase committee through Spot tendering. Local purchase committee will
have representatives of Civil, IMM and Finance.
2.4.6 Welfare Items
a. HR Department shall raise Material Purchase Requests and approved as per competent authority
for provisioning as per DoP for welfare items such as uniforms, personal utility items and
requirement for running the canteen services etc.
b. Generally non – provisioning / non - receipt of welfare items in time can create industrial unrest.
Therefore, their timely availability even on short notice needs to be ensured. Welfare items of
emergent nature may be purchased by HR department directly through Imprest purchase, as
given under heading “Imprest Purchases” in Chapter VI.
c. Other Welfare items of emergent nature/ small quantity/ occasional requirement may be purchased
by forming Local purchase committee through Spot tendering. Local Purchase committee will
have representatives of HR, IMM and Finance.
2.4.7 Medicines and Hospital Requirements
a) The Chief of Medical Services or an officer / Committee authorized by him shall assess the
requirements of Hospital related items including medicines and other pharmaceutical items, based
on projected consumption, stocks available and shelf life. The sources and mode of procurement
(including proprietary) shall be indicated by the authorized officer/committee. Officer nominated
by Chief of Medical Services shall raise MPRs for the requirements so assessed and approved
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by competent authority for provisioning as per DoP. Source recommended by the committee
and incorporated in MPR is final. Committee to maintain a directory of approved suppliers and
periodically reviews and update. In order to control inventory and to ensure prompt supply of
correct medicine, the ordering and receipt shall be handled in close association with the Chief of
Medical Services who will nominate a Medical Officer for the same.
b) The requirements of first aid centre located at various divisions to be procured by purchase
department under Chief of Medical Services and supplied to respective first aid centers.
c) Purchase Department, in co-ordination with the Chief of Medical Services, shall carry out market
survey and enter into rate contracts with manufacturers / accredited dealers for supply of
medicines at the Hospital / Government controlled bulk rates. For emergent requirements and for
medicines needed infrequently or in small quantities, local reliable dealers shall be appointed.
d) In order to meet the day to day requirement of M&H unit / Hospital including the requirement of
inpatient, if considered appropriate, rate contract(s) may be explored as an option with sources
that are in the local vicinity offering the best discount from MRP at the same time ensuring the
maximum available shelf life.
e) Emergency purchase of medicines shall be regulated as per Delegation of Power for M&H units/
Hospital.
2.4.8 Miscellaneous: In respect of items which are not covered in the above Material Purchase Requests
shall be raised by the head of the user department as per the delegation of powers.
2.4.9 All Non Project stock items’ MPRs will be raised by Store dept. and certified by user dept for qty and
specification & any specific sources and approved by competent authority for provisioning as per
DoP. Wherever more than one user department is involved, consolidated requirement to be certified
by Stores Department.
2.4.10 Services
a) “Services” will mean any subject matter of procurement other the “Goods” or “Works” and includes
all Outsourced services such as Hiring & Maintenance of Transport, Canteen, Repair/AMC/
Calibration of Machinery /Equipment/GSE/GHE/Computer including Medical & Office equipment,
Repair of furniture, Operation & Maintenance Contracts, Performance Base Maintenance,
Repair/Overhaul of Aircraft/Engines LRUs / Rotables outside HAL, engagement of agency for
recruitment of personnel, Freight Forwarder, IT implementation/support, Printing, Publication,
Laundry, Binder or any other activities not covered under the “Works” as per Works Manual and
the definition of “Works” as given in the DoP. For “Services” purchase procedure will apply. The
guiding principle will be for Maintenance of Assets, the procedure i.e., Purchase or works, which
is applicable for acquiring the subject assets will also be applicable for maintenance of such
assets. After award of the contract by the Purchase Department, the monitoring of the execution
/ completion of the contract along with required certification and other technical and statutory
compliance shall be the responsibility of the Indenting / User Department. Services involving
deployment of Man power for full time will not be covered under Purchase Procedure. This will
have to be covered under the category of Works Procedures e.g. AMC for machine maintenance,
IT hardware maintenance, work packages involving full time deployment of manpower within the
factory / office premises.
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b) User / Indenting Dept. responsible for various procurements are as indicated in Annexure-01.
c) For Repair/Overhaul of Aircraft, Engines , LRUs , Rotables, Calibration of GHE, GSE Test
equipment i.e., all project items, MPR format (Annexure-7) may be followed in place of SPR
format (Annexure-7a) with due accountability in ERP system.
2.4.11 Approval for MPRs / CPRs: MPRs / CPRs raised by various groups as identified above has to be
coordinated by Finance and approved by CFA for provisioning as specified in DoP.
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CHAPTER - III
MARKET EXPLORATION AND SOURCE SELECTION
3.1 The main objective of the Purchase Department is timely procurement and supply of material to
the indenting departments. Non-receipt of materials ahead of time would be a burden on the cash
flow of the Company and add to inventory carrying costs. It is therefore important that right source
is contacted. To achieve this aim each Division shall carry out intensive market survey and prepare
a register/ Database of Approved Suppliers. The following procedure shall be followed in respect of
market survey, source selection and registration of suppliers in each Division.
3.2 Market exploration, Vendor sourcing and registration of approved suppliers shall be the responsibility
of the Head of the IMM Department in each Division. For regular reference the Division shall maintain
the list of approved suppliers in the format as prescribed by ERP system (Annexure-02), in database
format. Such database will be readily reproducible or printable as follows:
The vendor directory is required to be maintained with category and sub-categories of goods /
services for which the vendor has been registered. This would help in selecting the correct supplier
for sending enquiry for different categories of goods / services.
(a) Product wise suppliers with category/sub-category (b) Alphabetically listed suppliers
3.3 The Divisions shall utilize the database of other Divisions for widening their source of supplies.
a) The databases shall be regularly updated, once in two years. It is recommended to have Press
Advertisement once in every two years for Non-Project materials. Whenever a new vendor is
approved, the details to be hosted in HAL website on monthly basis.
b) A separate list of items proprietary in nature with details of vendor to be maintained by the
division and to be updated.
c) It is suggested to have a separate cell under IMM for the above.
3.4 Vendor Sourcing
3.4.1 Potential Vendors will be identified from one or more of the following sources:
a) Design Documents:
a. Proprietary sources as specified in the aeronautical products design documents.
b. Sources identified in TOT agreements.
b) Published Sources:
A number of sources may be identified from published sources. The following is a representative
list and not limited to-
i) Vendor Directories
a. Kompass
b. ABC Inventory
c. Jane’s Directory
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d. SBAC
e. Gifas
f. World Aviation Directory
g. Internet and On-line Directories like ILS (Inventory Locator Service) etc.
h. Thomas’s Register
i. Directory of Indian Industries
ii) Industry Sources
a. Industry associations
b. Trade associations
c. Trade papers, Journals and Purchase Magazines
d. Professional Associations
e. Industry Buyer’s Guides
f. Various Aeronautical Magazines
g. Sources from various embassies of foreign countries/ Indian Embassies in foreign

Countries and Trade Consulates.
h. Classified telephone directories
i. Manufacturers’ catalogs, sales literature and self-introductory letters.
iii) Random Sources
a. Trade and Product Shows
b. Sources suggested by known, qualified agencies
c. Customer nominated sources/Customer web portal of approved vendor.
d. Responses received against regular open tenders.
e. Through pre-qualification advertisements issued by the Division.
iv) Others:
a. Sources identified and approved by other Divisions.
b. Indigenisation Compendiums prepared by various Divisions of HAL.
c. Compendium of Registered Firms for Aeronautical Stores approved by DGAQA, DTD&P (Air),
Ministry of Defence, and firms approved by DGCA.
d. OEM Sources identified from the information/ labels/ part numbering on products supplied
by non-OEMs.
e. Converting OEM’s part numbers to MIL standard or other aviation standards part numbers
and identifying sources of supply.
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f. OEM authorized distributors / stockist
g. Mill approved stockist
h. OEM registered with Federal Service for Military – Technical Co-Operation (FSMTC, Russia) /
Ex-CIS Government.
c) While vendor directory is required to be hosted on HAL website, the Indigenisation Compendiums
prepared by various Divisions shall also be hosted on HAL website.
3.4.2 Format as per ERP (Annexure–03) shall be used for suggestions to include a Vendor in the Directory.
This form may be filled up by anyone in the concerned departments including IMM.
3.5 Vendor Registration
3.5.1 Each Division may issue an advertisement for registration of suppliers in
English language in one (1) English Newspaper having wide circulation

and
Hindi language in one (1) Hindi Newspaper having wide circulation
and
Local (regional) language in one (1) local newspaper, if required.
Wherever, advertisement is released in English Newspaper, it should be mentioned in the end in Hindi
that Hindi translation of the advertisement is available at HAL website hal-india.com.
3.5.2 Firms who seek registration on their own may also be considered for registration. A party who has
been registered as a Supplier / in any of the Divisions of HAL shall be considered for registration as
approved supplier by other Divisions for similar items of the same class / nature without resorting to
the formality of application and scrutiny. Necessary records may be called for from the Divisions who
have registered them. At any point of time during the validity of vendor registration if it has come to
the knowledge of the division, any change in the information with reference to the details provided at
the time of registration, the same needs to be updated and/or independent verification by the Division
may be carried out if considered necessary.
3.5.3 Firms seeking registration will be responsible for disclosing complete and correct information. Once
registered, they will also be responsible for sending information updates on their own, within one
month of any changes.
3.5.4 Firms desirous of registration shall be issued with Form at Annexure-04 (in case of indigenous
suppliers) or Form at Annexure-05 in case of Foreign OEMs or form at Annexure-06 for stockist/
distributors. The forms shall be issued free of cost. Though, as per the registration form, details of
three years are being sought, the same should not be considered as eligibility criteria for registration as
an approved vendor. In case vendors who are new or furnishing data for one to two years, depending
upon commencement of their business/ establishment of facilities, committee may decide on merits
for registration of the vendor considering their facilities and expertise.
3.5.5 It is observed that some of the manufacturers of repute / public sector undertakings normally do not
apply for formal registration. In such cases, IMM Deptt shall send the applicable form to prospective
Vendors, informing them of HAL’s intentions to include their name on the approved supplier list and
gather details about their products/ capabilities/ financial standing etc. Such firms may be registered
with exceptions also (to be recorded) upon specific approval of Head of Division, even if they have
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not furnished the full details but they are considered potential vendors based on past transactions/
reputation of organization/ brand image/ leading position in market etc.
3.5.6 Vendors are to be advised to register through e-procurement portal. Centralised vendors directory
should be available in e-procurement portal for the selection of vendors for procurement.
3.6 a) Design Development
Press advertisements to be issued with broad scope of work, qualification requirements and the
criteria of selection spelt out besides sending requests to known and likely source and source
that hold current approval from CEMILAC/DGAQA for design and development. The press
advertisement needs to be considered with full details/documentation available at HAL’s Website.
b) Indigenisation: Source Selection
i. If the value of procurement for next 5 years is more than Rs. 2 lakhs per annum but less than
Rs. 10 lakhs/per annum, then the vendor can be chosen from indigenization compendium,
sources prescribed in para-3.4 subject to meeting the qualifications requirement, with
minimum of 3 vendors.
ii. Press advertisement to be called for value more than Rs. 10 lakhs per annum.
iii. On single source basis for value upto Rs. 2 lakhs per annum.
3.7 Based on above, a list of approved Vendors, identified for a product or a class of product, shall be prepared
after taking into consideration their capabilities, capacity and other factors as given at next para.
3.8 Approval
3.8.1 Registration of Vendors will be done based on recommendations of a committee consisting of

representatives from Finance, Quality Control, IMM, Methods and User Department where ever
applicable. The committee shall consider one or more of following criteria :
a. The Vendor is called up in Design Documents/ToT agreement/Technical documents of particular

aeronautical product.
b. The Vendor for Aeronautical items shall have necessary authorization to supply such items.
c. Technical capability and production capacity
d. Financial soundness / stability
e. Quality assurance
f. Past performance
g. Reputation of supplier’s product
h. After-sales service organisation and depth of service
i. Details of major customers
3.8.2 The committee may obtain requisite details from concerned vendors to arrive at their recommendations.
If required, the committee may visit/ inspect the works / business premises of the suppliers applying
for registration.
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3.9 It is to be ensured that the Vendor possesses the necessary professional, technical, financial and
managerial resources and competence required. In case of stockist / distributors of proprietary items
document evidencing OEM’s authorization to be made available. In case of items of common use
or standard specification items the information of stockist / distributors available in the OEM’s web
portal /catalogues can be considered.
3.10 The suggested parameters for scrutiny of application forms submitted by vendors shall be as per the
format (Annexure-04, 05, 06):
3.10.1 In case of stockist /distributors of foreign OEMs located in foreign country, credentials to be
established through information obtained vide Annexure-06. If required, credential to be established
by a team visiting the stockist / distributors.
3.10.2 Based on the findings and recommendations of the committee, Head of IMM Deptt shall recommend
the vendor/s to Head of Division for formal approval with initial period for five years. After Head of
Division’s approval the vendor shall be allocated a registration number and advised the registration
number allotted to them.
3.10.3 Vendors shall be allotted a registration number in format as prescribed by ERP system. IMM Dept.
should re-register the vendors over a block of five years by obtaining information afresh as per vendor
registration requirement, and update the records.
3.10.4 At any point of time during the validity of vendor registration if it has come to the knowledge of the
Division any change in the information with reference to the details provided at the time of registration
the same need to be verified and updated.
3.10.5 A concerted effort shall be made to update the vendor directory with detailed category of items
against each vendor. This will help in selecting right vendors for tendering and to obtain competitive
offers.
3.11 Removal of firm’s name from the approved list
3.11.1 A firm/vendor may be removed from the list of approved suppliers, if on account of its performance
or other disabilities, it is no longer considered fit to remain on the approved list. Orders, removing a
firm/ vendor from the list of approved suppliers, will not be endorsed to Agencies/ Depts. other than
HAL.
3.11.2 A firm’s name may be removed from the approved suppliers’ list for one or more of the following
reasons:
a. Failing or neglecting to quote in response to invitation to tender for 10 successive enquiries, for
their range of products.
b. Failing to execute the contract / order to HAL’s satisfaction, except in case of Force Majeure
Conditions.
c. Failing to abide by the agreed terms and conditions under which contract was signed or purchase
order placed.
d. Making a false declaration to HAL.
e. Failure to meet Quality standards or when concerned Aeronautical Authorities have withdrawn, or
denied renewal of, approval of the Vendor as supplier of aeronautical stores.
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f. Scoring a vendor rating of less than 50 consecutively for over last 3 years.
g. When the required technical staff or equipment is no longer available or there is a change in the
production line.
h. The firm is declared bankrupt or insolvent.
i. The Directors or officers of the firm are convicted of any criminal offence
j. The retention of the firm’s name in the list of approved suppliers is not in public interest.
k. Any other reasons, which might disable the supplier from satisfactorily performing the execution
of likely contracts or purchase orders.
l. Using corrupt or unfair means to gain advantage.
m. Recommendation of Vigilance duly approved and by an officer not below the rank of Director of
the Company.
3.11.3 Head of IMM shall recommend removal of the firm from the Approved Suppliers List for any of the above
reasons. In such a case an opportunity for representation by the vendor to be given to response within
a time period of 10 working days. The firm’s name shall be deleted from the vendor directory and from
e-Procurement portal also after obtaining Head of the Division’s approval in case the vendor fails to
provide justifiable reason for continuation. Orders removing a firm from the list of approved suppliers shall
be communicated to IT together with reasons there-of. Such an order shall also be endorsed to other
Divisions for their information and caution. Copy to be marked to CVO for information.
3.11.4 The firm shall not be considered for fresh registration for a minimum period of one year or for
such extended period(s) as may considered appropriate by Head of Division, based on IMM’s
recommendations. Once removed, the name of a firm may not be restored on the approved list
unless it satisfies the normal registration requirements and the competent authority is satisfied that
the firm should be re-registered for which clear speaking orders must be attached by the Competent
Authority. During such period(s), offers received from such firms against open tender shall not be
considered.
3.11.5 If at any stage it is revealed that the proprietor or any of the partners of the firm whose name has
been deleted from the approved list is a working partner in any other firm registered with HAL or has
managed to get the deleted firm registered with a new name, the name(s) of such firm(s) shall be
deemed as deleted from the approved supplier’s list.
3.12 Suspension
3.12.1 Suspension of business may be ordered where, pending full enquiry into the allegations, if it is
considered undesirable that business with the firm should continue. Such an order may be passed:
a. If the firm is suspected to be of doubtful loyalty to India;
b. If the Central Bureau of Investigation or any other investigating agency recommends such a
course in respect of a case under investigation; and
c. If the Company/ Ministry/ MoD is prima facie of the view that the firm is guilty of an offence
involving moral turpitude in relation to business dealings which, if established, would result in
business dealings with it being banned.
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3.12.2 An order of suspension shall be passed by the Head of the Division. During suspension period,
vendor will continue to execute the existing orders. No fresh enquiry needs to be issued to the vendor
during suspension period by the Division.
3.12.3 Such an order shall also be endorsed to other Divisions for their information and caution. Copy to be
marked to CVO for information.
3.13 Banning of Business Dealings with Firms
3.13.1 Banning of business dealings with a firm shall be of two types:
a). Banning by one Complex/Division including its attached and subordinate offices.
b). Banning by the Company/ Ministry including their attached and subordinate offices.
3.13.2 Banning by one Complex/Division
a). An order of first type for banning business dealings with a firm shall be passed by head of
the Division concerned, if applicable at Division level. If it is recommended by the Division for
Complex level, banning shall be with the approval of Head of the Complex.
b). Such an order may be passed in cases where the offence is not considered serious enough to
merit a banning order of the second type, but, at the same time, an order removing the name of
the firm from the list of approved suppliers is not considered adequate.
c) It shall be passed for a specified period.
d) It shall be extended to allied firms also.
e) It shall be circulated to other Divisions/ offices of the company for information and caution.
However, the order shall cover all the attached/ subordinate offices, of the Complex/Division
issuing the order. A copy of the order should also be sent to the respective Vigilance department
for information.
f) No contract of any kind whatsoever shall be placed with a banned firm including its allied firms by
the Complex/Divisions issuing the order and its attached and subordinate offices after the issue
of banning order. Contracts concluded before the issue of the banning order shall, however, not
be affected by the banning order.
3.13.3 Banning by the Company/Ministries
An order for banning business dealings with a firm implies that all Departments/Offices of the company
are forbidden from dealing with that firm and its allied firms also.
3.13.3.1 The grounds on which banning may be ordered are:
a. Government Order to that effect
b. If security considerations including question of loyalty to the State so warrant
c. If the proprietor of the firm, any of its partners or the Company itself is convicted by a court of law
following prosecution by the Central Bureau of investigation or under normal process of law for
offences involving moral turpitude in relation to business dealings
d. If there is strong Justification for believing that the proprietor or employee, or representative of
the firm has been guilty of malpractices such as bribery, corruption, fraud substitution of tenders,
Page 33
interpolation, misrepresentation/ misinformation/ poor or substandard quality of work/ evasion or

habitual default in payment of any tax levied by law
e. Gross negligence or default in dealing with HAL enquiry/ Purchase Order.
f. If the firm continuously refuses to return Company (Corporate Office, Complex/Division) dues
without showing adequate cause, and is satisfied that this is not due to a reasonable dispute,
which would attract proceedings in arbitration or court of law.
g. If the firm/party employs a company servant, dismissed/removed on account of corruption, or

employs a non-official convicted for an offence involving corruption or abetment of such an
offence, in a position where he could corrupt Company servants,
h. If at any stage, it is discovered by HAL that a person, whose Company/firm had been banned
dealings earlier and again enters HAL with a new/different name of his company or as a partner
of another company,
3.13.3.2 The banning if required to be introduced at instance of requirement of Division of HAL at company
level, detailed reasons along with justification and recommendation to be forwarded through Complex
Office to C.O. IMM.
3.13.3.3 Such an order shall be endorsed to and automatically implemented by all of the Company/Complex/
Division/Departments including their attached and subordinate offices.
3.13.3.4 A banning order shall specify
a. The specific Period (permanent if required) for which it will be effective; and
b. The names of all the partners, directors etc. of the firm and its allied concerns.
3.13.3.5 No contract of any kind whatsoever shall be placed with a banned firm, including its allied firms by all
Departments/offices of the Company after the issue of a banning order. Contracts concluded before
the issue of the banning order shall, however, not be affected by the banning order. Even in cases of
risk purchase, no contract should be placed on a banned firm.
3.13.3.6 A banning order will be circulated to all Departments/offices. Copy to be marked to CVO for information.
3.13.3.7 Orders for banning a firm shall be passed by Chief of IMM, Corporate Office with approval of Director, with
a provision to appeal to CMD. Banning and suspension orders shall be classified as “CONFIDENTIAL”.
3.14 Revocation of Orders for Banning/ Suspension of a Firm
a) Suspension : Duration of suspension can be for a minimum period of 6 months and a maximum
period of 2 years except for condition in 3.14.1 & 3.14.2.
b) Banning : Duration of Banning for a minimum period of 2 years can be extended after review for
additional period of 2 years or permanent if required except for condition in 3.14.1 & 3.14.2
3.14.1 An order for banning/suspension passed for a certain specified period shall be deemed to have been
automatically revoked on the expiry of that specified period and it will not be necessary to issue a
specific formal order of revocation, except that an order of suspension/banning passed on account
of doubtful loyalty or security consideration shall continue to remain in force until it is specifically
revoked.
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3.14.2 An order of banning on grounds of conviction by Court of Law may be revoked if, in respect of the
same facts, the accused has been wholly exonerated by a court of law.
3.14.3 Under exceptional circumstances, the authority (who has approved the suspension/banning) may on
a review; revoke a banning/suspension order if it is of the opinion that the disability already suffered
is adequate in the circumstances of the case. Revocation order must be unambiguous and very clear.
3.15 Communication to Firms regarding removal from registration/suspension/banning
The decision regarding removal from Registration/ Suspension/Banning of business dealings taken
after the issue of a show cause notice and consideration of representation, if any, in reply thereto
should be communicated to the firm concerned. However, in the case of suspension of Business
due to the reasons mentioned at para 3.11, the same will be communicated to the firm only if firm
approaches the authorities seeking the reasons for suspension.
3.16 Review of Suspension/Banning Order
The Complex/Division, who originally suspended/banned the firm or recommended for suspension/
banning may, on representation or appeal from the firm or for any other well founded reasons, review
and recommend revocation of banning/ suspension orders, for approval by the same authority who
has originally approved the suspension/ banning.
3.17 Maintenance of Up To Date List of Firms issued with Suspension/Banning
All the Divisions/Offices shall be responsible for keeping an up to date list of firms against whom
orders of suspension/banning have been issued. Corporate Office (IMM) will issue amendments to
the “Directory of Firms with whom Business Dealings have been Banned” as and when additions/
deletions to the same take place. The directory of banned firms should be centrally accessible.
3.18 Definitions
a. Firm: the term ‘firm’, used in the above para includes an individual or person, a company, a
cooperative society, a Hindu undivided family and an association or body of persons, whether
incorporated or not, engaged in trade or business.
b. Proprietor: This term includes directors of a private limited company, members of a Hindu
undivided family, a member of an association of persons and a Director of a Public Limited
Company.
c. Allied Firm: All concerns, which come within the sphere of effective influence of the banned/
suspended firms, shall be treated as allied firms. In determining this, the following factors may be
taken into consideration:
i. Whether the management is common;
ii Majority interest in the management is held by the partners or directors of banned/ suspended
firm;
iii Substantial or majority shares are owned by the banned/ suspended firm and by virtue of
this, it has a controlling voice.
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CHAPTER - IV
ASSESSMENT AND AUTHORISATION OF REQUIREMENTS
FOR PURCHASE AND SCRUTINY
4.1 Purchase Request
All purchase requirements are to be properly assessed and are to be formally authorised by the
competent authority as per the delegation of powers in force. The provisioning of the stores needs
to be done with utmost care taking into account the available stock, outstanding dues / supplies,
the past consumption pattern, average life of the equipment/ spares. The requirements also need to
be consolidated so as to get the most competitive and best prices. Purchase request to be raised if
practicable by grouping similar type of items. The requirement can also be consolidated vendor-wise
taking into consideration the annual requirement. Any MPR which is issued for an item for a particular
project in less than 6 months from the previous MPR for the same item under the same project will
amount to splitting unless the same is necessitated due to additional orders received in the interim
period or increase in production plan. Procurement for production hold up or AOG requirement is not
considered as splitting. The requirements should not be bifurcated / split, without valid reasons or to
avoid approval from higher authorities. Draft Supplementary Agreements (DSAs) negotiated against
different indents/MPRs, if processed separately, shall not be considered as splitting. No purchase
action is to be initiated without a valid written request. Purchase requests shall be raised as per
details given below:
a. MATERIAL PURCHASE REQUEST (MPR): Form Annexure-07 shall be used by indenting

departments for all revenue items. MPR for Project Materials should accompany with Material
adequacy statement / review sheet based on Production Programme/task (includes manufacturing
and ROH programme). The bill of material certified by Production Engineering and amended from
time to time is the base document. In respect of Repair/Overhaul programme for the Mandatory/
Non mandatory spares along with P-factor to be certified by Production Engineering. For
recurring requirements efforts should be made for entering into LTBAs/LTRAs. However where
MoQ/ Standard package size is involved the same can be considered.
b. CAPITAL PURCHASE REQUEST (CPR): Form Annexure-08 shall be raised by the Head of Planning
or any other officer specifically authorised for purchasing the sanctioned capital equipment.
d. URGENT PURCHASE REQUEST (UPR): Form Annexure-09 shall be used.
e. PETTY PURCHASE REQUEST UPTO Rs. 15000 (PPR): Form Annexure-10 shall be used.
4.2 Estimates
As the estimated rate is a vital element in establishing the reasonableness of prices, it is important that
the same is worked out in a realistic and objective manner on the basis of prevailing market rates, last
purchase Prices, economic indices for the raw material/ labour, other input costs, wherever applicable
and assessment based on Engineering estimates, intrinsic value etc. Preparation of estimated rates by
merely extrapolating the last purchase price or by applying a uniform yearly compounded escalation
over previous price may not be sufficient. It should be ensured that the estimates are not accessible
to outside agencies. Estimates which are more than one year old or where there is a drastic change
in the market can be revised before the bid opening (technical bid in case of two bid system) with the
approval of Head of Division where CFA for provisioning is Head of Division or below, and approval
of concerned CEO in case where CMD/CEO is the authority for approving for provisioning. Estimate
once made shall not be revised after opening of commercial bids. In case it is found that due to
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assumptions adopted that estimates are not realistic, the same shall be brought to the notice of CFA
at the time of approval of the purchase proposal.
4.3 Purchase Committee (PC)/Material Provisioning Committee (MPC)
PC/MPC meetings should be held regularly at the Divisions, at least once every week, with all
members present. Head of Division may review/issue necessary directives to ensure compliance. The
PC/MPC to be chaired by Head of Division with Head of Planning, Head of Finance, Head of Quality,
Head of Design liaison, Head of IMM as members and Head of Purchase as member secretary for PC
and Head of Material Planning/user for MPC. Other members can be co-opted on need basis.
4.3.1 Secretary of the meetings (normally Head of IMM/his representative) shall ensure that Indenting
Sections/ Material Planning have given all required documents like specifications, drawings, list of
probable vendors in case of MPRs and copies of RFQ, Quote, comparative statement and other
documents as prescribed by the “Purchase Proposal Formats” are available for discussion during
the meetings of PC/ MPC. As per Chapter-II, various departments are authorized to raise the MPRs
covering their requirements, and all such departments should ensure their MPRs are prepared on
above lines and presented to MPC at the scheduled meetings for review / discussion/approval.
4.3.2 PC/MPC shall always refer to “Adequacy Statement” prepared by Indenting Section, in accordance
with enclosed format, and submitted with every proposal.
4.3.4 Formal minutes of every meeting recording MPRs/PO proposals discussed, the discussions held and
decision taken in each case, shall be issued by the secretary of the PC/MPC.
4.3.5 Approval by circulation shall be resorted to, only in exceptional cases, where the MPR/Proposal
cannot wait for next meeting to take place. In such cases, the movement of Proposal/ MPR shall be
by hand.
4.3.6 All provisioning and procurement of value more than Rs. 15 lakhs in case of project materials and
value more than Rs.5 lakhs in case of non-project materials should be cleared through PC/MPC.
All provisioning/procurement on single tender basis except proprietary, licensor/OEM, customer
nominated and licensor nominated sources should also be cleared by PC/MPC
4.4 Registration of Purchase Requests
All Purchase Requests shall be centrally registered in the Purchase Department in the Purchase
Request Progression Register/Database.
4.5 Scrutiny of Purchase Requests
4.5.1 Purchase requests are to be scrutinized preferably within 2 working days of their receipt by the
concerned officer.
4.5.2 Scrutiny of purchase requisitions shall cover the following points:
a. Description of Part No., Code No., Specification, Quantity, etc., indicated appears to be correct.
b. Catalogue number is given against each item wherever required.
c. Drawings, wherever applicable, are enclosed in sufficient number of sets.
c. In case of repeat purchase, last purchase price, and source of supply is mentioned.
e. Delivery requested is realistic.
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f. Price estimate is realistic and the basis of preparation is kept in record.
g. Purchase request for imported capital items is supported with technical justification for import
and catalogues / pamphlets describing the machine tools.
h. CPR shall also make reference to item serial No. in the Capital Budget.
i. The officer after scrutiny shall endorse clearly the tendering mode on the purchase requisition
and send the same to purchase assistant for further progression.
4.6 Provisioning for Repair Overhaul of Aircraft/Engine Components & Test equipments:
a) 1st time repair Overhaul (RoH): The charges for repair/overhaul are known only after OEM/or
licensor examines the items. In such cases, the items can be despatched to the vendor on
‘zero value’ Purchase Order based on provisioning approval by Head of Division.
b) Subsequent arisings of ROH: Un serviceable LRUs/Rotables/other items can be consolidated

based on the estimate and previous ROH charges. Approval of CFA for provisioning is to be
taken. Item can be dispatched to OE/Licensors on Zero value PO.
c) Amendment of the PO after receipt of repair charge will be approved by CFA as per DoP.
d) Long Term Repair Agreement: Attempt should be made based on firm & forecast repair arising
for next 3 – 5 years. LTRA can be entered with OEM & licensors.
e) Item can also be repaired through OEM approved Repair Centers. In case of availability of
more than one such centre, limited tendering procedure to be followed.
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CHAPTER - V
PURCHASE ENQUIRY AND SELECTION OF APPROPRIATE PURCHASE MODE
5.1 Tendering method should be flexible enough to accommodate different procurement methods.
The most transparent method is to allow all the potential suppliers to participate in the tendering
process without limitations. However limited tendering is justifiable wherever it is not feasible or
efficient to consider and evaluate large number of potential suppliers. The limited tendering should
be equally transparent and to be conducted in accordance with the procedures laid down in this
manual. Selection of suppliers for tendering should ensure that items planned for procurement is
in the supply range of the bidders. Procurement of non-project material through Proprietary / single
tendering could be used only in exceptional circumstances since the selection criteria for suppliers
are not available. Once in every two years review of the items procured on proprietary/single tender
to be made and the scope for competition to be explored. A Committee needs to be constituted with
the approval of Level I executive to carry out the review.
5.2 Purchase Enquiry
The invitation to tender and instructions at enquiry stage are an important step as the vendor’s offer
is based upon these instructions. Any ill-conceived, indifferent and incomplete action at this stage
will result in unnecessary delays, increase in paper work and rush purchases. The enquiry shall be
carefully prepared indicating requirements in clear terms. Some suggested Conditions of Tender for
inland and foreign enquiries are placed at Annexure-11 and Annexure-12 respectively.
I Specification
a. The enquiry/tender shall indicate full description and specifications of the required material.
The user department to ensure that :
i) The specification should be such to meet the essential needs.
ii) To the extent practicable the specification should be objective, functional, generic and measurable.
iii) The specification should spell out the relevant technical, quality and performance related
parameters.
b. Drawings, wherever available, shall be sent along with the enquiry/tender.
c. Enquiry/Tender must be invited to standard specifications as far as possible. Under no

circumstances, terminology such as ‘best quality’, ‘commercial quality’ or ‘as per previous
supply’ etc. shall be used. Wherever applicable and available a technical specification shall be in
conformance with national/international standards.
d. Where the specification cannot ensure required quality standard and there are prominent makes
of such items in the market, if so considered appropriate, the makes/catalogue numbers of
more than one manufacturer (not less than three) can be indicated along with the specifications.
The makes/ catalogue numbers, brand and models should be finalized by a Committee
comprising of User and Planning/Method Engineering with approval of head of Division and by a
specifically constituted committee with the approval of Head of HMA, Medical, other offices and
establishments, respective GM/ED in Corporate Office. The purchase under this will be limited to
Rs.10 lakhs in each case.
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e. In case where no drawing is available and which cannot be correctly described, a sample is to
be shown to the vendors or they may be requested to submit their sample. The specific need
of making trial/sample testing and other additional methods of technical evaluation of the offer
shall be clearly mentioned in the tender documents. RFQ should have a clause for submission of
samples along with the quotation (technical bid in case of two bid) wherever samples are required
for evaluation. Samples should be submitted by the bidders on or before the due date and time
of the tender failing which the offer will not be considered.
f. In case of procurement of Capital equipment, Divisional Technical Committee will be responsible

for preparing, finalizing and approving the technical specification of equipment, following the
procedure as per para-7.10.
g. Any change to specifications recommended after tendering shall be approved by the same
committee/ authority that approved the specifications originally. Such changes will be notified in
the same manner as the original tendering was done.
h. Post tender (after opening of bids) changes in the technical specification, in case of competitive
bidding, are not acceptable. In case the change in specification required then the same need to
be justified and retendering action may be taken.
II Others
a. In cases where HAL reserves the option to supply material, the firms may be asked to give
alternative offers with their own supply of materials and with HAL supplied material.
b. Indent Delivery Date
c. Delivery expected shall be realistic and specifically indicated. (Words like “Urgent” / “Immediate”
etc are to be avoided). In order to meet the project requirement, it would be prudent to incorporate
an acceptable range of delivery period with the stipulation that no credit will be given for earlier
deliveries and offers with delivery beyond the acceptable range could be considered at discretion
of HAL.
d. In case quantity required is not readily marketed, Minimum Order Quantity stipulation shall be
requested in the tender enquiry. In case of raw materials and other such specific items where
exact qty. cannot be supplied qty. tolerance of ± 10% for supply can be considered.
e. Clauses relating to Earnest money, if called for, Delivery Schedule, Payment terms, Performance/
Warranty Bank Guarantee, Predespatch inspection, Arbitration, Liquidated Damages/Penalty for
the delayed supplies and Risk purchase etc. must be incorporated in the bid/ enquiry documents.
The mandatory, desirable or other conditions to be clearly specified in the bid documents. Clearly
indicating that the offers not fulfilling the mandatory conditions shall be liable for rejections and
the offers in variance to desirable condition shall be considered but with corresponding loading,
in tender evaluation. All non priced evaluation should be objective and quantifiable and indicated
in the tender document. Wherever applicable relative weight to be attached to each criterion
should specified in the tender.
f. Tender document should indicate whether the quote to be offered by the vendor is fixed price
quote or escalation if any will be acceptable. Price escalation provisions are not necessary in
simple contract involving delivery of goods within 18 months. The tender document for contracts
for longer duration may include price escalation.
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g. Bid received in different currencies should be converted to a single currency stated in the tender.
The criteria for conversion of different currencies to single currency to be spelt out in the tender.
The currency of payment and terms & method of payment to be spelt in the tender. Tender
document should also specify if alternative payment method and terms are allowable and how
this effects bid evaluation.
h. All requests for quotations/tender enquiry must specify “Last Date for submission of Quotes”.
The tender must also state “Tenders received after due date and time shall not be opened and
shall not be considered.” This should be prominently mentioned in the tender enquiry. In all cases
of Open/Limited Tendering, in addition to specifying Date, Time & Place of opening of Tenders in
the tender documents, the Tender shall make a specific mention that “Tenders shall be opened
on stipulated date & time in presence of the intending Bidders and that Bidders or his authorised
representative may attend the Tender Opening.
i. A clause in the tender/enquiry shall be included stating that HAL will not be responsible for the loss
or delay in receipt of tender documents/tender in transit, inability of vendor to upload the tender
documents in E-Procurement portal and HAL reserves the right to reject Late/incomplete tenders.
j. The exemptions/relaxations applicable to SSI’s, ancillary units, PSUs should be specified

in the tender notice (in line with prevailing Govt. directives). The current directive is placed at
Annexure-17. The same would be updated periodically as and when Govt. issues new guidelines.
k. The RFQ/enquiry should indicate that bidders shall be required to submit bids/offers directly to
HAL either through post/courier/drop in tender box in sealed cover with clear marking of bidders’
details. Response received, without bearing the bidder address not to be entertained. This does
not apply to e-Tenders.
l Tender document/enquiry should specify the name of the Bank with respect to adoption of
exchange rate for commercial evaluation purpose.
m. Commercial evaluation criteria should be mentioned in RFQ/enquiry.
n. Evaluation criteria whether on “package basis” or “line item basis” to be indicated in the tender
based on recommendation of the User Department. In case the criterion is not spelt out in the
tender then the evaluation will on the line item basis.
o. Option of seeking offers with or without High Sea sales provision if applicable to the particular
procurement to be indicated in the RFQ. (Guidelines for High Sea sales and draft agreement is
placed at Annexure-13). Supplier needs to provide/disclose the name and address of the OEM/
Foreign Supplier to HAL prior to supply. The goods to be Custom cleared and delivered on FOR
HAL Division basis by the supplier.
p. Applicability of the taxes (Sales Tax, Excise Duties, Octroi etc) should be explicitly indicated by
the vendor in his response either in percentage or in absolute terms. In the absence of this input
the offer would be considered all inclusive. RFP should incorporate the above appropriately.
q. No criteria or procedure other than those mentioned in the tender documents can be used in
evaluation of tenders.
r. Canvassing by tenderers in any form, including unsolicited letters on tenders submitted or post
tender corrections shall render their tenders liable for summary rejection.
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s. A clause in the RFQ needs to be included indicating, in case of limited, single, proprietary tender,
the tender received from authorized dealer/distributor/channel partner to whom RFQ was not
sent, will not be accepted, if the tender is not accompanied with the authorization letter from the
vendor to whom RFQ/tender enquiry was issued.
t. While evaluating the bids covering a longer period (more than one year), the quoted prices
pertaining to second year onwards (beyond 12 months from the last date for submission of bids),
i.e. cash outflow from HAL to the Vendor/Contractor/Service provider from 13th month onwards
are to be discounted to the net present value (NPV) as per the procedure defined in Annexure-28
for comparing the bids on equitable basis and deciding the lowest evaluated responsive bid.
5.2.1 Source Selection: In order to ensure that enquiries are sent to the right sources, the Purchase Groups
shall use the Approved Supplier’s List both for imported and indigenous purchases besides sources
suggested by user / indenting department. Sources suggested by user/indenting department should
be in the registered list of sources. It shall be the responsibility of the Head of IMM Department to
ensure periodical updating of this list.
5.2.2 To generate adequate competition, it is necessary that sufficient number of sources is addressed. For
this purpose, a system of calling tenders by giving equal opportunity to all approved suppliers should
be followed.
5.2.3 The selection of vendors, communication details like postal address, E-mail ID, Fax No, Contact
Person etc of RFQ with standard terms and conditions should be duly approved by Officer handling
the respective procurement not below the rank of Gr-III, where CFA is Head of Division and the
cases of procurement which require approval by CEO/CMD/PSC/Board should be approved by
Head of IMM. RFQs for ToT/Co-development/Co-production programmes should be prepared by a
Committee comprising of Project Planning, IMM, Finance and other members as approved by the
Head of Division.
5.2.4 Mode of Dispatch of Enquiry: Proof of dispatch of Enquiries to the prospective bidders must be
placed in the respective purchase file. Depending upon mode of dispatch of enquiry, it could be
Certificate of registration (dispatch by post), or Courier’s receipt, or Fax Transmission record or a
receipt acknowledgement or E-mail confirmation or E-Tender report. For this purpose, Central
Registry shall be instructed to maintain separate folios for dispatch of each tender enquiry, paste the
postal registration slips and forward to IMM so as to file in the respective purchase files. This applies
to normal mode of tender and not for e-tender.
5.2.5 Enquiries by E-mail may be resorted to only after having ensured that system provides for confirmation
regarding dispatch of enquiries.
5.2.6 In case of purchases of highly technical stores, where, although technical requirements are fully
established, specifications of the stores to be purchased are not defined to the last detail and there
exists possibility of offer of alternative systems meeting the technical requirements listed in the
enquiry, two-bid system shall be followed.
5.2.7 Two Bid System: In this system, the firms are requested to give two separate offers, both in sealed
covers. Both the offers will be exactly the same, except the offer No. 1 will have all prices/rates/
values blanked out and will be called TECHNICAL Bid. The offer No. 2 will be PRICE Bid having the
prices/rates. Each bid will be put in separate sealed covers, each marked with the Tender number,
due date and as TECHNICAL Bid or PRICE Bid as the case may be. Both the sealed covers will be
put in a single cover, which will be again sealed and super scribed with tender number and due date.
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5.2.8 In order to ensure that the invitation to bid is extended only to those who have the capability, pre
qualification of bidders can be considered if required. Tenders are issued only to pre qualified bidders.
5.2.9 On the opening date, only the Technical Bids are opened in the presence of representatives of the
firms, who have quoted and choose to be present.
5.2.10 The offer No. 2 (PRICE Bid) will be opened only after the Technical Bids are technically evaluated. The
Price Bids of only those firms, whose technical bids are found to be technically acceptable, will be
opened with due notice to be present for the opening, if they choose to. However, when only one offer
is found technically acceptable, this Price Bid may be opened without calling Firm’s rep. for tender
opening, so that the concerned firm will not get the information that only their offer is technically
acceptable which may affect possible negotiations if required.
5.2.11 Firms which have not been accepted by Technical Committee shall be intimated of rejection and the
unopened price bid shall be returned within 15 working days of receipt of TEC report.
5.2.12 For ensuring that only competent and financially sound parties are invited to quote in the case of time
bound programme or for entering into long term rate contracts, the enquiry shall clearly spell out the
basis on which parties offering their services will be selected and short listed for participating in the
subsequent price tendering.
5.2.13 Tender Enquiry must clearly ask for Vendor’s ability to arrange export License from his Govt and
supply goods to India, in case an order is placed.
5.2.14 In general a period of three weeks for indigenous sources and four weeks for foreign sources may be
given for submission of quotations. except, in cases of recorded emergent requirements/ proprietary/
single tender, wherein also, a reasonable time should be permitted and tenders should be sent by
faster means like speed post/ fax/ e-mail, after taking approval of Head of IMM with recorded reasons.
5.2.15 The tender will be given free of cost.
5.3(I) Earnest Money: The primary objective of submission of Earnest Money Deposit is to establish the
earnestness of the bidder so that he does not withdraw, impair or modify the offer within the validity
of the bid. It also helps in restricting, if not eliminating ‘speculative’, ‘frivolous’ or ‘wait and see’
bids. Except in case of Proprietary/Single/Limited Tender or a mode of tendering, where selection
of Vendor/s has been made by taking care of suitability, reliability and capability of the Vendor to
quote suitably, thereby eliminating the need for EMD, submission of EMD should invariably form a
condition of Tender in all other cases. In case of relaxation of conditions relating to EMD, for reasons
to be justified, approval of competent authority as per DOP should be obtained based on merits
of each case, prior to invitation of bid. The terms & conditions, where EMD has been asked, should
clearly stipulate that the offers without Earnest Money Deposit would be considered as unresponsive and
rejected.
5.3.1. The following guidelines may be observed while calling for EMD –
a. Earnest Money Deposit (EMD) shall be specified in all cases of Open Tender.
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b. The EMD to be charged shall be a fixed amount, based on estimated value of stores as follows:
Estimated value of Tendered Equipment EMD

Indian Rs. lakhs Foreign* US$
Less than Rs. 10 Lakhs nil nil
Rs. 10 – 25 Lakhs 0.20 400
Rs. 25 – 50 Lakhs 0.40 800
Rs. 50 – 100 Lakhs 0.75 1500
Rs. 100 – 250 Lakhs 1.75 3500
Rs. 250 Lakhs and above 3.00 6000
*may be rounded to nearest $ 10, depending upon exchange rate (TT selling rate to be considered for
foreign currency exchange rate as on date of instrument of EMD).
c. For tenders of the value of rupees ten lakh or less, EMD need not be called for.
d. The tender documents/ Notice inviting Tenders must clearly specify:
i) The form in which EMD shall be acceptable (DD/Bankers Cheque/Pay order/Bank Guarantee).
In case, EMD has been specified to be deposited in DD only, no other form of EMD should be
accepted. In case EMD is specified as Bank Guarantee, the same is to be submitted in the form
of irrevocable Bank Guarantee from the scheduled Banks (or, in case of foreign suppliers, from
Bank of International Repute) valid for 28 days beyond the validity of the Bid. The EMD can also
be paid through WIRE / SWIFT transfer, the proof of which shall accompany the bidder’s offer.
ii) EMD needs to be submitted by participating bidder . However, the EMD remittance document,
either in Indian currency or any other convertible currency of the specified amount, can be
arranged by the Indian subsidiary/branch office in India of a foreign bidder which shall be
submitted along with a certificate confirming the relationship of subsidiary/branch office
in the bidder’s offer. Offers not accompanied with requisite amount of EMD or EMD not
submitted in the specified form shall be summarily rejected.
iii) That in case of two Bid system, EMD should be submitted along with Technical Bid/ Offer.
EMD in original form will only be acceptable. Copies of EMD documents/instruments in
Technical Bid not acceptable.
iv) In case technical bid does not contain original instrument towards EMD, offer will be
considered as unresponsive and rejected.
(In case pre qualification bid has been sought separately, in that case EMD should be called for
in the original form along with pre qualification bid, instead of technical bid).
v) That, Vendors exempted from submission of EMD as per Govt. of India directives must submit
certified copy of GOI’s authority for such exemption in lieu of EMD.
vi) EMD will not carry any interest for the period it is retained with HAL EMD shall be forfeited if
a tenderer withdraws, amends, impairs, and/or derogates from tender within validity.
vii) The Bidders should indicate the reference & details of submission of EMD in their technical
offer. In case of e-tender, the EMD in the form of hard copy in original to be sent by post/
courier /personal delivery to reach the concerned Division prior to the scheduled closing time
for the tender. The copy of such documents/office should attach in the technical bid of the
e-tender. In case the EMD document does not reach tender issuing authority by the time of
closing of the tender, the offer will not be considered for evaluation. In case WIRE/SWIFT
transfers the transaction code is to be mentioned in the technical bid.
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e. EMD received along with tenders should be forwarded to the Finance Deptt within 3 working days
of the opening of the Tenders with the details of the participating firms.
f. EMD furnished by the successful bidder may be appropriated for security deposit or Performance
Guarantee for the warranty period.
g. Proper record of submission of EMD by vendors and its refund to be maintained and monitored.
h. In respect of tenders issued where evaluation is on package basis, EMD to be received should be
as per the value specified in the tender document. In case of tender where evaluation is on line
item basis, the EMD applicable will be in accordance with the value quoted by the vendor. For
this purpose, applicable EMD (as per para 5.3.1.b) for various values to be included in the tender
document.
i. Approval of Head of Division to be obtained for forfeiture or encashment of Bank Guarantee

towards EMD with the recorded reasons.
5.3.2 Return of EMD:
a. Return/refund of EMDs preferably within 15 working days from the date of tender opening to the
Bidders whose bids are rejected at the tender opening stage itself or bids which are not considered
for evaluation (indicating the reason for returning)
b. Refund of EMDs to bidders whose bids are disqualified either during pre qualification stage or
technical evaluation stage (as the case maybe), within 15 working days of receipt of TEC report.
c. Refund of EMDs to bidders whose bids are commercially not competitive (except L1 bidder) within
15 days of determination of L1 (i.e. after signature of price comparative statement by Finance & IMM)
d. Refund of EMDs to all bidders in case the tender is cancelled or retendered preferably within 7
working days time from the date of approval for cancellation/re-tendering. However, if re-tender is
resorted due to withdrawal of offer by L1 bidder, then the EMD of the L1 bidder will not be refunded.
e. EMD may be returned with the approval of Head of IMM if the CFA for the proposal is Level-I or
below & with the approval of Head of Division if the CFA for the proposal is above Level-I.
f. In case of a & b above, it is to be ensured that the unopened price bids (in case of manual tender) of
unsuccessful bidders (not acceptable offers) are also to be returned along with the EMD.
g. Once EMDs returned and the proposal is further processed for evaluation/approval, then no re-
visiting/re-examination of the offers, whose EMD has been returned shall be carried out.
h. A suitable clause to be included in the RFQ to provide RTGS / Bank details of participating bidders
for returning of EMDs.
i. Declaration regarding refund status of EMDs for unsuccessful bidder to be given in proposal put up
to CFA for award of contract/order.
j. The following clause need to be incorporated suitably in the tender documents, if EMD is sought in
the tender:
“The EMD shall be refunded to the unsuccessful bidder within 15 working days in various stages of
disqualification of the bid i.e., tender open stage, pre-qualification / technical evaluation stage and
identification of L-1 stage.”
5.3.2.1 Concerned department processing the tender duly concurred by Finance department shall maintain
a proper record having details of EMDs submitted by the parties, & its refund / return and to monitor
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outstanding cases of non-refund / return of EMDs. Suggested format is placed at Reference-2. Record
should primarily maintained electronically and payments (dues in/out) re recorded in similar means.
5.3 (II) Security Deposit
a. Security Deposit: Bidders will be required to submit the Security Deposit equivalent to 5% of
the total value excluding taxes (If taxes and duties quoted separately otherwise total order value
quoted) of the order within 15 days of issuance of purchase order by way of Demand Draft or Bank
Guarantee in a prescribed format of HAL from a scheduled Bank in India/Bank of International
repute (for foreign vendors) which shall be valid up to 60 days after the completion of contract
period / last supply. Security Deposit will bear no interest. In case the supply order / contract
is not executed to the entire satisfaction of HAL the Security Deposit will be forfeited besides
initiation of risk purchase action. In case any claims or any other contract obligations (related to
supplies excluding warranty) are outstanding, the bidder shall be required to extend the Security
Deposit as required till such time the vendor settles all claims and complete such obligations.
The Security Deposit required to be obtained from the successful bidders for the procurement of
following category of items:
i. Capital items: Capital items of estimated value more than Rs. One Cr.
ii. Services: Services procurement is through open tender.
iii. Design, Development Projects: Estimated Value more than Rs. One Cr.
b. Security Deposit will not be necessary for procurement or availing of services from Licensor/
OEM/proprietary vendors and other Public Sector Undertaking. However, Indemnity Bond needs
to be obtained of the equivalent amount from Public Sector Undertakings while procurement of
items of as indicated at para-a above.
c. Loading factor of 5% shall be considered while preparing Price Comparative Statement for
bidders who have not agreed for submission of Security Deposit. This needs to be stipulated
in the RFQ. In case loading factor has been considered in the CSQ due to non submission of
security deposit, in such case approval for waiver is not required. However, this needs to be
brought in the Purchase Proposal.
d. Approval of Head of Division to be obtained for forfeiture or encashment of Bank Guarantee (BG)
towards security deposit with the recorded reasons.
5.3 (III) Performance Bank Guarantee
a. Vendor shall furnish a Performance Bank Guarantee as per HAL’s format for 10% of the order
value valid up to end of the warranty period from a scheduled bank in India / Bank of International
repute (for foreign vendor) from the date of acceptance / commissioning or otherwise equivalent
amount shall be retained till completion of warranty period and other obligation of Purchase
Order / contract.
b. Performance Bank Guarantee is applicable for Capital items and Design & Development
orders, having estimated value more than Rs. 50 lakhs. Division may decide for incorporation
performance bank guarantee requirement in case of estimated value less than Rs. 50 lakhs based
on type of item.
c. In case vendor does not agree for Performance Bank Guarantee / retention of equivalent amount,
the offer should be summarily rejected.
d. Approval of Head of Division to be obtained for forfeiture or encashment of Performance Bank

Guarantee (PBG) with the recorded reasons.
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5.4 Modes of Tendering
5.4.1 Open Tendering:
Open Tendering is the most preferred method to be followed. Open tendering is a system whereby even
non-registered vendors are free to participate and allowed to quote against the tender advertised in
English language in one (1) English Newspaper having wide circulation
and
Hindi language in one (1) Hindi Newspaper having wide circulation
and
Local (regional) language in one (1) local newspaper, if required.
Wherever, advertisement is released in English Newspaper, it should be mentioned in the end in
Hindi that Hindi translation of the advertisement is available at HAL website hal-india.com. In case
the procurement is intended to be on global basis then the tender to be advertised in the Indian
Trade Journal/Indian Export Service Bulletin (IESB). In addition, copies of the tender documents
may be made available to the Indian Embassies in potential vendor countries abroad for issuing
to the tenderers besides making the documents available to the Trade Commissioners of Foreign
Embassies in India and HAL Resident Managers outside India. In open tendering all the known and
possible sources for the supply of the particular material are made aware of the requirements by
sending to them a copy of the Press Advertisement. The advertisement is also to be hoisted in the
HAL’s website.
a. The complete bid documents along with application form shall be published on HAL web site. It
should be ensured that, there is no necessity for prospective bidders to ask/ obtain some other
related documents from the department manually for participation in the tender process i.e. all
documents up to date are and remain available as equally legally valid for participation in the
tender process as manual documents obtained from the department through manual process.
Part Drawings, Lofts or quality documentation, which form part of tender documents but cannot
be placed on web site, for reasons to be recorded, must be approved by Head of Division. A
mention of such documents must be made on the web site notice and intending bidders be
asked to obtain documents by a written request, by post/ by hand, before a specified date.
b. The complete bid document should be available on the web site, till last date of submission of
tenders, for purposes of downloading.
c. Request for proposals for non-lethal items (i.e. items not connected with any warfare) will also be
published on MoD Website www.mod.nic.in as well as Public Procurement Portal.
d. The web site address must be given in the advertisement/ Notice Inviting Tender (NIT) published
in the newspapers along with e-mail address of the Division/ Office.
e. In case, it is considered necessary to charge for the tender document downloaded from the
computer then the bidding party may be asked on the Web-site to pay the amount by draft/
cheques etc. at the time of submission of the bid documents.
5.4.2 This system is not mandatory for purchase of production items from already approved / proprietary /
developed sources and also where Licence Agreements / Long Term Contracts are in force besides
such other items where prices are controlled / administered by the Government.
5.4.3 The open tender method as indicated above is adopted for all tenders whose estimated value is as
per DoP for this mode of tendering. However, due to special circumstances of the purchase, for valid
reasons to be recorded, the open tender procedure may be waived and limited tenders issued with
prior approval of the Head of Division except in case of Plant and Machinery.
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5.4.4 Tenders may be issued free of cost to Trade Commissioners of foreign countries, Govt. Undertaking,
firms registered with DGS & D, DGTD, NSIC, Director (SSI) and ancillaries attached to other PSUs.
5.4.5 Open Tender method may also be followed in two stage tendering (refer para-5.12).
5.4.6 If considered necessary by the Indenter / User, a pre-qualification process can be followed through
open tendering and invite bid from pre-qualified vendor.
5.4.7 Web Tender: Division can choose to host Tenders for non-project materials and services in “Open”
mode of E-portal for tender value less than Rupees One Crore if considered necessary, without press
advertisement. Such tenders are also considered as open tender. The potential registered vendors
shall also be communicated for their participation besides hosting in HAL web-site for information.
5.5 Pre Qualification of Bidders
In Open and Global Tendering Pre Qualification requirement for participating in the tender may be
called for depending upon the requirement. This is to ensure that the invitation to bid is extended only
to those who have adequate capabilities and resources. The pre qualification criteria, performance
criteria and evaluation criteria should be spelt out in the tender document and these criteria should
be objective and measurable including relevant general and specific experience, financial position.
5.6 Limited Tender
5.6.1 In limited tender, the likely and all suitable sources based on website search or market surveys, if so
required and included in Vendor Directory, are addressed. The vendor directory should be periodically
updated based on the vendor rating. The acknowledgement for receipt of tender enquiry is to be
obtained if it is sent through Registered Post/Courier/Fax. In case of email, the tender enquires should
seek the receipt of delivery of the mail while sending the mail or self generated automatic delivery
report may also be considered.
5.6.2 In respect of limited tender procurement the number of sources to be considered is as per the
following table :
Estimated value less than Rs. 5 lakhs Five sources

Estimated value between Rs. 5 lakhs to 15 lakhs Seven sources or registered sources whichever
is less but not less than five
Estimated value between Rs. 15 lakhs to 50 Ten sources or registered sources whichever is
lakhs less but not less than five
Estimated value above Rs. 50 lakhs All registered sources but not less than five
For this purpose, a system of calling tenders by rotation giving equal opportunity to all approved
suppliers, other things, like rating etc., being equal, should be followed. Where the number of available
sources of supply is less than five, the number of suppliers to be addressed may be reduced with the
approval of the Head of the Division based on estimated cost.
5.6.3 It is mandatory to include the name of last supplier unless the performance in terms of delivery,
quality etc has been recorded unsatisfactory or the objective of tendering is to seek parallel source.
5.6.4 The requirement of Insurance cover such as Marine Insurance, Product Liability Insurance, Asset
Insurance, Director Liability Insurance and other insurances shall only be tendered to Public Sector/
Govt. Companies on Limited Tender basis.
5.7 Proprietary Tender
5.7.1 An item is called proprietary in nature for which
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a. The requirement is for specific item and where no equivalent or near equivalent is available from
any other source and/or all possible sources for the items quote only for the product of same
manufacturer.
b. Procurement from OEM/Licensor/Collaborator or vendor, sources listed by OEM/Licensor (other

than agent/middle men).
c. sources as per Design/Licensor document,
d. product specifically developed by HAL from the vendors through limited/open tender
e. Items standardized by HAL
5.7.2 Procurement of spares (including consumables like Cartridges/Tonners etc. for Printers/Xerox/Fax
machines) required for compatible with the existing equipment from OEM and procurement from
manufacturer retail outlet/authorized distributors for an item of proprietary nature will also be covered
under proprietary procurement. However, enquiry may be sent to number of out lets / distributors to
facilitate procurement at best price, terms & conditions, unless OEM has nominated one of them for
HAL supplies.
5.7.3 For this tendering, Proprietary Certificate (Annexure-14) needs to accompany MPR. Proprietary
certificate shall be signed by the competent provisioning authority as per DOP.
5.7.4 Purchases of spares, components, accessories, and other items used in the repair/overhaul of
aircraft should be sourced as much as possible from Original Equipment Manufacturers (OEM) i.e.
the primary suppliers to the Licensors or from the licensors themselves.
5.7.5 Items are selected/developed for Aircraft/Engine/Accessories at the Design stage, based on specific
technical requirement, tested and proved on the aircraft/engine/accessories and are certified for
further use. The certification procedure generally takes 3 to 5 years. Selection of Vendors, in these
cases, is done at the Design stage which is generally carried out through competitive bidding from
multiple vendors. Having finalized the design of Aircraft/Engine/Accessories, these items are to be
necessarily purchased from the same source on proprietary basis for subsequent serial production.
Change in the source would require considerable investments in time and money and calls for
extensive trials and recertification on Aircraft/Engine/Accessories.
5.7.6 Procurement from proprietary sources will not be considered as sourcing against single tender.
5.7.7 Vendor developed by HAL through limited/open tender taking into consideration anticipated
requirement of the project/programme is considered as proprietary procurement. However, the
developed source shall continue to be proprietary for any further requirement beyond that anticipated.
5.8 Licensor/License Agreements
5.8.1 Tender is addressed to only Licensor/Licensor nominated sources, and designated sources based on
inter Governmental Agreements and General Contracts approved by Government of India.
5.8.2 In case of License Manufacture, the licensor’s document invariably indicates the details of items and
the specific OEMs/vendors from whom these items are to be procured.
5.8.3 Procurement from Licensor nominated sources will be treated as proprietary.
5.9 Single Tender
5.9.1 When the purchase is finalised on the basis of an offer from a single source, it is called a ‘Single Tender
Purchase’. It needs to be recognised that the competition is totally eliminated and the possibility of
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paying higher prices cannot be ruled out. It is imperative that the purchase on Single tender basis
be made with the detailed justification in its support and with the approval of Competent Authority,
including associated finance. In a number of cases, the specifications prepared are copied from a
manufacturer’s catalogue in such a detail so as to exclude competition and result in a single source
purchase. The specifications of the equipment need to be prepared in such manner as to give very
essential requirements leaving other parameters as “desirable” or “preferred”
5.9.2 Occasions where single tender can be made are as given below :
a. When market research reveals that there is only one known reliable source of supply.
b. When the management in the interest of real long term economy and quality assurance and
assured service standards of delivery etc. standardizes on a particular brand / make (like Shoes,
Khaki drill from reputed manufacturers, Gauges from a reputed manufacturer etc.).
c. If after market survey, there is a single party ready to undertake the risk of provisioning /
development of item required and the value of order is such that it is not economical to develop
alternative sources of supply.
d. The manufacturer / Government has canalised the supply only through a single source.
e. The item is known to be in short supply and its stocks happen to be available only with one
source at the time of purchase.
f. Purchase of items of common use which are available at more or less at standard prices from fair
price shops, super bazars, retail chains.
g. Purchase from Government, PSU, Semi-Government, Co-operative undertakings and Welfare

organizations.
h. Urgent / emergent requirement to meet the immediate needs which cannot be catered within the
required time lines by engaging any other method of procurement.
i. Purchase of standard specification items of small quantities
j. HAL’s Customer has specified in writing the specific item to be purchased from a specific source
and the need has been originated by the customer.
k. Procurement of items from licensor/customer to take advantage of their long term agreement
Pricing with their suppliers/where quantity to be procured is small and less than the minimum
order value or order quantity suppliers willing to supply.
l. Vendors currently approved by HAL even though not developed through limited/open tender
would continue to be included until new source is developed through normal tendering process.
5.9.3 As far as possible offers shall be invited from the manufacturers/their authorised Distributor/stockist
of repute.
5.9.4 Single Tender (Nomination basis)
Single Tender (Nomination) refers to a case where a purchase enquiry is sent to only one source
without calling for tender even though other sources may be available, due to various reasons. Some
of the single tender cases are procurement from Joint Venture companies promoted by HAL, sources
specifically nominated by name by the customer. (If more than one source is nominated by Customers,
limited tender will be followed) and procurement of strategic material from indigenized sources.
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5.9.5 Tender enquires should be sent with the approval of Head of the Division.
The following requirement should be complied for approval of proposals on Single Tender (nomination
basis):
a. Reasons for not resorting to Open/Limited tender to be recorded in writing.
b. Justification to be provided on proposed source for price reasonability.
c. Pre Audit by System Audit for cases exceeding Rs.10 Lakhs each.
d. Quarterly Report on order placed on Single Tender basis be submitted to the Board as per CVC
guidelines.
5.9.6 Items sourced on single tender/ single tender (Nomination basis) are to be reviewed by Division once
in two years to explore additional sources including indigenous development.
5.9.7 Procurement from JV promoted by HAL for supplies covered by the duly approved business plan of
the JV and the same is notified by Corporate Office.
5.10 Spot Tendering
5.10.1 Spot tendering is to be resorted to
i. Meet emergent requirements.
ii. Procure limited quantities of readily available commercial off-the-shelf goods that are not
specifically produced to a particular description and there is an established market Standard
specification items of small value
iii. Procurement of items required for office consumption and shop consumables.
iv. Physical services that are readily available in the market
v. Procurement of goods or services for emergent repairs
5.10.2 A Purchase Committee comprises of officers from the Purchase, Finance and the User Department
accompanied by an Inspection Officer, where necessary, shall proceed to the market and obtain spot
offers from at least three vendors after physically verifying and inspecting the goods The committee
will be required to survey the market to ascertain the reasonableness of rates, quality and specification
& identifying the supplier
5.10.3 Prior approval from Divisional head is required for resorting to purchase through spot tendering
and constitution of the committee. Approval for placement of order will be as per DOP provisions
under limited tender with more than one offer. However, Letter of Intent (LoI) can be issued by the
Committee and the same shall be regularized by issuing confirmatory purchase order with approval
of CFA. Format for Letter of Intent (LoI) is enclosed at Annexure – 29.
5.10.4 The purchase under this tendering is limited to Rupees one lakh on each occasion. However, it is to
be ensured that requirement is not split in any circumstances with the objective of circumventing of
limit of Rs. one lakh.
5.10.5 Procurement on selection basis: Spot tendering procedure can be followed where there are varieties
of makes / Products are available in the market and purchase is required to be made on selection
basis. Office furniture, Consumer Durables, Standard Electronic and Electrical equipments, Goods of
common use, medical equipments are examples of items which would fall under this category. The
committee constituted, after carrying out market survey would obtain spot offer and recommend the
item that meet the requirement. Purchase order will be processed only for the item recommended by
the committee as per the Delegation of power applicable for limited or single tender.
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5.10.6 The purchase under this procurement on selection basis limited to Rupees five lakhs each occasion.
5.11 Procurement from Customer Nominated Source
This mode of single source procurement is resorted to from a specific source nominated by name in
writing by the customer. The following shall be taken care of while resorting to this mode of purchase:
a. Procurement from customer nominated source can be resorted to only in case the purchase
order/contract with the customer provides for such nomination by the customer. The same shall
be regulated in the following manner.
b. Reference of specific part numbers in the contract entered with customer should not be considered
as basis for tendering on single source other than for airborne system.
c. In case of other than airborne system, customer to be consulted for acceptance of equivalent
system / item also so as to resort to competitive mode of tendering. In case the customer still
insists for a particular make, the same may be purchased as a customer nominated procurement.
d. When the customer has amended the contract so as to incorporate a specific item along with
increase in contract price to compensate HAL towards increase in procurement cost included in
the contract due to procurement from single source/brand without competition.
e. In case the nominated vendor quotes unreasonable price / Terms and conditions and does not agree
for reduction and waiving of unreasonable conditions, the division should take up the matter with the
customer for their concurrence to accept price / terms and conditions of the vendor.
f. It should be ensured that the customer nominated source essentially originates from the customer.
g. Procurement from customer nominated single source shall not be classified as proprietary.
h. In absence of specific written request from customer to procure from specific source, competitive
tendering to be followed.
5.12 Two Stage Tendering
Two stage bidding of procurement is considered under the following circumstances:
a. It is not feasible to formulate detailed specifications or identify specific characteristics for the
subject procurement without receiving inputs on technical aspects from vendors
b. Requirement to enter into the contract for the purpose of research, experiment, study or
development
c. The vendor is expected to carry out a detailed survey or investigation and undertake a
comprehensible assessment of risks, costs and obligations associated with procurement.
d. The Two stage bidding shall include the following :
i. In the first stage, the bids are invited containing the technical aspects and contractual terms
and conditions of the proposed procurement without price.
ii. The response received are evaluated through Technical evaluation committee,
iii. The committee may hold discussion by giving equal opportunity to all bidders to participate.
iv. The relevant terms and conditions are modified by addition, amendment or deletion of
any specification of item under procurement or criteria for evaluation without changing the
fundamental nature of the procurement.
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v. In the second stage of bidding process, bids are invited from all those bidders whose bids
are not rejected in the first stage, final bid with bid prices in response to revised set of terms
and conditions
5.13 Sample Selection
5.13.1 Bulk Procurement
For bulk procurement of clothing and other textile items such as uniform, Sweater etc., a committee
needs to be constituted with the approval of Divisional head to collect details about such items
available in the production range of the manufacturers and finalize the generic specifications including
the essential and desirable parameters if so required with the involvement of an independent external
domain expert from Govt. organisation, on need basis. The tendering process may be initiated with
the condition that the successful bidder (s) shall submit advance sample to evaluate the offer in line
with the tender requirements.
5.13.2 Low Volume Procurement
However, for low volume procurement of clothing, office furnishing requirements, decorative items, utility
items, mementos etc, of value Rs.5 lakhs or so, a committee constituted with the approval of Divisional
Head shall make selection of the items based on market survey. Local Purchase Committee may be
assigned the role of sample selection committee also, at discretion of Head of Division. If more than one
sample is selected, price bid for such selected samples will also be collected in the sealed cover. Such
samples/offers collected with the final recommendation will be submitted for processing the proposal.
5.14 Procurement from OEMs, Distributors & Stockist
a) In case of procurement of LRUs/SRUs/Systems/Sub-systems/proprietary item, RFQs to be sent

only to Original Equipment Manufacturer/licensor. To generate interest from the OEMs, long term
requirement based on approved programme/forecast task may be projected with a provision for
staggered annual deliveries. In case procurement of these items through Distributors/Stockist
is unavoidable, necessary verification of credentials of Distributors/Stockist should be made. A
confirmation for the verification be mentioned in the proposal.
b) As regards procurement of raw materials, electronics equipment / components, standard parts

/ tools / tool grips / gauges / test equipment, commercial items (e.g., IT products / accessories,
office equipment, vehicles, furniture, maintenance and other spares), obsolete items etc, where
more than one manufacturer exists, the Divisions shall identify OEM and authorized Distributors
/ Stockist. It can also be ascertained through internet, manufacturers, Industrial, Trade directory,
yellow pages etc., that the distributorship / stockist arrangement is a standard channel for all
such customers and not exclusively for HAL transactions. Further, credentials of Distributor &
Stockist needs to be established. In case of inability to identify OEMs, this needs to be recorded
with justification.
c) The RFQ would be issued to OEM, as far as possible, and Division needs to source from OEMs for
required qty. / or LTBA requirement. However, if the quantity to be ordered is considered as inadequate
for OEM to respond or OEMs do not respond then RFQ could be issued only to authorized Distributors
/ Stockist / approved Vendors, after recording a specific statement to this effect and this should
necessarily form part of the proposal along with their credentials to be put up to CFA.
5.15 Formats for hosting of information with regard to “Administration by leveraging technology” are
placed at Reference-3. In this regard, CO guidelines issued from time to time to be complied.
5.16 It is advised to use only the dedicated E-mail facility of HAL and their official E-mail IDs for all
correspondence with outside parties. IT security guidelines need to be followed.
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5.17 Procurement for Production holdup / Customer’s AOGs requirement :
In case of stock out items resulting in production hold up (to be justified with approval of head of
Division) and/or items are required to meet customer’s AOG requirement, a part qty. as required to
meet this immediate requirement may be purchased on emergent basis with justification (reasons
to be recorded in writing), following Commercial procedures. However, procurement needs to be
expeditiously carried out, and if required by reducing tendering time and MPC meeting may be called,
with the approval Head of Division. If circumstances warrant, single tender may also be resorted to
only for quantity required for immediate production or AOG requirement.
5.18 Development order
In the development order where technical inputs/assistance is provided to the vendors, the Intellectual
Proprietary Rights (IPR) to be retained by HAL. For these items, vendor should not directly deal with
HAL’s customers.
5.19 Telephonic Enquiry: In case of urgency, at the discretion of Head-IMM , where the total value
of an indent does not exceed Rs.30,000, Quote may be obtained & noted telephonically (using
speaker phone) from minimum 3 firms in the presence of members from IMM, Finance & User dept.
Subsequently , hard copy of email/Fax to be obtained and filed.
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CHAPTER - VI
PURCHASE WITHOUT TENDERING
6.1 DGS & D RATE CONTRACT
a. Director General of Supplies and Disposal enters into rate contracts for various items to cater
to the requirement of different Govt. organisations. List of stores on rate / running contract is
published by DGS & D from time to time for the use of Direct Demanding Officers (DDO). This list
is available on DGS&D website (http://dgsnd.gov.in/).
b. It may be mentioned that running contracts are distinct from rate contracts. Running contracts
provide for guaranteed quantity to be supplied by the contractors with an agreed percentage of
variation. These contracts can be operated by DGS & D only.
c. Some of the Public Sector Enterprises are Direct Demanding Officers and can place orders
directly on rate contract terms. All Divisions of HAL are not on the list of DDO. However, many
Rate Contract holding firms are normally offering DGS & D Rate Contract prices to HAL and the
same shall be availed. Orders to be released on the normal HAL purchase order form on DGS
& D Rate Contract prices are as per mutually agreed other commercial terms. When there is
more than one DGS & D Rate Contract for the same item, order can be processed on any one
of the vendor based on the recommendation of the user department taking into consideration
parameters like availability of service centers, past experience with the OEM, standardization,
quality etc.
d. Where a firm is not ready to offer DGS & D Rate Contract prices to HAL, these prices may be
utilised for negotiation purpose while finalising the Purchase Order.
e. In case the items of required specification if available under DGS&D Rate contract like IT Hard ware,
Material Handling Equipments, Medical Equipments etc., tendering action to be considered only after
recording the justifiable reasons for not considering the procurement through DGS&D Rate Contract.
6.2 Purchase of standard specification items and items (non-capital) of common use: (procured
by common people and industries) which are available at more or less at standard prices from fair
price shops, super bazars, retail chains, Government, Semi-Government, Co-operative undertakings,
Khadi village industries commission, handloom units of association of cooperation and Apex Society
of handloom (ACASH), welfare organization not exceeding a value of Rs. One lakh limited to annual
ceiling of Rs.5 lakhs per division/office.
6.3 Purchase without tendering will also be applicable for procurement of news papers, journals, books,
magazines, periodicals etc.
6.4. HAL Rate Contract
6.4.1 HAL Corporate Office also enters into Rate Contracts for items which are commonly used in different
Divisions of HAL. The advantages of this arrangement are:
a. Supplier is assured of expected volume of business and hence can offer better prices.
b. HAL is assured of continuous supply as per requirement.
c. Assurance of sustained quality supplies.
d. Effective controls on inventory buildup.
e. Purchasing cost is kept low.
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6.4.2 In respect of stock items for which HAL Corporate Office has not finalised Rate Contracts, Divisions
shall enter into Rate Contract for as many items as possible. A copy of Rate Contract entered at
the Division level shall be sent to the IMM at Corporate Office for the benefit of other Divisions for
reference only. Suggested draft format for entering into Rate Contract is enclosed at Annexure-15.
6.4.3 Except in case of purchase of production items from already approved/ proprietary/ developed
sources and where License Agreements/ Long Term Contracts are in force, Rate / Running Contracts
or other long supply agreements should be entered with reliable and established sources of supply
after obtaining competitive offers through Open Tender/limited tender. Where Rate / running Contracts
are entered into, based on single response to open/limited tender, report of such contracts should be
made to the next higher authority.
6.4.4 The rate contract entered into by one Division /Corporate office for their requirement cannot be utilized
by other division for placement of order. However the division which has entered into a rate contract
can place order on behalf of other division on emergent requirements within total qty. entered by the
Division.
6.5 HAL Licence Agreements
At the time of finalisation of licence agreements Purchase Agreements are also entered which enable
HAL to procure its requirements without calling for offers. The Purchase Agreement is valid for the
period of main Licence Agreement and an agreed escalation clause governs the prices applicable on
supplies to HAL.
6.6 Repeat Order
6.6.1 In this case also fresh tenders are not invited. Repeat Order refers to Purchase Order placed on the
previous supplier (without obtaining fresh quotations) for the same items which were ordered on the
firm as a result of Open / Limited Tender. Repeat Order may be placed up to 100% of the value of the
original order after placement of the original order, but within 12 months from the date of completion
of the original order unless, in the mean time, further market research has disclosed a cheaper source
of supply. The prices, terms and conditions of the repeat order shall be the same as that of the original
order. No price negotiation shall be held. Repeat order can be placed with the approval of the next
higher level CFA. No Repeat order where qty is one in original order. However, the statutory levies
shall be paid as applicable.
6.6.2 Repeat order (single order or multiple orders totaling to 100% value of the original order) may be
placed by other Division of HAL including the Division which has originally placed purchase order. In
order to exercise the control on the total value, the repeat order should be coordinated by the Division
who originally placed order to ensure sum total of value does not exceed 100% of original order.
6.7 Imprest Purchase System
The Department authorized for imprest cash shall arrange for cash purchase in case of urgency as
well as other items/services of low value. Here again no formal offers are invited. The indenting officer
is authorised to record reasonableness of rates and approve the purchase. The value of each item will
not exceed Rs.5000 for each case for this type of purchases. Purchase -cum-receiving report format
Annexure-16 is to be used. Imprest cash should be kept in locked cash box kept in the office and
entry should be made in the imprest register before drawal of cash for procurement/availing service.
Annual ceiling for imprest amount should be prescribed for each imprest holder, and notified by the
Division with the approval of head of division/office.
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6.8 Petty Purchases
Items / services of nominal value i.e. up to Rs. 15000 in each case can be indented and procured by
various departments. This request shall be approved as per DoP Purchase up to a value Rs.15000
could be made directly from the market without issuing a formal order. Receipt of such materials will
be certified by the user department on the Cash Memo for accounting purpose. No receiving report
shall be raised and the value shall be charged off as expense under appropriate head. Petty Purchase
Request – Annexure-10 is to be used.
6.9 Order on Ancillaries
Ancillaries, which have entered into formal agreement with HAL for rates and volume of business for
a certain period, shall be issued with orders without inviting offers subject to the ancillary meeting the
quality and delivery requirements.
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CHAPTER - VII
TENDER RECEIPT, OPENING AND EVALUATION
7.1 Proper care in the receipt, opening and sorting out of tenders is essential to avoid any suggestion or
malpractice. The instructions to the suppliers for submitting their tenders should be comprehensive
and clear. Suppliers shall be notified to submit tenders in sealed covers superscribed with Tender
Number and Due Date etc.
7.1.2 E-Tendering to be adopted as per company guidelines.
7.2 Tender Box
7.2.1 A locked and sealed Tender Box must be maintained in a prominent place for all tenders received
against other than Proprietary/single tender enquiry. Tenders received by Post up to the prescribed
closing date and time for the tender shall essentially be dropped into the Tender Box. This procedure
is not applicable for the tenders issued through e-portal.
7.2.2 Individuals bringing tenders in person should be directed to drop them in the Tender Box.
7.2.3 Receipt of Tender
Unsealed tenders or tenders received without any marking on them or through Fax/ E-mail which get
opened like other incoming mail shall be sealed by the Office of the Head of IMM Department and the
same shall be put in the tender box maintained for the purpose. An endorsement on the cover shall be
made that tender was received without marking and got opened in the mail. The original cover of the
tender is to be preserved as far as possible. Receipt of unsigned quotations including E-Mail should
not be considered. E-mail quotations digitally signed can be considered. E-mail quotation without
digital signature received from Licensor, Licensors approved sources/customer nominated sources
can be considered. Further, e-mail quotations without digital signature received from sources on
proprietary/single tender can also be considered.
The procedure for receiving the quotation through Fax/E-mail shall be followed as per existing Circular
dtd.10.11.2008 (Reference No.5 of Purchase Manual).
7.2.4 Incase the bid documents are bulky then the name & designation of two officers either of them can
receive the bid is to be mentioned in the tender document.
7.3 Opening of Tenders
7.3.1 All tenders must be opened by Tender opening Committee at the specified place on the date and time
specified for their opening.
7.3.2 Tender Box shall be opened by the Tender opening Committee. Only tenders due on that date shall be
taken out and Tender Box shall be sealed thereafter. The tender envelopes shall be initialed by them
and handed over to Tender cell, who shall enter the same in a register maintained for the purpose
7.3.3 The tender opening Committee is required to ensure the following:
a) Each page of the offer shall be initialed, dated and numbered indicating the Serial Number of the
Tender vis-à-vis the total number of tenders.
b) Any alterations in rates, additions, deletions, cutting and overwriting shall be encircled, initialed
and the same should be recorded in first page in Red ink including any other observation/
deficiencies observed if any.
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c) Glaring abnormalities like striking similarities in text/language format, contents etc., from different
sources/firms should be recorded. Their admissibility or otherwise should be decided by due
diligence by PC/MPC. The decision of PC/MPC is final.
d) Blank space, if any, is to be crossed out and initialed.
e) All envelopes of tenders shall be initialed and shall carry the same markings as on the tender
papers.
f) Bidders or their representative (along with authorization letter from their OEM) who submit
tenders are permitted to witness the tender opening. A record of the tenderers / representative
present at the tender opening should be maintained. The officer opening the tender shall read
out the important particulars regarding quality, price, etc., and shall prepare an abstract of the
tenders received. Offers received should not, repeat not, be circulated amongst the bidders or
their representatives present. No explanation should be sought from representative of bidders
during opening of Tender.
g) No amendments to the tenders shall on any account be permitted after the due date of submission
of tender.
h) Receipt of unsigned quotations to be dealt with as per para-7.2.3.
i) If a single offer received against Limited / Open tender, the bid should not be opened at first
instance and the same should be referred to Purchase department for necessary decision. If
decided to re-tender, the bid should not be opened and same should be returned.
j) Proper Record of EMD, Integrity Pact, Authentication / Authorisation letters need to be made. On
the spot consolidated statement of tenders received, opened is to be prepared and signed by the
tender opening committee.
k) Further, in case of ‘Two bid’ system, after opening of the technical bids, the price bids, which are
to be opened subsequently, will not be kept as loose envelopes. It is to be ensured that the tender
opening officer/ committee has signed on the envelopes and the envelopes are placed in a bigger
envelope/ box duly sealed and signed by the tender opening officer/ committee.
7.3.4 Offers received against Proprietary Tender or tender issued to a single party may be opened before
the due date at the discretion of Head of IMM.
7.3.5 Tender opening Committee shall not open unsolicited tenders. Unsolicited Tender is defined at
Para-7.5.
7.3.6 In two bid system, only the technical bid should be opened in the first instance. Purchase department
would scrutinize the bids for their acceptability in respect of conformance to signing of Integrity
pact, receipt of EMD etc., before forwarding the bids for technical evaluation. If bids are not meeting
the tender conditions like EMD, signing of IP, unsolicited bids, unsigned quotes will be rejected and
returned to the vendor with the reasons for such returning along with the other not qualified bids as
indicated at para 5.3.2. Commercial bids of only technically acceptable offers should be opened only
after the evaluation of technical bids and recommendation of TEC. The commercial bids of other
offers which are not found to comply with technical requirements will be returned to vendors in sealed
and unopened condition as received.
7.3.7 In case of the quotations in the two bid system, if party is submitting only one bid with rates and
technical details / Technical and commercial bids in open condition inside one envelope only shall
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not be considered. Further, in case of two bid system, if bidder submits price bid / indicate pricing
aspects in technical bid either in manual tender or in the e-tender, the bid will not be considered for
evaluation and will be rejected.
7.3.8 Members of the tender opening committee to give an undertaking that none of them have any
personal interest in the vendors participating in the tender process. Any member having interest in
any Company represented by the vendor should refrain from participating in the tender opening.
7.4 Tender Opening Register
Tender Opening Register shall be maintained in the Tender Cell. Tender No., type of tender, name of
tenderers - whose tenders have been opened and signature of the tender opening authority shall be
recorded in the register. Signatures of tenderers / authorized representative present at the time of
tender opening shall also be obtained on the same page. Concerned dealing Purchase Officer shall
sign while receiving the tender offers for further processing.
7.5 Unsolicited Tender:
Offers submitted by vendors to whom tender enquiries were not issued. However in case of Limited
tender enquiry issued to registered vendors, a tender received from the authorized dealer/ distributor/
channel partner of the registered manufacturer along with authorization letter of the manufacturer
to whom the enquiry was originally issued shall not be declared as unsolicited. Response received
from branch offices/marketing offices/different divisions/subsidiary of the same company to whom
tender issued is not to be declared as unsolicited. Such Tenders will be considered with the approval
of Head of IMM.
7.6 Late Tender
7.6.1 Any tender received after the prescribed date and time shall be marked as late tender.
7.6.2 Any bid received by the Company after the due date specified in tender/RFQ must be kept intact,
un-opened/sealed and not considered. The same will be retained in the concerned purchase file.
Quotations/ bids, which are received late through Fax, shall also be treated in the same manner.
7.6.3 In case, the tender is against “Single Tender” enquiry (Proprietary/Customer nominated), a late tender
may be considered after obtaining the approval of Head of Division.
7.7 Postponement of Due Date
7.7.1 In case of Open/Limited Tenders due date shall not be postponed normally. However, in case of
change in the tender terms & conditions, specifications or tender opening date etc. is to be notified
to all the bidders and posted on web site (in case the original tender was also published on web site)
sufficiently in advance (minimum 3 working days).
7.7.2 In respect of complex procurements, development programmes, refurbishing of equipments etc

opportunity to be given to vendors to seek clarification in respect of tender documents. The period
within which the vendor can seek clarification should be specified in the tender document. A pre-bid
conference may be arranged for potential bidders to seek clarification.
7.7.3 In the event of a query from any vendor requiring clarification, the clarification if it is applicable to be
issued to all the vendors to whom the tender was floated. At this stage if it is considered that available
time to respond is in adequate, the due date can be suitably extended.
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7.7.4 The due date can also be extended, if so requested by any of the bidders, with justifiable grounds.
Any bidder who has submitted his bid in response to the original invitation will have the opportunity to
re-modify or resubmit as the case may be. In that case the last bid submitted or the bid as modified
by the bidder will be considered for evaluation.
7.7.5 The postponement/extension of due date shall be made after approval from Head of Division.
7.8 Authority for Tender Opening
7.8.1 Tender opening officers/committee shall be as follows :
Tender Value
a) Up to Rs 15 lakhs - Dy. Manager (IMM) & Dy. Manager (Fin).
b) Above Rs 15 Lakhs - Manager & above each from IMM & Finance
7.8.2 “Head of Division may authorise other officers of lower or higher grade for tender committee in
coordination with Head of IMM and Finance where manpower of requisite grades are not available”.
7.9 Tender Evaluation
7.9.1 Initiating Tender evaluation process (Either single bid or two bids) is the responsibility of the Purchase
Department and shall be given due priority and care.
7.9.2 The Purchase Department shall study offers and prepare a statement for endorsing the offers that are
prima facie suitable (that is the offer was received in time and is not unsolicited, offer is accompanied
with IP signed wherever applicable or qualified offer and the offer is accompanied by Earnest Money
Deposit if required, as per the Tender Conditions). The file then is to be passed to Technical Evaluation
Committee/ Production Engineering / Material Planning / User Department for the further study and
their recommendations.
7.9.3 Technical Evaluation (Single Bid) : In case of single bid tender, the technical evaluation and
recommendation / acceptance of the offered items/materials in the quote shall be carried out by
Material Planning/Production Engg./users deptt/facilities planning as applicable duly coordinated by
officer authorized (as case may be) and approved by Group Head before preparation comparative
statement. In case of 2 Bid System, the technical evaluation and recommendation / acceptance shall
be carried out by TEC.
7.9.4 Technical Evaluation Committee (Two bid System)
Technical Evaluation Committee shall be constituted as follows:
a. In case of CFA for approval of the proposal is Board/ Procurement Sub-Committee/ CH/ MD/
Director, the Technical evaluation committee shall be headed by Head of Division with following
members
Head of Production Planning Deptt.
Head of Quality Department
Head of User Department
b. In case of sanction by Procurement Sub-Committee & Board, Head of Corporate Planning or his
representative will be a member of Technical Committee in addition to above.
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c. In case of CFA for approval of the proposal is Head of Division, the Technical evaluation committee
shall be headed by ‘the Senior most Executive of the Division (AGM/DGM) in the Technical
Discipline with following members
Representative of Production Planning Deptt.
Representative of Quality Department
Representative of User Department
To be nominated by the respective Head of Departments.
d. The Head of Technical Committee may co-opt other members from within &/or outside Divisions
based on expertise required.
e. In case of CFA being level II and level III Officers (as defined in DoP), TEC may be constituted with
the approval of Head of Division on need basis.
7.9.5 If so required for technical evaluation, clarification on technical aspects shall be sought from the
bidders only once consolidating all the requirements as far as possible. If response is incomplete
further clarification can be sought. Any new clarification not originally covered will require approval of
divisional Head.
7.9.6 In case where vendors offer in their quote some alternate material / items against RFQ requirement,
technical acceptance for such material / items needs to be carried out by Design Department (DLE)
/ Design Authority and Methods engineering in case of Project Material rather than user department,
and in case of Non-project Material / Commercial Material technical acceptance shall be by User
Department / Indenting Department or TEC if so desired by users / indenting dept.
7.9.7 The Technical Evaluation Committee’s report in the existing Purchase proposal format shall bring out
in detail compliance report of each technical feature of the RFQ, deviations if any, and the reasons
for acceptance/ rejection of bids and should be signed by all members of the Committee. The
report shall bring out acceptance or otherwise of the bids without any ambiguity and make clear
recommendations.
7.9.8 Technical evaluation compliance report should be signed by all the members of the Technical
Evaluation Committee after due verification of bid documents submitted by the bidders as per the
eligibility criteria laid down in the tender.
a. Relaxation of eligibility /prequalification criteria should be avoided.
b. Technical clarification required from the bidders during technical evaluation should be sought
through Purchase Department
c. Introduction of new parameters which has not been indicated in the tender for evaluation is not
accepted.
d. Post tender changes in the technical specification are not acceptable. In case change in
specification is required then the same needs to be justified and retendering action may be taken
e. Selection of optional items and accessories to be finalized before opening the commercial bid.
7.9.9 Commercial Evaluation: Following points shall be paid special attention while compiling information
on the tender evaluation sheet:
i. The offer was received in time and is not an unsolicited or qualified offer and the offer is
accompanied by Earnest Money Deposit/Integrity Pact if required, as per the Tender Conditions.
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ii. Basic price and the quantities for which it is valid. Also whether the price if firm and/ or any
escalation formula is offered. In respect of RFQ covering more than one year requirement, RFQ
may include a clause for escalation formula with CAP. The evaluation is to be made with escalation
CAP quoted by the vendor. This aspect of evaluation to be spelt out in the RFQ to bring clarity
and transparency.
iii. Sales Tax, Customs Duty, Excise Duty, Services Tax, Withholding tax, R&D Cess and any other
imposts / taxes that are payable.
iv. Terms of delivery i.e. ex-factory, HAL stores and other terms and conditions.
v. Packing and Forwarding charges.
vi. Firm’s willingness to accept penalties / compensation for late delivery as well as HAL’s Standard
Conditions of Contract.
vii. Specifications offered are the same as demanded / alternative offered and benefits claimed for it.
Tender not meeting the laid down specifications may not be ranked in consultation with Technical
Department.
viii. The terms of payment and request for advance payments / willingness to offer Bank Guarantee.
ix. Assurance / Methods to replace defective supplies.
x. After - sales - service arrangement and cost of such services, if any.
xi. Samples if required are submitted with the offer or alternatively party agrees to submit samples
as required in the enquiry.
xii Validity period is adequate. In case of vendor offering validity period less than what has been
sought in the tender the same can be accepted subject to the following :
a) If the criteria for evaluation is lowest price conforming to the specification and
b) The validity period is adequate to process the tender.
If conformance to validity period sought by HAL is a criterion for evaluation of tender then the
same need to be specified in RFQ and the tenders not conforming to the requirement can be
rejected.
xiii. Due price preference to Public Sector Undertakings, Ancillaries, Small scale Industries and
Indigenous manufacturers as per Govt. Directives, issued from time to time.
xiv. Foreign currency exchange rate as on date of bid opening stipulated in RFQ shall be considered
for comparative price statement in Commercial evaluation. This aspect should be indicated in the
RFQ. TT Selling rate to be considered for foreign currency exchange rate.
xv. In respect of responses from foreign and indigenous sources, the evaluation should be based on
landed cost at the Division by including freight charges, applicable taxes, and duties to the base
price quoted by the vendors.
xvi. Prices and applicable taxes indicated in the price bid shall only be considered.
xvii. In case, RFQ call for evaluation of Bids using discounted cash flow method (DCF), net present
value to be calculated for arriving L1 vendor.
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xviii. The percentage of freight & insurance to be adopted shall be based on the ‘percentage of
total freight & insurance paid to purchases during the preceding year’. This percentage will be
forwarded by the Divisional Finance to the IMM department of the Division and shall be applicable
during the year for the evaluation purpose. These rates shall be announced once in a year in first
week of financial year.
7.9.10 Taking into consideration the above factors, a net price comparison of the valid tenders only shall
be prepared and tender evaluation sheet(s) shall be endorsed L1, L2, L3 etc., to indicate 1st lowest,
2nd lowest, 3rd lowest and so forth. In this tender evaluation statement, the tenders which are not
meeting technical specification and where the tender formalities have not been complied with, and
which were received late / delayed shall not be included.
7.9.11 An endorsement with reasons for non - consideration / non - inclusion of parties shall be separately
made on the comparative price statement.
7.9.12 The Commercial Evaluation Statement shall be signed by the dealing officer and shall be vetted and
countersigned by the next higher officer of the Purchase Department and it should also be checked
and signed by Finance. The CFA is CMD or above, the same needs to be countersigned by head of
IMM and Finance.
7.9.13 Timely evaluation of bids within bids validity period shall be carried out in equitable, fair and transparent
manner.
7.10 Tender Evaluation of Capital Equipment
7.10.1 Following procedure shall be followed for procurement of Capital Equipment:
a) A Divisional Technical Committee (TC) is to be institutionalized which will be responsible for

preparing, finalizing and approving the Technical Specifications of the Equipment. The committee
is to be headed by Head of the planning functions of the Division and supported by the Head
of Plant maintenance, Head of Quality and Head of Planning / Facility Planning who will be the
secretary of the committee. Head/Deputy Head of the user department will be the co opted
member. All capital items which require custom specification and cannot be sourced through
standard specifications are to be finalized through Divisional Technical Committee.
b) The Divisional TC should prepare a general brief on the scope of requirements. Initially, if so
required, this should be sent by the TC to the various leading manufacturers of the equipment
asking for detailed technical specifications/ features of their products to meet the requirements
as a Request for Information (RFI). This data along with information available in the division /
other divisions will form the basis for preparing the detailed specification of equipment. While
approving the same, the TC should clearly identify the Essential and Desirable parameters of the
equipment as detailed below.
c) Essential. These are the Essential requirements in the performance of the equipment, non-
compliance of which will make the equipment technically not suitable. Accordingly the ‘essential’
classification to a requirement must result from an in-depth critical analysis of the necessity of
requirement.
d) Desirable. All parameters other than essential will be classified as ‘desirable’. This classification
should be assigned to requirements corresponding to tasks that the machine is intended to fulfill
but the same will however not affect the safety or functional performance in any way. The non-
compliance of a requirement classified as `desirable’ is in itself not a sufficient reason to reject the
tender.
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e) The classifications of essential and desirable as above should be as per the recommendation of
TC with reference to Technical Specifications whereas the same in respect of commercial terms
and conditions should be as per the recommendation of Purchase Department and should be
mentioned in the RFQ in clear terms indicating that the “offers not meeting essential requirements
shall not be considered”.
f) As such, the responsibility of approving the specification on the above lines rests with the TC.
7.10.2 On receipt of Technical Compliance Report from Bidders, The file is to be passed to TEC/ Production
Engineering / User Department for the further study and Technical acceptance of offers. The TEC
shall also carry out selection of accessories, special tooling, and maintenance requirements and
spares, special civil works etc., if any, needed, in respect of technically acceptable offers. Some of
the essential factors which shall be taken into consideration are:
a) Estimated operation cost, maintenance cost, and the total cost over the probable life of equipment.
b) availability of service at the initial stage and regular after - sales - service
c) availability of spares on ex-stock basis or delivery at short notice
d) financial considerations including Foreign Exchange
e) the existence of similar - make machines in service
f) training of operators in case of special - purpose machine.
7.10.3 The concerned Purchase Officer shall make a note of specific points on which TEC/ Production
Engineering/ user’s comments are sought.
7.10.4 After technical study, a final price comparative statement shall be prepared in co-ordination with the
TEC/ Production Engineering/ User Department to arrive at the ultimate price.
7.11 Tender Evaluation for selection of Systems for Aircraft/ Helicopters/Accessories
The following procedure is to be followed for selection of any system.
a. RFQ for the system should clearly bring out the anticipated quantity and the period of requirement
in addition to all other technical and commercial requirements.
b. Quotes should be obtained for the prototypes and also for the subsequent series production
requirements linked to an escalation formula based on recognized price indices.
c. In case the quantity required is high, ToT for manufacture is to be sought. This aspect is to be
decided before issue of RFQ based on the product and the likely investments required considering
the technology. In case of strategic technologies, ToT is to be insisted upon, in case of foreign
Vendors.
d. In all cases, RFQ should specify the essential need for ToT for ROH in India. Quotes for the
licence fee/ documentation cost/ Royalty is to be obtained along with the cost of facilities for
ROH.
e. Suppliers’ commitment for technical assistance in setting up manufacturing / overhaul facilities is

to be insisted upon.
f. Supplier has to confirm that he would undertake defect investigation and repair/ overhaul, till
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the facilities are set up in India. Cost of DI/ROH is also to be quoted in his offer; with escalation
formula similar to equipment supplies.
g. The supplier has to confirm uninterrupted supply of spares for lifetime product support. List and
norms of consumption of spares with their individual prices are to be quoted in his offer. In case
of Standard Price Catalogues, copy of the same is to be attached.
h. The lead-time for supply of spares is to be clearly defined to ensure timely procurement action
i. The supplier has to confirm that any documents pertaining to up-gradation of the system during
its course of exploitation will be forwarded
j. In the event of the supplier not meeting the product support requirements, his offer is to be
considered as technically invalid
k. The proposal will be evaluated on Life Cycle Cost basis
7.12 Comparative Price Statement
Utmost care shall be exercised while preparing the Comparative Price Statement of tenders. Any
deviations from the tendered specification, delivery period or normal terms and conditions and
any special conditions, assistance etc., stipulated by the firm, shall be highlighted. It shall be the
responsibility of the concerned Purchase Officer to ensure prompt preparation of price statements
as well as finalisation of the tender papers. The statement shall be signed by Head of IMM & Head
of Finance where CFA is CEO/Director/ CMD/ PSC/ Board; and by respective officers as designated
by IMM & Finance Heads in other cases. Format as per Purchase Proposal Format at Encl-2
Annexure 21B shall be used for this.
7.13 Correspondence with Vendors:
Indenting departments should not carry out any correspondence with suppliers. While Methods
Engg. / Facility Planning, responsible for preparing specifications etc may correspond with various
manufacturers to firm up their specifications, once a demand has been raised and sent to IMM
for processing for any item/ equipment, all correspondence with Vendor/s, whether on technical
or commercial points, has to be carried out only by IMM Deptt. It is to be ensured while seeking
commercial clarification if any, there is no change in the price and L1 status.
7.14 Acceptance of Tenders
7.14.1 A bid is considered as successful
a. when price is the only criteria, the bid with the lowest price conforming to the specifications
b. When there are price and other award criteria, the most advantageous bid ascertained on the
basis of criteria and procedure for evaluating bids as specified in the tender documents
c. Where there are no financial criteria, the most advantageous bid ascertained on the basis of
selected non-financial criteria or other parameters for evaluating bids as specified in the tender
documents.
7.14.2 Special care shall be taken to ensure proper scrutiny in the matter of financial soundness and technical
capability of the firm. When, for valid reasons, it is necessary to accept a tender other than the lowest,
the reason for overlooking the lowest offer must be clearly recorded in the file.
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7.14.3 Tenderers offering competitive prices but not accepting some of HAL’s standard tender conditions
such as credit terms, penalty for delayed delivery, etc., may be accepted on merits by appropriate
authorities delegated with Purchase Powers.
7.14.4 As a matter of policy, the technically acceptable lowest offer shall be accepted. Lowest technically
acceptable offer with variance in tender terms and conditions such as credit terms, delivery, penalty
for late delivery etc. may be accepted on merits with the approval of CFA, after required loading
towards such factors having direct financial impact in comparative price statement. In the normal
course deviations from conditions such as SD/PBG shall not be agreed upon. The interest rate to be
adopted in such cases shall be notified by Treasury wing of Finance Department of Corporate office
during March of the preceding year for the succeeding year. If the case is under negotiation, the
committee shall give its recommendation as to the acceptance or otherwise of the deviations.
7.14.5 Quantity Distribution when L1 has not offered tendered quantity
In case, the L1 vendor has not offered full quantity, the L1 vendor may be asked to confirm supply of
full quantity and the quantity so confirmed shall be ordered on L1 vendor. The balance quantity can
be ordered on the next higher responsive bidder at the rates offered by the L1 vendor.
If the full quantity is still not covered at L1 price, the balance quantity can either be re-tendered or
cancelled with the approval of the competent authority as per DOP.
7.14.6 In case in the interest of securing continuity of supplies, it is so decided to split the orders on more
than one vendor, a condition to this effect shall be stipulated in the RFQ specifying the basis of
distribution of quantity provided bidders other than L1 agree to match up with L1 price. The basis
for distribution shall be pre decided based on descending order with L1 getting highest share. The
distribution pattern may be decided locally by the division. The illustrative distribution pattern among
the vendors is indicated below
i) among two vendors: 70:30
ii) among three vendors : 60:25:15
7.14.7 Minimum Order Quantity: In case some of the bidders offer MOQ higher than the RFQ quantity for
any item then the following to be considered;
a If the MOQ offered results in excess qty. less than or equal to 20% of tender qty. then L-1 to
be determined based on the unit price in respect of tenders for single item.
b. If the MOQ offered results in excess qty. more than 20% of tender qty. and the tender is for
more than one item then the L-1 shall be determined by making comparison of the total price
(MOQ x unit price) with the total price of other bidders for RFQ quantity separately for each line
item. However, the division may suitably take up the matter with the vendor for relaxation in MOQ.
If not agreed by vendor, the division shall go ahead in purchasing the quantity as per MOQ and
make adequate efforts for utilization of the items including the shelf life item before life expiry.
c. In case MOQ offered by the vendors for an item is a combination of less than 20% and more than
20%, then the evaluation of the bids to be done based on total price as per (b) above.
7.14.8 In case of bidder insisting on minimum order value against RFQ requirement, the offer of L1 vendor
for those items to be compared with other vendors. If the total cost impact of placing the orders on
other vendors is less than the minimum order value as specified by the L1, the orders for those items
may be placed on other vendors suitably.
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7.14.9 In a situation where two or more bids are same in figures along with other terms & conditions of the
RFQ, an opportunity shall be given to the bidders for making a revised offer in a sealed envelope and
shall be opened by the tender opening committee on a fixed day in presence of the tenderers/their
representatives. In the event of tenderers not agreeing to revise their bids or become same again in
all respect including price, order can be placed on any one of such vendors.
7.14.10 In a limited tender for procurement of Goods, if at the TEC stage, only one vendor is found complying
with all the RFQ parameters and TEC after review of the single vendor situation, comes to the
conclusion that the specification tendered in the original RFQ is the essential requirement and it
cannot be reformulated, the reasons for the same should be recorded by the TEC. In these cases,
approval of Level-I Executive should be taken (before opening the commercial bid in case of two bid
system) for processing the case for approval of CFA as per DOP.
7.14.11 A review of the procurement would also be carried out by the TEC who derives the causes of such
single vender situation at TEC stage and details should be brought out in its report.
7.14.12 TEC for evaluation of single bid tender is as per para 7.9.3 and in case of two bid system as per para 7.9.4.
7.14.13 On acceptance of a single offer in response to open/limited tender, reasons for single offer are to be
analysed and recorded in the proposal for perusal of CFA. The single offer cases exceeding Rs. 1
crore each are required to be pre audited by Systems Audit.
7.15 Validity Extension
All efforts should be made to finalise and place the Purchase Order within the validity period of
the quote received from the vendor. Cases requiring extension of validity should be rare. And in
exceptional situations where the validity period is sought to be extended, it should be imperative to
bring on record in real time, valid and logical grounds, justifying extension of the said validity.
In case validity extension is required, the same should be sought from the vendor before expiry of the
quotes (preferably 3 days in advance). In case of two bid system, price bid of technically accepted
offer should be opened for the offers having validity. Proposals put up for CFA’s approval should have
validity till approval is obtained.
7.16 Price Preference - Public Sector Undertakings, Ancillaries, Small Scale Industries and
Indigenous Manufacturers
7.16.1 Government directives, issued from time to time, lay down policies regarding price preference to be
given to Purchases from Public Sector Undertakings, Ancillaries, Small Scale Industries and Indigenous
Manufacturers and these shall be taken note of while carrying out price comparisons. Where price
preference to be given exceeds the prescribed limits in force, prior approval of CMD shall be obtained.
7.16.2 In respect of MSME Govt. Policy is placed at Annexure-17 and shall be applicable as amended from
time to time.
7.17 Negotiations
7.17.1 There should not be any negotiations, where there has been competitive bidding. Negotiations, if at
all, shall be held with L-1 only. Counter offers tantamount to negotiations and should be treated at par
with negotiations.
7.17.2 Negotiations can be recommended in exceptional circumstances only after due application of mind
and recording valid, logical reasons justifying negotiations. The negotiations should not unnecessarily
delay the award of work/ contract.
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7.17.3 Negotiations may be resorted to, to arrive at a fair price in the case of purchase of Licensed / Transfer
of Technology (ToT) / OEM / proprietary articles or where tendering has evoked limited response or
where the items to be purchased are such that there is only one or two established sources of supply
and where the parties appear to have over - quoted.
7.17.4 Procedure for Holding Price Negotiation with Vendor shall be as prescribed in DoP. PNC chairman
may decide for mode of negotiation i.e. teleconference, video conference, meeting across the
table. Record of discussion / PNC minutes to be kept in file after getting signature of both parties.
PNC recommendation should be prepared & coordinated by the members of PNC and approval of
Chairman of PNC should be taken within a maximum period of one week of completion of PNC and the
proposals for placement of orders are to be initiated only after finalization of PNC recommendation.
7.17.5 MIS information on negotiation, which are in progress for more than 3 months with indication of no.
of discussions / rounds held, to be forwarded to CO-IMM for putting up to Management.
7.17.6 Price reduction taken up through correspondence shall not be treated as negotiation.
7.18 Re-Tendering
7.18.1 Re - tendering is not to be resorted to in the normal course. However, re-tendering shall be considered
in the following exceptional cases:
a. When the prices are considered high taking into consideration of quantity, Industrial price
escalation, Obsolescence, Nature of Item, Value of the proposal etc., in comparison to assessed
reasonable prices even after receipt of at least 3 offers and the negotiation has not resulted in
desired outcome.
b. When it is suspected that there is a ring / cartelization existing and price have been manipulated.
c. Material change in the basic specification has been introduced after receipt of tenders. The re-
tendering in such a case should be resorted to only after recording detailed reasons for post
tender change in specifications and obtaining the approval of Head of Division.
d. In situation where after opening of commercial bids, evaluation of tenders become difficult due to
insufficient information available to objectively evaluate commercial bid.
e. None of the offers meet the desired specifications.
f. The L1 bidder withdraws the offer or fails to execute the order or do not agree for extension of
validity when it becomes necessary.
g. When there is a sudden slump in the market.
h. No quote received from the bidder
i. In case, after review, TEC comes to the conclusion that original specification can be reformulated
to avoid a single vendor situation, the same should be recorded and fresh RFQ either Limited
Tender / Open Tender based on the merits of the case should be issued with the approval of Level
I Executive.
7.18.2 The enquiry on Re-tendering shall not be floated to the L-1 bidder of the previous tendering in case
the L1 bidder withdraws the offer within validity or fails to execute the order, and also appropriate
action, if required, to be taken.
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7.18.3 Re-tendering when resorted to shall be only after obtaining the approval of Head of Division when
CFA for purchase is GM or below In case where Board/PSC/CMD/CEO is the authority for approving
purchases as per DoP, approval of concerned CEO shall be obtained for re-tendering, except in case
of para 7.18.1 (i) above. In case of stock out resulting in production hold up, a part quantity may be
purchased on an emergent basis with justifications (reasons to be recorded in writing) after approval
of authority that is authorized for approval of re-tendering. In such cases, quantity for re-tendering to
be correspondingly reduced.
7.18.4 In case of change of mode of tendering, proper justification needs to be brought out clearly at the
time of seeking re-tendering approval.
7.18.5 Upon approval for re-tender, proceedings of previous tender are treated as closed and refund of
EMDs if any, shall be done to the bidders.
7.19 Time frame for Processing
Each Purchase Proposal being unique, time frame for processing would vary depending upon the
type of proposal, Number of items involved, Category of the item in the proposal and Number of
proposal which are under processing. The time frame for processing should ensure that all efforts are
made to place the Purchase Order within the validity of the offer. However, for guidance indicative
time frame is placed at Annexure-18.
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CHAPTER - VIII
PURCHASE PROPOSAL, ORDER AND ORDER AMENDMENTS
8.1 Purchase Approval
8.1.1 A purchase proposal for approval shall be comprehensive and self-contained. A standard proforma,
as under, shall be used for putting up purchase proposals separately for Project Materials, Non-
project Materials and Capital Items.
• Purchase Format A (Annexure-19)
– For procurement of Project Materials.
• Purchase Format B (Annexure-20)
– For procurement of Non-project Materials.
• Purchase Format C (Annexure-21)
– For procurement of Capital Items.
8.1.2 Guidelines for filling up these formats are endorsed in italics in the format. The dealing officer will
ensure that all the points are answered clearly without any ambiguity.
8.1.3 The Divisions, while putting up the proposal for Head of Division’s approval need to indicate only the
routing of the Division and for obtaining the approval of CEO/Corp. Office, necessary routing can be
added accordingly. (Refer Page 2 of the formats).
8.1.4 While in the Divisions the format/proposal can be put up along with the file, for obtaining the approval
of Complex/Corp. Office, only the format along with the necessary minimum enclosures as under are
required to be forwarded:
• Technical Evaluation Statement
• Comparative Statement of Prices
• Commercial Evaluation Statement
• Price justification
• Agenda / points for negotiation
• PNC Recommendation
• Draft Agreement wherever required
8.1.5 On approval of the proposal, one copy of the proposal with necessary sanction would be returned to
the Division/Complex for taking further action.
8.1.6 The division while putting up the proposal for PSC/ Board approval should ensure to enclose the brief
summary as per the format (Annexure-22) along with the Board note/brief for the approval.
8.1.7 Chronology of progression of purchase proposal, placed at Annexure-22A, to be enclosed along

with all proposals.
8.1.8 The Purchase Section, on the basis of approved purchase proposals, shall release purchase orders
at the earliest.
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8.2 Purchase Order: The following instructions shall be followed, while preparing the purchase orders
a) All purchase orders shall be typed and not handwritten.
b) Total No. of items must be mentioned in words to obviate any unauthorized alterations.
c) Alterations, additions or amendments shall be avoided on Purchase Orders. Amendments if any

are to be effected only by issuing Purchase Order amendments.
d) Where CFA is CEO/Director/CMD/PSC/Board only purchase proposals along with relevant

annexures to be put up for approval. Draft Purchase Order to be cleared by the Division.
e) Draft Purchase Orders shall be signed by head of purchase where CFA is CEO/Director/ CMD/
PSC/ Board and by an Officer at the level of manager / Senior Manager in other cases. Draft
purchase order shall be signed in full duly indicating designation on two copies of the purchase
orders, one of which shall be sent to Finance and other to be retained as master office copy in
the purchase file. The Draft Purchase Order should be superscribed as “draft” or “for internal use”
to avoid any misuse or wrongful transmission of the PO to the vendor before approval by CFA.
After approval of CFA the Purchase Order shall be signed by head of purchase where CFA is CEO/
Director/ CMD/PSC/ Board and by an Officer at the level of Manager /Senior Manager in other
cases. Where availability of Manager /Senior Manager is not there in the department, IMM -Head
may decide the lower rank officer for signing on such Purchase Orders.
f) Regarding determination of CFA for the selected party, if there is considerable time gap in the
date of preparation of comparative statement and submission of the proposal, the rate of foreign
exchange as at the time of preparation of the purchase proposal to be considered if, there has
been movement in the foreign exchange which is likely to affect the determination of CFA. This
does not change the status of L1 as determined by the exchange rate at the time of tender
opening.
8.3 Delegation of Powers: As approved by the Board of Directors shall apply.
8.3.1 Procurement action in the normal course should be processed based on the annual requirement of all
items taken together for the ROH task and for other programme / task / project based on firm orders
from customers, considering the lead time requirement and staggered delivery. Appropriate CFA for
placement of order would have to be reckoned in line with the value of the annual requirement.
8.3.2 With regard to entering into LTBAs/ LTRAs with Vendors for recurring requirement of Items the
appropriate CFA for approval of LTBA/ LTRA would have to be reckoned in line with the value of total
requirement during the period for which duration the LTBA is being finalised.
8.3.3 While processing orders for procurement of material(s) required in Design and Development / Limited
Series Production (LSP), it is to be ensured that the CFA for its approval is determined appropriately
taking into consideration, future requirements of such material(s) towards series production over the
length of the project
8.4 Purchase Order / Database
All purchase orders including amendments should be processed through ERP system.
8.5 Distribution of Purchase Order Copies
8.5.1 Purchase order copies would need to be sent to Finance (along with copy of approved purchase
proposal), The original purchase order is sent to vendor while a copy is retained in the purchase file.
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Further, as a distribution of PO copies to other associated departments like Stores, Indenter, Quality
and User department should have an access to Purchase Order through ERP. Such of the orders not
accessible through ERP may be provided as hard copy against specific requirements.
8.6 Purchase Order Acknowledgement
8.6.1 One copy of purchase order shall be sent to the supplier with a request to send back the acknowledgement
as a token of acceptance of the order. (Proper acknowledgement form is to be enclosed).
8.6.2 While sending a copy of Purchase Order for acknowledgement by the supplier, a suitable mention
must be made of the period within which the Vendor has to respond. In case the acknowledgement is
not received within the stipulated period, the dealing officer should correspond with the supplier for
an appropriate response
8.7 Purchase Order Amendment
8.7.1 Amendment to purchase orders may arise due to :
a) Change in price / payment terms
b) Change of delivery date
c) Amendment to quantity
d) Change in mode of transport
e) Correction of errors and omissions
f) Change in statutory requirements
g) Change in terms & conditions
8.7.2 Amendment to purchase order/Contract shall be approved by
a) The same authority, which approved the Purchase Order duly concurred by appropriate Finance,
if it results in financial implication to the Company, subject to the amended value being within the
financial powers of the delegatee. If the amended value exceeds the delegetee power, then the
same to be approved by the CFA as per the amended value.
b) Head of Division, where there is change in name, address of the firm, change in part no. for
the same item, nomenclature, unit of measurement, delivery schedule amendment if LD is not
leviable (LD not in PO or LD not applicable due to force majeure, delay not attributable to vendors
/ contractors etc.) and also deletion of items where the original proposal was approved by CEO
or CMD. However, such amendments without any financial implication, to the POs approved by
the Board and / or the sub-committee shall be approved by the CMD.
c) The same authority in cases of change in mode of transport with concurrence of Finance, if it
results in financial implications to the Company
d) The same authority which approved the Purchase Order, for corrections of errors and omissions.
8.8 Purchase Order Terms and Important Conditions
8.8.1 The terms & conditions in the purchase order, including payment terms, LD for delayed supplies and
bearing the cost of LC confirmation/ extension etc, need to be very clear and may be amplified if
necessary to avoid ambiguity/ mis-interpretation. No such condition, which has not been agreed and
finalised with Vendor, should be incorporated unilaterally (Annexure-23A).
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8.8.2 Some of the important conditions of purchase orders are enumerated below
8.8.2.1 Standard Terms and Conditions
Suppliers generally quote as per their standard terms and conditions of sales. These conditions shall
be examined and effort shall be made to bring round the supplier to agree to the standard terms
and conditions of the Company. For any contract to be legally binding the acceptance of tender
conditions in to is essential. If the tenderer has quoted his own terms and conditions he should either
be persuaded to withdraw his terms and conditions or the same may be agreed to and incorporated
in the order, depending upon the situation.
8.8.2.2 Prices
As far as possible, orders shall be on firm prices. In certain cases, some firms quote and insist on
prices ruling at the time of dispatch and there may be no other option. In such cases, the firms may
be advised to intimate the ruling price and obtain concurrence before dispatch.
8.8.2.3 Payment Terms
Payments on proof of dispatch shall be allowed only to approved suppliers and firms of repute.
Under all circumstances, satisfactory proof of dispatch shall be insisted upon. The tender/ request
for quotation should not indicate any advance in payment terms.
8.8.3 Advance Payment: However in case of a quote received with condition of advance payment, the
leveling of quotes shall be carried out by appropriately accounting interest on advance to arrive at L1
quote, except where discounted cash flow method not applicable.
8.8.3.1 During the correspondence/discussions/negotiations with vendors (who have demanded for advance
payments). Division should explore the possibility of obtaining vendor’s concurrence for (i) making
100% against supply & acceptance or (ii) making advance payment with interest at the prevailing
Bank Rate i.e. LIBOR plus 2% in the case of Foreign Suppliers & PLR (Prime Lending Rate) in the
case of Indian suppliers.
8.8.3.2 No advance should be agreed, if the same has not been included in the original offer. If for reasons
(to be recorded), the same is agreed later on, the advance shall be interest bearing at prevalent
scheduled bank lending rates.
8.8.3.3 Any advance payments to suppliers shall be made only after receipt of an unconditional Bank
Guarantee of equivalent amount from a nationalized Bank (in case of indigenous suppliers) or from an
international bank of repute (in case of a foreign supplier)
8.8.3.5 In case an advance has been agreed as part of the contract, the advance payment may be released
in-stages depending upon the progress of development work/ supplies.
8.8.3.6 The powers to approve advance payment without Bank Guarantee are subject to following:
a) Specific insistence by the suppliers and not as a matter of routine.
b) Approved delegation to the CEOs/Head of Division concerned with due financial concurrence.
c) RBI guidelines issued vide “Foreign exchange Management Act” as amended from time to time,
in case of advance in foreign currency and submission of evidence of import within the prescribed
time limit.
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d) Divisions making adequate assessment of the Vendor w.r.t. his credibility in meeting his obligations
for which Advance has been paid, which will in turn depend upon:
• Division’s documented assessment of credit-worthiness of the Vendor.
• Past experience with the Vendor in respect of his ability and intentions to meet the obligations
of the contract/ purchase order.
• Total advance (including that on other orders on the Vendor), without Bank guarantee,
outstanding with the Vendor.
• Vendor’s guarantee or written commitment to return the advance (with interest) in case of
failure to supply/ cancellation or termination of order and/ or Force Majeure conditions.
8.8.3.7 For advance payment to vendors, guidelines issued from time to time need to be followed.
8.8.3.8 Advance upto Rs. 5 lakhs
For interest free advance, CFA for approval of advance will be MC (Management Committee) and for
interest bearing advance the CFA for approval of advance will be Director concerned.
8.8.3.9 Advance above Rs. 5 lakhs
a. The cases where vendors agree for interest bearing advance up to 15%, the CFA for approving
the advance payment will be the Director concerned. The interest on advance payment should be
adjusted from the balance payments to be made to the vendor. A suitable provision in this regard
be incorporated in such POs.
b. The cases where vendors do not agree for interest bearing advance/advance more than 15%,
Board approval needs to be taken prior to seeking approval of appropriate CFA as per DoP / CVC
requirement for placement of order.
c. Advance Payment beyond 15%, even if it is interest bearing, needs to be put up for Board
approval.
8.8.3.10 In case CFA is the Board of Directors, while seeking Board’s approval for the proposal specific
approval for the advance payment needs to be obtained.
8.8.4 Risk Purchase
Risk purchase is only tenable, if made within six months of the cancellation of order and for the
material to the same specifications.
8.8.5 Arbitration Clause
A standard arbitration clause as recommended by the Indian Council of Arbitration (ICA) or International
Centre for Alternative Dispute Resolution (ICADR) under the Arbitration Act shall be incorporated.
8.8.6 Security Deposits and Performance Guarantees
8.8.6.1 The requirement of submission of interest free Security Deposit through Demand Draft or Bank
Guarantee (BG) and Performance Bank Guarantee (PBG) covering the warranty period by the
successful bidder may have to be incorporated in RFQ depending upon the nature and the merits of
each case. In such a case, the Security Deposit (BG in lieu thereof) and PBG have to be obtained as
per the prescribed schedule must be deposited by the firm within specified time.
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8.8.6.2 Relaxation of condition relating to EMD/ Security deposits needs to be obtained prior to invitation of
bid based on merit of each case, in line with DOP.
8.8.7 Agents/Agency Commission
8.8.7.1 Following clause shall be incorporated in all enquiries, tenders, purchase orders, contracts/
agreements:
8.8.7.2 The seller confirms and declares to the buyer that the seller is the original manufacturer or authorized
distributor / stockiest of original manufacturer or Govt. Sponsored / Designated Export Agencies
(applicable in case of countries where domestic laws do not permit direct export by OEMS) of the
stores referred to in this offer / contract / Purchase order and has not engaged any individual or firm,
whether Indian or Foreign whatsoever, to intercede, facilitate or in any way to recommend to Buyer or
any of its functionaries, whether officially or unofficially, to the award of the contract / purchase order
to the Seller; nor has any amount been paid, promised or intended to be paid to any such individual
or firm in respect of any such intercession, facilitation or recommendation. The Seller agrees that
if it is established at any time to the satisfaction of the Buyer that the present declaration is in any
way incorrect or if at a later stage it is discovered by the Buyer that the Seller has engaged any
such individual / firm, and paid or intended to pay any amount, gift, reward, fees, commission or
consideration to such person, party, firm or institution, whether before or after the signing of this
contract / purchase order, the Seller will be liable to refund that amount to the Buyer. The Seller
will also be debarred from participating in any RFQ / Tender for new projects / program with Buyer
for a minimum period of five years. The Buyer will also have a right to consider cancellation of the
Contract / Purchase order either wholly or in part, without any entitlement or compensation to the
Seller who shall in such event be liable to refund all payments made by the Buyer in terms of the
Contract / Purchase order along with interest at the rate of 2% per annum above LIBOR (London
Inter Bank Offer Rate) (for foreign vendors) and Base Rate of SBI (State Bank of India) plus 2% (for
Indian vendors). The Buyer will also have the right to recover any such amount from any contracts /
Purchase order concluded earlier with Buyer.
8.8.7.3 It should be ensured that the supplier confirms/responds to this clause at the time of registration as
well as along with the offer.
8.8.7.4 Ministry of Defence has issued regulatory provisions in respect of Indian Authorised Representatives/
Agents, where permissible. (Ref: http://mod.nic.in/newadditions/repagent.htm)
8.8.7.5 Following additional clause shall be incorporated in all enquiries, tenders, purchase orders, contracts/
agreements.
“HAL has not appointed any agent in India or outside India for procurement of any items and deals
directly with vendors. In case any individual or firm approaches you posing themselves as an
authorized agent of HAL, it is requested that you should not entertain such claim and in addition
inform immediately to HAL”. Designation of the officer to whom information to be sent should be
indicated.
8.8.8 Liquidated Damage Clause
8.8.8.1 Liquidated damages are remedies available to compensate for the financial loss suffered as the result
of a proven breach of contract.
8.8.8.2 A clause for recovery of liquidated damages may be included. The percentage of liquidated damages
shall be realistic and have a relationship to a predetermined loss which the Company may suffer
on account of delayed supplies. The contract may include LD at the rate of 0.5% per week and a
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maximum of 10% for the duration of delay, beyond the delivery schedule as per PO or the schedule
acknowledged by the vendor. In case of tenderers not agreeing for LD clause, the maximum LD
amount / to the extent not agreed LD value, to be loaded in the Comparative Statement, to determine
the successful bidder.
8.8.8.3 However, a careful watch shall be kept on agreed delivery schedule and the firm shall be warned by
sending reminders at appropriate time before the expiry of delivery date. Liquidated damages due
as per agreed amount shall be recovered from the payments due to the supplier and shall not be
postponed till the final payment becomes due. However, in case where the delay has occurred on
account of Force Majeure situation at the end of the vendor or is not attributable to the vendor, the
PO shall be amended without imposition of LD. In case the delay is attributable to the vendor, but in
the interest of securing supplies/further supplies and maintaining long term business relationship with
the vendor in the commercial and financial interest of the company, it is considered not to impose LD,
the same shall be waived with the approval of Competent Authority as per DOP.
8.8.8.4 When it is determined that a liquidated damages clause will be included in the contract/ Purchase
Order, the applicable clause and appropriate rate(s) must be contained in the RFQ.
8.8.8.5 Once liquidated damages are included in a contract, actual damages are not recoverable.
8.8.8.6 Contracts with liquidated damages clauses should also contain excusable delay clauses. These
typically provide that if the contractor is delayed by certain specified causes that are beyond the
contractor’s control (e.g., supply of materials/ drawings/ tools/ specifications by HAL, activities
determining To etc) then the resulting delay is excused and liquidated damages will not be assessed.
8.8.8.7 Liquidated damages are not assessed after the date on which the work/ supply is substantially
completed. Substantial completion is usually defined as the time when the construction site or the
supplies delivered are capable of being used for their intended purposes. There is no predetermined
percentage that will establish substantial completion and the decisions place more emphasis on
the availability of the work for its intended use than on the use of formulas as to the percentage of
completion of the work.
8.8.8.8 Determination and extent of Liquidated damages to be recovered from a supplier shall be determined
by User/ IMM and advised to Finance. Document evidencing completion of Sellers obligation as per
Incoterms indicated in para-20.27 or 20.28.5 (as the case may be Incoterm 2000 or 2010) will be the
basis for determining LD.
8.8.9 Price Escalation Clause
Escalation clause, where agreed should have a fixed element and a variable element consisting of
Labour and material. Price escalation clause, if agreed to, shall be clearly defined as to what extent
and on what basis escalation is admissible. The clause should also specify cap on escalation. Price
Escalation Clause needs to clearly define applicability of escalation up to point of ordering or point
of delivery.
8.8.10 Integrity Pact
a) The system of signing of an Integrity Pact (IP) has been introduced in HAL in line with Govt.
directives for the Contract(s) / POs based on the threshold value notified from time to time.
b) The IP essentially envisages an agreement between the prospective bidder(s) / seller(s) and the
buyer committing the persons / officials of both the parties not to exercise any corrupt practices
/ influence on any aspect of the contract.
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c) The main highlights of implementation of IP are as follows :
(i) Vendors / bidders / sellers, only those who commit themselves to IP with the buyer would be
considered competent to participate in the bidding process. In other words, entering into this
pact would be a preliminary qualification. IP needs to be signed with all the bidders who have
participated in a tender, IP format along with appropriate clause needs to be included in the
RFQ if IP requirement arises based on HAL’s estimated value. In case of competitive tender,
bids not accompanied with signed IP by the bidders along with the prequalification (three
bid), technical bid (two bid) and price bid (single bid), the offers shall be summarily rejected.
ii) In case of non submission of signed IP by licensor / OEM/ proprietary source / single tender
basis, the offer received from such vendor should be considered for evaluation, however
vendors will be insisted upon to submit the signed IP before finalization of the Purchase
Order/Contract. In such case signed IP should be obtained before putting up to the proposal
for CFA’s approval.
(iii) It has to be ensured through an appropriate provision in the contract that IP is deemed as a
part of the contract so that the parties concerned are bound by its provisions.
(iv) IP should cover all phases of the contract i.e. from the stage of Notice Inviting Tender (NIT)
/ Request for Quotation (RFQ) till the conclusion of the contract i.e. the final payment or the
duration of warranty / guarantee.
(v) Name and address of the concerned Independent External Monitor (IEM) should be invariably
be cited in the NIT / RFQ.
(vi) A cross reference clause is required to be included in the Purchase Order / Contract to link
and co-relate IP & Purchase Order/Contract accordingly.
d) The standard format of HAL’s revised IP format is as per Annexure-24.
e) On opening of the respective tenders, it should be ensured that all vendors / bidders / sellers
have signed and submitted the IP before processing the bids further.
f) Integrity Pact needs to be signed by the bidder as per the HAL format. Signed IPs so received
without any deviation (from HAL’s approved format) from the bidders, to be put up to Head of
the Division for signature. A copy of the signed IP by the HAL needs to be forwarded to the
respective bidders preferably within 15 working days from the date of opening of first bid. In
case bidder have signed IP with any material change / deviations (from HAL’s approved format)
against competitive tendering, the bids of such bidders needs to be summarily rejected. In case
of deviation in signed IP by licensors/proprietary source/OEM/single source basis, such IP with
deviation necessarily should be signed only after approval of the Board for the deviation before
putting up to the Head of the Division for signature. After the signature, a copy of the IP to be
forwarded to the bidder preferably within 7 working days. After approval of the deviation in the IP
by the Board, the Head of the Division needs to forward a brief of the case to CVO, HAL to enable
CO-Vigilance to forward the same to CVC with a copy to MoD for information.
g) A copy of the signed IP along with brief of the tender needs to be forwarded to Corporate Office
within 15 days from the opening of first bid.
h) Once an IP with deviation(s) be approved by the board, approval of the board is not required once
again for the same deviation submitted by the vendor for other tenders. However, separate IP
needs to be signed against each tender.
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8.8.11 Immunity to Government of India
Following clause on the subject shall be included in the Terms & Conditions of the Purchase Order/
Contract:
“It is understood and agreed that the Government of India is not a party to this agreement and has
no liabilities, obligations or rights hereunder. It is expressly understood and agreed that HAL Design
Complex is an independent legal entity with power and authority to enter into contracts solely in its
own behalf under the applicable Laws of India and General Principles Contract Law. The vendor
shall agree, acknowledge and understand that HAL is not an agent, representative or delegate of
the Government of India. It is further understood and agreed that the Government of India is not and
shall not be liable for any acts, omissions, commissions, breaches or other wrongs arising out of the
contract. Accordingly, vendor expressly waives, releases and foregoes any and all actions or claims
against the Government of India arising out of this contract, not to sue the Government of India as
to any manner, claim, cause of action or thing whatsoever arising out of or under this agreement.”
8.9 Purchase Order Returns
8.9.1 The Purchase Order returns should be submitted (as per Annexure-25), every month, for all categories
of Purchase Orders placed by the Divisions.
8.9.2 The PO returns are to be submitted to CO-IMM in Excel Sheets separately for imported & indigenous
purchases, every month by 10th of the following month.
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CHAPTER - IX
SUB-CONTRACTING
9.1 Sub contracting is covered under a separate Sub Contracting Manual. However in respect of
subcontracting to OEM or Foreign Vendors, the movement of material and finished goods is through
customs and mode of payment will be through foreign currencies .Purchase procedure within the
delegation of powers as per Subcontracting can be followed.
9.2 Outsourcing to licensor/OEM sources in case of exigencies due to constraint of technology absorption/
capacity needs to be approved by the Board.
9.3 Purchasing from Licensor/ OEM where manufacturing facilities have been planned / established is
not considered as sub-contracting. However the provisions of DoP required to be followed.
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CHAPTER - X
IMPORT PURCHASE
10. Custom Duties and System of classification of Goods
10.1 Customs duties are chargeable on the act of importation of Goods. On some goods, customs duties
are also charged on the act of exportation. The nomenclature of goods form the basis for prescribing
appropriate duty on goods imported / exported. The nomenclature combined with the duty rates is
called the Tariff and ‘Tariff Schedule’.
10.2 The Indian Customs Tariff has 21 sections and 98 chapters. A Section is a grouping together of a
number of Chapters, which codify a particular class of goods. The Section notes explain the scope
of chapters / headings, etc. The Chapters consist of chapter notes, brief description of commodities
arranged at four digit, six digit and eight digit levels. Every four-digit code is called a ‘heading’ and
every six-digit/eight digit code is called a ‘subheading’. Applicable exemption notifications are also
indicated after the classification.
10.3 “Classification of Goods” is determination of heading or sub-heading under which a particular item is
covered is based on the Harmonized System of Nomenclature (HSN), which has been established by
the World Customs Organization.
10.4 Goods are classified taking into consideration the scope of headings / subheadings, related Section
Notes, Chapter Notes and the General Interpretative Rules (GIR).
10.4.1 The GIR is a set of 6 rules for classification of goods, to be applied sequentially:
Rule 1: gives precedence to the Section notes / Chapter notes while classifying a product.
Rule 2(a): applies to goods imported in assembled / unassembled condition. Such goods may be in
incomplete or finished form.
Rule 2(b): is applicable to ‘mixtures’ and ‘composite goods’. Goods, which are not classifiable by
application of Rule 2(b), will have to be classified by application of Rule 3.
Rule 3: has three sub rules.
Rule 4: states that goods, which cannot be classified by application of the preceding rules, may be
classified under the heading appropriate to the goods to which they are most akin.
Rule 5: applies to packing materials / articles in which the goods are carried.
Rule 6: provides the general guideline for classification of goods under the appropriate sub heading.
10.5 The rate of duty specified in the Tariff Schedule is called ‘Tariff rate of duty’. Goods which are not
identified for concessional rate of duty / exemption from duty by issue of an exemption notification
are levied to the tariff rate of duty. In the export tariff schedule, only the commodities on which export
tariff is levied are stated which does not involve the rigorous process of classification. In fact export
duties are leviable only on listed 26 commodities but by exemption notifications, all but one set of
item (i.e., leather items) are completely exempt from export duties.
10.6 The duty structure is subject to change by the Government, generally on presentation of annual
Budget in the Parliament or otherwise and it is necessary for the Purchase Groups to keep abreast of
such changes and refer to the latest provisions only.
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10.7 Permissibility of import and export of Goods is governed by the nomenclature, ITC (HS) classification
of import and export goods, published by the Directorate General of Foreign Trade (DGFT). In this
nomenclature, goods are arranged as they are in the HS but are codified by ten digit numerical code
to identify goods with more precision for purposes of import / export control.
10.8 Customs Valuation : The rates of customs duties leviable on imported goods (& export items in
certain cases) are either specific or on ad-valorem basis (i.e., depending upon its value) or at times
specific cum ad-valorem.
10.9 Clearance of Import Cargo & Demurrage Charges :
10.9.1 To ensure timely receipt and forwarding of Shipment Documents viz. Bill of Lading / Airway Bill,
Invoice, Packing List (s), Quality Certificate (s), Warranty / Guarantee Certificate, Certificate of Country
of Origin, etc. to the clearing authorities well in advance along with copy of Purchase Order including
its amendments.
10.9.2 To co-ordinate in providing timely information such as Technical Write-up, Literature, Clarifications,
etc. to the Clearing Authorities wherever required, to speed up clearance.
10.9.3 A clause also is to be incorporated in the Purchase Order indicating that any demurrage charges
paid by the clearing authority on account of delayed delivery of requisite documents or error in the
documents provided by the Seller & attributes to Seller, the same will be to the account of the Seller.
10.9.4 A Clause is required to be incorporated in the Purchase Order clearly indicating that the seller shall
notify the ultimate consignee, the details of shipment within 24 hours of dispatch of items from the
port of shipment in respect of Sea Cargo. One set of shipment documents including Bill of Lading,
Invoice, Packing List (s), Quality Certificate (s), Warranty / Guarantee Certificate, Certificate of Country
of Origin, etc. is to be sent by Air Courier to reach buyer, within seven days of Bill of Lading.
10.9.5 Port of Discharge and Place of Delivery, to be clearly indicated in the Purchase Order, wherever Port
of Discharge and Place of Delivery are not the same in respect of Sea Cargo.
10.10. Rights of appeal and CESTAT:
10.10.1 Under the Customs Act, 1962, an importer can appeal against a decision on valuation to the
Commissioner (Appeal) in the first instance. A second appeal lies to the CESTAT (Customs, Excise &
Service Tax Appellate Tribunal), the apex tribunal for deciding appeals against the orders passed by
the commissioners of customs and central excise. However, in reference to Settlement of disputes
between one Government Deptt. and another and one Govt. Deptt. and a Public Enterprise and
Public Enterprises and another, the Govt. order no 3/3/91-PMA dated 5th May, 1993 specifies that –
(i) Any litigation involving Ministries and public undertakings of Government of India before being
taken up in courts or tribunal the matter be first examined by the Committee set up by Cabinet
Secretary in order to get clearance for litigation. This Committee of Secretaries comprising
of Cabinet Secretary, Secretary ID, Secretary DPE, Secretary Deptt. Of Legal Affairs, Finance
Secretary and the concerned Secretary clear cases for litigation to be taken up with courts and
tribunal.
(ii) Any Public Sector Enterprises desiring to go for appeal to ITAT/CESTAT/ Railway claims Tribunal
or courts should first get each case of dispute scrutinised carefully by their Board of Directors.
The Board of Directors should clearly recommend after careful examination of all aspects of
the case, whether it should be taken up to the Tribunal / Court. On the recommendations of the
Board of Directors that the case should go to Tribunal or Court, it will again be scrutinised by
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the administrative Ministry / Department concerned. Secretary to the administrative Ministry /

Department would then carefully scrutinise the case in order to decide whether an appeal before
Tribunal or Court is necessary and worthwhile.
(iii) Only such cases that are recommended for appeal to ITAT/CESTAT/Railway Claims Tribunal
and court by the administrative Secretaries of Ministries / Departments should be put up to the
aforesaid Committee of Secretaries for getting clearance for further litigation.
10.10.2 In case where disputes arise between two Central Govt. Dept. or Public Sector Undertaking, there
is no requirement of obtaining approval of the Committee on disputes for pursuing litigations as
was being done. Field formations may now pursue their appeals in the respective Tribunals / Courts
without obtaining clearance from the Committee of disputes. (Instruction F No. 390/R/260/09-JC dtd.
24.3.11).
10.11 Provisional clearance of imported goods:
10.11.1 Section 18 of the Customs Act, 1962 and Customs (provisional duty assessment regulation), 1963
[M.F. (D.R.) Notification No.181-Cus., dated 13th July, 1963], allows an importer to provisionally clear
the imported goods from Customs pending final determination of value by giving a guarantee in the
form of surety, security deposit or bank guarantee.
10.12 Use of tariff to calculate Customs Duty
10.12.1 Following paragraphs are given as general guidance to calculate Customs Duty. However current
Customs Valuation (Determination of Price of Imported Goods) Rules, 1988, need only be referred to,
for exact determination of Customs duty.
10.13 Customs Duties -Imports
10.13.1 There are several types of duties leviable on import and there are prescribed methods of computation
of duties. It is useful to consider the following steps in determining the amount of duty payable.
a) Obtain the Tariff Classification of goods.
i) The import invoice would indicate all items of purchase. If you wish to compute the total duty
payable on each of the items, you have to first identify the various types of duties leviable on
each of the items. For this purpose, you are required to determine the classification of each
of the items of import as given in the import invoice based on your understanding of the item
description. The rules of to be followed while determining the classification have been given
in the General Rules of Interpretation of the First Schedule to the Customs Tariff Act,1975.
b) Compute the
i) Basic Customs Duty
ii) Countervailing Duty (CVD) (Equivalent to Excise Duty)
iii) Education cess and Secondary & Higher Education cess
iv) Special Additional Duty.
c) Determine if there are any additional levies under different statutes
d) Whether there are concessions and exemptions available on the item.
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10.14 Basic Customs Duty
10.14.1 Duty, which is specified against each Heading or Sub-Heading in the First Schedule to the Customs
Tariff Act, 1975. This is usually referred to as Basic Customs Duty. There are different rates of duty
for different commodities. These rates are found in column no. 4 (labeled as “standard rates”) of
the tariff. There is also a 5th column specifying the “preferential rates”. These are different rates of
duty for goods imported from certain countries in terms of bilateral or other agreements with such
countries--which are called preferential rates of duties. The duty may be a percentage of the value
of the goods (in such cases it is called ad-valorem duty) or at a specific rate, which is based on unit
of measurement which is specified in the tariff entry. The rate of duty in percentage (in the case of
advalorem duties) has to be applied on the Cost Insurance and Freight.
10.14.2 To ascertain the applicable rate of duty, refer to the Tariff rates of duties along with exemption
notification, if any. Following sites are specifically useful for matters relating to Customs Procedures,
Manual & Tariff:
Customs Deptt : http://www.cbec.gov.in/
Customs Acts : http://www.cbec.gov.in/cae/customs/cs-acts-main.htm
Customs Tariff : http://www.cbec.gov.in/cae/customs/cs-tariff/cst-note.htm
Customs Forms : http://www.cbec.gov.in/cae/customs/forms_pdf/forms_idx_final.htm
Customs Notifications : http://www.cbec.gov.in/cae/customs/cs-notfns-main.htm
Customs Manual : http://www.cbec.gov.in/cae/customs/cs-manual/manual_idx.htm
10.15 Countervailing duty (CVD) of customs
10.15.1 Additional duty of customs equal to the, excise duty leviable on like goods produced or manufactured
in India. This is levied under Section 3 of Customs Tariff Act, 1975. This is usually referred to as
“countervailing duty” (CVD). However, the correct description of this duty is Additional Duty of
Customs. In order to determine the applicable rate, you have to obtain the correct classification of
the goods under the Central Excise Tariff Act, 1986. The duties under the Central Excise Tariff are
on ad-valorem basis. However, specific rates have been prescribed for some items. Importantly, the
value for the purpose of computing additional duties of Customs is the total of the assessable value
(generally the transaction value - roughly equal to the c.i.f. value) and the basic customs duty.
10.15.2 A manufacturer, who is importing goods to be used as inputs for manufacture of other goods, would
be generally eligible for obtaining credit (called CENVAT credit) equal to the additional duty of customs
paid on the imported goods. This duty amount is eligible for credit under input duty Central Excise
Rules, 1944. This credit can be used for paying central excise duties on the manufactured goods.
10.16.1 Education cess as applicable from time to time on all Imports
10.16.2 Secondary & Higher Education cess as applicable from time to time on all imports
10.17 Special Additional Duty
10.17.1 A Special Additional Duty at a rate to be notified by the Central Government is leviable on any
article imported into India. The maximum rate at which the Special Additional Duty can be levied is
8%. However, the Central Government has by Notification No. 18/2000-Customs, dated 1-3-2000
specified the rates of Special Additional Duties at different rates. The maximum rate specified under
the said notification is 4% ad-valorem.
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10.17.2 For details refer Section 3A of Customs Tariff Act, 1975 (51 of 1975).
10.18 Other Additional Customs Duties
10.18.1 Safeguard Duty (under Section 8B of the Customs Tariff Act, 1975) is applicable on certain goods
at the time of import for specified periods in order to check their excessive imports which may be
injurious to the Indian industry.
10.18.2 Some of the levies are commodity specific and would be applicable regardless of the time of import.
These include cesses under various enactments as also Additional Duties on specified commodities
for example Additional Duty on Stainless Steel Manufactures for household use, on Transformer Oil,
on Motor Spirit (commonly known as petrol), on high speed diesel Oil etc. There are certain other
levies, which are specific to the country of origin.
10.18.3 Countervailing Duty on bounty-fed articles is leviable under Section 9, of the Customs Tariff Act 1975.
No such duty is however, being levied at present.
10.18.4 Anti-dumping Duty (under Section 9A, Customs Tariff Act 1975) on specified goods imported from
specified countries to protect indigenous industry from injury resulting from dumping of goods. This
is notified and published from time to time.
10.19 Exemptions:
10.19.1 The Central Government may notify certain exemptions and concessions, which may be conditional
or absolute. These include exemption of imports for promotion of exports, import by UN bodies,
defence imports etc. There are also exemptions, which are unconditional and are applicable across
the board. There are other exemptions based on conditions of end use.
10.19.2 Exemption to imports relating to Defence and internal security forces, vide Notification No. 39/96-
Cus., dated 23-7-1996 is of special significance to HAL. It exempts goods of the description specified
there-in in column (2) of the Table, when imported into India, from the whole of the duty of customs
only leviable thereon which is specified in the First Schedule and from the whole of the additional
duty leviable theron under section 3 of the second Act subject to the conditions, if any specfied in
the corresponding entry in column (3) of the said Table. However, the Ministry of Finance has by
Notification No.: 29/2015-Customs dated 30-04-2015 has withdrawn the exemptions in respect of
CVD, SAD & education cess against import by HAL.
10.19.3 Preferential rates of customs duty have been made applicable in respect of imports from certain
countries such as Sri Lanka, Mauritius, Seychelles and Tonga provided certain conditions are satisfied.
The goods in question must actually be manufactured or produced in such preferential areas. Rules
have been framed in order to determine whether the goods have been manufactured or produced in
such areas. Determination of origin of the goods is very essential in order to avail of the benefits of
such concessional rates of duty.
10.20 Note of Caution
10.20.1 All the acts, rule, procedures and thereby the quantum of duties etc are subject to change by
notifications issued from time to time. Therefore it is necessary to refer to updated information only,
before entering into any commitment.
10.21 Customs Duties : Exports
10.21.1 Very few items are subjected to customs duties on their export. For details refer to the Second
Schedule and the exemption notifications for exports. However, cesses are leviable on export of
several commodities under various Acts.
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10.22 Excise Duty
10.22.1 Duties of excise are attracted when excisable goods are manufactured or produced in India. There
are several types of duties which become payable at the time of clearance of such goods. These
duties are: -
i) Basic Excise Duty
ii) Special Excise Duty
iii) Additional Duties of Excise and
iv) Cess
10.22.2 Basic Excise Duty: This duty is specified against each sub-heading in the First Schedule to the
Central Excise Tariff Act, 1985. There are however, notifications issued by the Central Government,
which grant either total or partial exemption from incidence of basic duty. These exemptions are both
general and conditional in nature. The effective rate of basic excise duty is thus determinable only
after reference to the relevant exemption notification given under the heading “General Exemptions”.
10.22.3 Special Excise Duty: This duty is leviable only on a few items. The rate of duty and the items on
which it is leviable are specified under the Second Schedule to the Central Excise Tariff Act, 1985.
10.22.4 Additional Duties of Excise: There are a number of additional duties leviable under different
enactments on various commodities. Under Additional Duties of Excise (Textile and Textile Articles)
Act, 1978, duties of excise are chargeable on specified textiles and textile articles. Additional Duties
of Excise (Goods of Special Importance) Act, 1957 prescribes additional duties on sugar, tobacco
products and textile articles in lieu of sales tax.
10.22.5 Cess: Different items are subject to levy of Cess at varying rates under different enactments.
10.22.6 To ascertain the applicable rate of duty, refer to the Tariff rates of duties along with exemption
notification, if any.
10.23 Custom Duty Exemption Certificate : An appropriate Clause with regard to applicability / issuance of
Custom Duty Exemption Certificate, if applicable, for import of material needs to be clearly indicated
in the RFQ/Purchase Order. In case the need arises to render the Duty Exemption Certificate for
import of material by Contractor / Sub-contractor of HAL against HAL order, it is to be ensured that
the same may be rendered within 6 weeks from the date of submission of complete documents by
the sub-contractor, as required under Notification No.39/96.
10.24 Withholding Tax: (If applicable appropriate clause needs to be included in the RFQ).
i. HAL would be deducting at source applicable Income Tax as per Government of India Rules
applicable at the time of making payments in respect of services rendered in India. (Generally on
the amounts towards services like training, technical assistance offered by the bidder and license
fees). As per the Rules, Income tax has to be borne by the recipient of the Income and relevant
certificate to this effect will be issued to the bidder on deduction of such amounts, if applicable.
ii. Bidder should bear the applicable withholding income tax in India. Tax would be deducted at
source by HAL as per DTAA where the bidder could claim the benefit of double taxation in their
country as per the bilateral agreement between the two countries. Certificate to this effect would
be issued by HAL to enable the bidder to claim the benefit under DTAA.
iii. Bidder is required to indicate the PAN No. issued by Indian Income Tax Authorities.
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CHAPTER - XI
PURCHASE PROGRESSION
11.1 Monitoring is a vital part of any efficient managerial functioning. The efficiency of purchasing largely
depends on a good and effective purchase progression system. The progression system should
ensure the following in respect of each purchase request received by the Purchase Department :
i) Enquiry is sent in time
ii) offers are received in time
iii) order is placed in time within the validity of offer
iv) goods on order are received as per delivery schedule and bills / discrepancies are settled promptly.
11.1.1 For ensuring the above, a progression cell should be specially organised in the Purchase Department
to operate directly under the Head of the Purchase Department. Care should be taken to ensure that
the cell deals with real time information and does not become a postmortem cell to find faults with
the other sub-departments of Purchase. The cell shall provide a positive service by providing timely
warning signals where delays are occurring so that timely corrective action is initiated by the Buyer.
11.1.2 Computer facilities are now available with the various Divisions of HAL. It is therefore, in the prime
interest of Purchase Department to plan timely input of purchase date to the computer for obtaining
Purchase Progression Service from the Computer Center. In the intervening period, the cell shall
monitor the progression of purchases with the help of
i) Purchase Request / Indent Progression Register/ Database (Pre contract stage)
ii) Purchase Order Progression Register/ Database (Post - contract stage)
11.2 Purchase Request / Indent Progression Register/ Database
11.2.1 All indents received shall be entered in the Indent Progression Register/ Database. The register/
Database shall have the following columns:
a) Serial Number
b) Indent Number and Date
c) Brief description of the item
d) No. of items on the indent
e) Estimated Value
f) Date Indent received
g) Date Enquiry issued
h) Due date for receipt of offers
i) Date of tender opening
j) No. of tenders received
k) Date comparative statement was prepared
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l) Date of putting up proposal for approval
m) Purchase Order Number and Date
n) No. of items in the Purchase Order
o) Name of Supplier
p) Value of the Purchase Order
q) Remarks
Above details / information otherwise can also be maintained in IFS.
11.3 The Indent Progression Register/ Database shall be reviewed daily by the Purchase Officer/ Progress
Assistant and a weekly report sent to the Senior Commercial Manager / Purchase Manager giving
details of
i) Indents where enquiries are not issued in time
ii) Quotations not received as per due date
iii) Price comparative statement not made within six (6) working days after tender opening
iv) Purchase Proposals / Purchase Orders not raised for more than 10 working days
v) Files pending for more than 7 working days with outside Department
vi) Cases where Import Clearance has been received within 3 weeks
11.4 Purchase Order Progression Register/ Database
11.4.1 All Purchase Orders issued shall be entered in the Purchase Order Progression Register/ Database.
The register/ Database shall have the columns as given in Annexure–26.
11.4.2 The register/ Database shall be reviewed by concerned officer. Letters/Fax/e-Mail reminders shall
be sent at least 8 weeks in advance of scheduled delivery date in the case of foreign suppliers and
4 weeks in advance in the case of indigenous suppliers. A report is to be sent to the Commercial
Manager/Purchase Manager in respect of the following:
a) Where Order Acknowledgements are not received within 30 days in respect of foreign suppliers
and 15 days in respect of local suppliers.
b) Where Letter of Credit require revalidation / extension
c) If supplies are overdue by more than 2 weeks
d) Inspection reports not finalised within 2 weeks after receipt of items
e) Details of rejections / refund of amount paid for rejected materials
f) Suppliers’ bills outstanding for payment more than 15 days.
11.5 Extension Of Delivery Period
If the supplies are not affected within 2 weeks after the delivery date or if the suppliers ask for
extension of time, the attention of the authority who signed the order shall be drawn. Action for
necessary Purchase Order Amendment shall be taken in accordance with para on “Purchase Order
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Amendment” (para 8.7). While granting extension of delivery time, financial implications shall be
examined and financial concurrence obtained where it involves financial implications.
11.6 Cancellation of Orders and Penalty
For cancellation of order the approval of the CFA shall be obtained. Before imposing any penalty less
than what has been laid down in the General Terms and Conditions of Supply the approval of CFA
shall be obtained.
11.7 Settlement of Vendors Bills
In order to maintain credibility and project a proper image of the Company, it is of utmost importance
that the bills of the vendors are paid in a reasonable time. Purchase Department being the sole
contact point, it is necessary that the Purchase Department takes the responsibility of arranging
timely payments by coordinating with Inspection, Stores and Finance Departments, for movement of
the necessary documents for releasing the payments. A committee of finance, purchase and stores to
review the pending bills and ensure payment by resolving all the issues. Payment can be made based
on computer generated / scanned signed invoice. Ink signed invoice need not be insisted. Partial
payment for accepted items / quantity can also be processed.
11.8 Retirement of Documents through the Bank
11.8.1 The Purchase Department ensures that the advices such as FLSC, etc., are collected on a day-to-day
basis from the bank, scrutinize with the Purchase Order and recommends payments to the Finance
Department for preparing the cheques. The Purchase Department collects the cheques, hands over
to the Bank, retires the documents and forwards the same to the Stores for collection of the goods
from carriers such as Roadways / Railways / Airways. For a general guidance, the following time
schedule may be followed for retirement of the documents:
i) The Purchase Department will verify with reference to the terms of Purchase Order and issue
amendment where necessary, and forward the LSCs to the Finance Department preferably within
3 working days.
ii) Finance Department will send the cheques to the Purchase Department preferably within 2
working days.
iii) The Purchase Department will retire the documents from the Bank within one day.
iv) Purchase Department will forward documents such as LR / RR / AWB etc. to stores for collection
of materials on the same day / next day.
11.9 Direct Payments on Open Account and Balance Payments
11.9.1 It should be specified in the Purchase Orders that vendors should submit their bills to the Purchase
Manager. The Secretariat Department should be advised to deliver all the vendors’ invoices to the
Purchase Department. If some bills are received in Finance direct, the same should be redirected
immediately to Purchase Department.
i) The bills received by the Purchase Department are scrutinised with reference to terms of Purchase
Order and the Receiving Reports and then recommended for payment to the Finance Department
preferably within 3 working days from the date of receipt of the bills / Receiving Report.
ii) The Finance Department will release the payment preferably within 3 working days from the date
of receipt of the recommendation from Purchase Department.
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11.9.2 In case of any difficulty or delay in finalisation of Receiving Reports and for releasing payment by the
Finance Department, the matter has to be sorted out by mutual discussion by officers of concerned
Department. If the differences still persist, IMM should discuss with the Finance and if necessary with
the Head of Division so that the payment could be arranged without any delay. In order to achieve
this, the Purchase Department may establish a system of having weekly or fortnightly meetings with
Finance Department to resolve any outstanding problem.
11.10 Finalization of Receiving Reports :
It should be ensured that all the Receiving Reports are finalised within a period of fifteen (15) working
days and Head of the Divisions shall monitor the same for effective implementation.
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CHAPTER - XII
VENDOR EVALUATION
12.1 It is an important responsibility of the Purchase Department to establish and deal with reliable vendors
and this objective cannot be effectively met without a proper vendor rating system, the objective
of which shall be to determine how well the suppliers are meeting the quality, delivery and price
standards. Vendor rating provides the basis for comparing the performance of one vendor against
the other and for eliminating vendors who repeatedly fail to meet minimum acceptable standards.
For efficient rating of the supplier the relevant data has to be collected by Purchase, Inspection and
Stores and collated by Purchase for final evaluation.
12.2 Applicability
12.2.1 In the context of availability of limited resources, vendors shall be selected judiciously to derive
the utmost benefit of the vendor rating technique. Areas where the vendor rating shall be made
applicable:
a) More than one source of supply for the same product where performances can be compared and
the annual purchase value of a particular item are above Rs. 100, 000.
b) Items for which there are parallel rate / running contracts.
12.2.2 Areas like capital equipment, or purchase from licensors, proprietary purchases, purchase from
Government agencies or monopoly dealers are not amenable to vendor rating.
12.3 Frequency
Approved Vendors shall be rated at least once in a year as per their performance, based on Quality
Audit Reports or Quality records and their performance on previous supplies. Vendor rating exercise
may be carried out more often if necessary.
12.4 Rating
Vendor’s actual performance after the orders have been placed shall be recorded. This shall include
the quality of the product, delivery, after-sales-services, price, etc.
12.5 The responsibility of Vendor rating shall rest with Head of IMM group. A committee comprising of
members of IMM, Quality Assurance, Finance and Production Engineering Departments shall review
vendor performance based on price, delivery, quality and after-sales service. The committee shall
rate the performance level of each vendor on a scale of 100 considering weightage for each criterion
as follows: -
Criteria Weightage
Price 25
Response to Enquiries 4
Competitiveness of the Price 10
Acceptance of HAL Terms and Conditions 4
Terms of Payment (Direct Payment/ Sight Draft/Letter of Credit, confirmed
2
or un confirmed/ Advance)
Relaxation In Period of Validity of Quotes 5
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Delivery 25
Promptness in Delivery as per Schedule 10
Delivery without constant Follow Up 10
Response To emergent requests 5
Quality 40
Delivery of Quality Goods ;(i.e. conformity to Purchase Order in respect of
30
Part No., Specifications, Standards etc.
Completeness of documentations especially Test Reports etc. 10
After Sales Service 10
Promptness In dispatching Quality Documents/ attending to complaints/
5
replacement of Rejected Supplies
General Attitude In assisting HAL In settlement of Queries, Problems
5
raised during usage
Vendor Rating System
12.6 The performance evaluation committee shall meet at least once in a year to review vendors’
performance and rate them as per their recorded performances. The rating on each criterion shall be
in percentage. Final gradation shall be arrived at by multiplying percentage obtained by a vendor on
each criteria and weight-age assigned to the criteria. The records shall be maintained on computer.
Vendors should be classified as Class ‘A’ (performance rating better than 80%), ‘B’ (performance
rating better than 50%) and ‘C’ (performance rating less than 50%)
12.7 Areas needing improvement to be intimated to class ‘B’ vendors. Future enquiries shall not be sent to
Class ‘C’ vendors. However, in case the number of approved suppliers is limited, Class ‘C’ vendors
may also be contacted subject to approval of Head of Division.
12.8 The Purchase Officer shall watch the performance of the suppliers against each supply order.
12.9 The above are only guidelines. However vendor rating should be done based on the parameters
which are measurable in the ERP system and accordingly program is to be designed to generate the
report on vendor rating for a particular period.
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CHAPTER - XIII
BUDGETING
13.1 Purchase Budget
Purchase Budget comprises of Capital Budget, Revenue Budget and Foreign Exchange Budget.
Annual Budgets at the Divisional level shall be formulated by Finance in close co-ordination with
Purchase and Planning Departments. The Budget shall normally be compiled on a three year time-
frame by about November of each year, covering the revised estimate for current year, budget
estimate for the ensuing year, and forecast for the year after. On the basis of forecasts given by the
Planning, Design and other indenting departments, the Purchase Manager will consider the following
factors for compiling the Purchase Budget and forwarded to Finance.
13.2 Commitment Budget
a) Value of indents pending at the beginning of the year, which would be converted into Purchase
Order during the year and the following year.
b) The quantum of commitment expected to be made during the year and the following year, on the
basis of the forecast given by the indenting departments.
13.3 Expenditure Budget
13.3.1 The expenditure portion of the budget shall be compiled taking into account the following factors:
a) Suppliers that are likely to materialise during the year, the following year and the year after, out of
the commitments already made at the beginning of the year.
b) Suppliers that are expected against commitments to be made during the year, the following year
and the year after.
13.3.2 Purchase Budget shall be prepared by IMM/ Purchase and forwarded to the Finance, who shall
arrange to send the same to Corporate Office.
13.4 Capital Budget
13.4.1 This consists of three major heads viz. Plant, Machinery and Equipment, Civil Works and other Welfare items.
13.4.2 A detailed list of items proposed to be procured by the Division shall be submitted to the Corporate
Office with full justification for approval. The approved Budget contains the list of all items ultimately
approved for purchase. Where import of items is involved, the required Foreign Exchange provision
shall be indicated against such items in the Budget. Capital Budget shall be prepared by the Finance
in consultation with the concerned Departments and sent to Corporate Office.
13.5 Foreign Exchange Budget
This shall be derived on the basis of projections in the Capital and Revenue Budgets and shall indicate
the quantum of Foreign Exchange, both Free Foreign Exchange and for Capital as well as Revenue
requirements. The Budget so prepared shall be sent to the Corporate Office for consolidation and
projection to the Ministry. Foreign Exchange Budget shall be prepared by the Finance in consultation
with the concerned Departments and sent to Corporate Office.
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13.6 Responsibilities of Purchase Department
13.6.1 As soon as the budget is finalised, the Purchase Department shall obtain a copy of the approved
budget and the Head of the Department shall ensure:
i) that the purchase requests for the long lead items are received from the concerned department in
time and timely action is initiated by Purchase simultaneously to obtain offers, technical clearance
from import angle and processing of the application for foreign exchange release / issue of import
licence wherever necessary.
ii) to watch and take note of the progressive trends of Purchase Commitments and expenditure so
that timely action could be taken to put budget revision proposals. In order to easily collect the
commitment and expenditure data, the Purchase Manager shall carefully study the budget heads
and shall arrange the purchase requests, purchase orders and incoming receipt information in
line with the various budget heads. This would enable easy compilation of information for the
timely guidance and action by the concerned officers / departments.
13.6.2 Purchase Department in co-ordination with Accounts shall prepare a monthly return which shall show
the progress of commitments and expenditure vis-à-vis the projected budget estimates. The Head of
the Purchase Department shall study these returns and plan out the Purchase Department’s strategy
to achieve the budget targets and cases of serious deviation shall be brought to the notice of the
Head of Division and their intervention where necessary solicited.
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CHAPTER - XIV
LEGAL ASPECTS OF PURCHASING
14.1.1 Purchase order is a legal contract between the buyer and the supplier and under this contract; both
the parties have certain legal rights and obligations. Purchasing executives need to have a thorough
knowledge of all the relevant laws pertaining to purchasing. This knowledge helps them to structure
their agreement with the supplier properly. The main Acts but not restricted to, are the following :
i) The Sale of Goods Act, 1930.
ii) The Indian Contract Act, 1872.
iii) The Arbitration and Conciliation Act, 1996.
iv) The Partnership Act. 1932.
v) The Negotiable Instruments Act, 1881.
vi) The Companies Act, 1956.
vii) The Central Sales Tax Act, 1956.
vii) The Sales Tax Acts and Rules of various States.
viii) The Customs Act, 1962
ix) The Customs Tariff Act, 1975
x) The Control Excise Act, 1944
xi) The Central Excise Tariff Act, 1985
14.1.2 Unless a Buyer has basic knowledge of the legal aspects of purchasing he is likely to involve himself
and the Company into legal complications which have to be avoided. The objective of this chapter is
to make him familiar with some of the important legal aspects of purchasing.
14.3 Application of Law of Agency
14.3.1 The basic authority for the acts of the Buyer is derived from the Law of Agency which gives him
the authority to act for his Company. It is, therefore, necessary for the Buyer to know the amount of
authority delegated to him for transacting business as the agent of the Company.
14.3.2 As in the case of the Buyer, Sellers and their staff similarly hold the status of selling agents for their
firms. To ensure that a satisfactory contract has been executed, the Buyer must insist upon the
acceptance of the offer by an authorised Company official.
14.3.3 While signing a contract, Buyer shall specially indicate on the document that he is acting in the
capacity of agent for his firm and to avoid any possible misunderstanding between the Buyer and
Seller as to who are the parties to the contract. Moreover, all information to be included as part of the
contract shall appear above the agent’s signature. It has been held by courts that the data appearing
below the signature is for information only and therefore, does not form part of the contract.
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14.4 General Principles of Law of Contract
In Law, Contract is an agreement which is enforceable by Law. All contracts are agreements but all
agreements are not contracts. For, an Agreement may be for an illegal object or may be between
parties who are not capable of entering into it or it may be entered into through mistake common to
both the parties.
14.4.1 “Consensus ad-idem” means that both the parties must understand the same thing in the same
sense. This is an essential prerequisite of a valid contract. In order to determine the existence of
“Consensus ad-idem” it is usual to employ in a given contract the language of offer and acceptance.
14.5 Purchase Contract
14.5.1 The Buyer’s major responsibility is to ensure that Purchase Contract is properly drawn and is legally
binding on the Supplier. To make it enforceable by Law, the Contract must contain the following four
basic elements:
a) Agreement (meeting of the mind) resulting from an offer from a Supplier and acceptance from the
Buyer to be understood in the same sense.
b) Consideration or obligation in the same form
c) Parties shall be competent to enter into contract
d) Purpose of the contract must be lawful
14.6 Offer and Acceptance
14.6.1 When a Buyer sends a Purchase Order to a Supplier, this act constitutes legal offer to buy materials in
accordance with the terms set out on the order. Agreement does not exist however, until the Supplier
accepts this offer in terms of the order. In the event of the Buyer requesting for a quotation from the
Supplier, the Supplier’s quotation constitutes an offer. Agreement then exists when the Buyer accepts
the quotation. Mere acknowledgement of offer does not constitute acceptance nor does silence
constitute acceptance.
14.6.2 Under Sale of Goods Act, the Supplier has every right to revoke his offer at any time before it is
accepted. The offer remains effective until it is rejected or the Supplier makes a counter - offer or
until the period of offer is valid, and if that is not mentioned, until a reasonable period after the offer
is made has elapsed (30 - 90 days).
14.6.3 When a Supplier accepts an order by using his own acceptance form which contains selling terms
different from those in the order, legally it is considered as a counter - offer which terminates the
Buyer’s original offer and therefore, no agreement exists until the Buyer and the Seller agree upon
terms which are mutually acceptable and incorporate them in a new offer and acceptance.
14.6.4 It has been seen that in practice such conflicts of terms frequently occur but are not resolved.
Perhaps in most of the cases, the Supplier is able to deliver the materials according to the terms and
conditions of the order. But if problem arises before dispatch against such an order, the Buyer may
well find that in fact he has legally no valid contract with the Supplier.
14.6.5 If a problem arises after the Buyer receives and accepts the material, the Law considers the Buyer
to have accepted the counter - offer when he has accepted the material. It is, therefore, necessary
that every Buyer shall examine the Supplier’s acceptance and try to reconcile with him any significant
differences in contractual terms.
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14.7 Consideration
14.7.1 In addition to meeting of minds a valid contract must also contain an element of obligation. Most
purchase contracts are bilateral. The Buyer promises to buy from the Supplier certain material at a
stated price and the Supplier promises to deliver the material in accordance with the stated contract
conditions. What is important is the mutuality of obligation. The contract must be drawn in such a way
that each party is bound by the contract. In Law, even if one party is not bound, there is no contract.
In a Purchase Order the Buyer must mention the quantity, price, delivery in a very specific language
so as to bind the Supplier for proper performance of the contract.
14.8 Competent Parties
14.8.1 A valid contract must be made by persons who are competent to contract. The Buyer exceeding his
actual or apparent authority in making a contract shall absolve his company from the implications of
the contract but he himself shall become liable for the consequences. The contract made by a minor
or by an insane or intoxicant person is usually void able under law.
14.9 Legality of Purpose
14.9.1 A contract whose purpose is illegal is automatically void and not enforceable by law. A contract whose
primary purpose is legal, but one of whose ancillary terms is illegal may be either void depending
upon the seriousness of the illegality. For example, if a Buyer purchases material at price which
violated restraint of trade or price discrimination laws like Essential Commodities Act in India, the
Contract would be legally void.
14.10 Special Legal Considerations - Inspection Rights
14.10.1 If the Buyer has not previously inspected the material purchased to ensure that it conforms to the
terms of the contract, the Law gives him a reasonable period of time to inspect the material after it is
received. If the Buyer raises no objection to the material within a reasonable period of time (15 - 30
days) he is deemed to have accepted it.
14.11 Right of Rejection
14.11.1 The Buyer has the right to reject material if it does not conform to the terms of the contract. If an
excess supply is received, the Buyer can either reject the complete supply or he can reject the quantity
in excess of the contract. When the Buyer does not wish to accept wrongly delivered material, he is
required only to notify the Supplier and he is not legally bound to return the rejected material. If he
neither returns the material nor notifies the Supplier of his rejection within a reasonable period of time,
he is then obliged to pay for the material.
14.12 Order Cancellation and Breach of Contract
14.12.1 If a Supplier fails to deliver the goods against an order by the delivery date agreed in the order or if
he fails to perform in accordance with the contract conditions, he commits breach of contract. The
breach generally gives the Buyers a right to cancel the order. The time of delivery can, however, be
extended by the consent of both the parties and on such terms as agreed to by them. At the time
of granting of such extension of time for delivery, reservation could be made in respect of future
increases in freight, custom duty, excise, sales tax, etc.
14.12.2 Where the order is cancelled, the Buyer can in addition sue the Supplier for the damages if he wishes.
In case of delivery failure, if the Buyer subsequently purchases the material from elsewhere the
damages are generally limited to the difference between the contract price and the price paid to the
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new supplier. Any or all damages recoverable under this head is only ‘actual’ damages suffered and
not punitive or exemplary damages.
14.12.3 For re-purchase or risk purchase at the expense of defaulting Supplier the following conditions shall
be fulfilled:
a) The Stores re-purchased shall be identical with the stores originally ordered.
b) The re-purchase shall be made within a reasonable time (6 months) after the date of breach or
within the time stipulated in the contract.
c) The defaulting Contractor shall be served with notice of re-purchase.
d) The re-purchase shall be on the same terms as in the case of original contract.
Note: Risk purchase loss shall be recovered only after the re-purchase contract has been executed.
14.12.4 It may also happen in some cases that a Buyer is compelled to cancel the order before the material
is supplied. In such a case the Buyer breaches the purchase contract. This act is called ‘Anticipatory
Breach’ and it makes the Buyer liable for any resultant injury to the Supplier. However, if the
cancellation does not harm the Supplier, he cannot collect any damages. There will be cases where
the cancellation of the order is due to factors beyond the control of the Buyer like labour strike in the
factory of the Buyer, act of God, war etc. In such cases, the Seller has to accept the cancellation.
14.12.5 It is evident at the time a major contract is drawn that breach of contract would severely injure one or
both parties and that damage would be difficult to determine. It is wise to include in the contract itself
a termination or liquidated damages provision. Such provisions stipulate in advance the procedures
to be used in determining costs and damages.
14.13 Patent Infringement
14.13.1 The Law gives a patent holder the exclusive right to manufacture, sell and use his patented item
for a specified number of years. If an industrial purchaser engages in any of these activities during
the period of patent protection without permission from the patent holder, he is guilty of patent
infringement and can be sued for damages by the patent holder.
14.13.2 Buyers frequently have no way of knowing whether their Suppliers are selling patented materials with
or without authorisation from the patent holder. If a Buyer unknowingly buys an items from a Supplier
who has infringed the patent holder’s rights, the Buyer is also guilty of infringement if he uses the
item. To protect against such unintentional violations, most companies include a protective clause
in their purchase orders which states that the Seller shall indemnify the Buyer for all expenses and
damages resulting from patent infringement. Clauses of this type do not prevent the patent holder
from suing the user. If properly stated, however, they can require the Seller to defend the user in such
legal proceedings and can give the user legal recourse to recover any resulting losses from the Seller.
14.14 Honest Mistakes
14.14.1 When an honest mistake is made in drawing a Purchase Contract, the conditions surrounding such
specific case determine whether the Contract is valid or void. As a general rule, mistakes made by
only one party does not render the Contract void, unless the other party is aware of the mistake. For
example, a quotation is submitted by a Supplier and he intends to quote a price of Rs. 260 per unit
and through an error - may be typographical error - the price typed as Rs. 250 is transmitted to the
Buyer. In such cases Courts have held that if the Buyer accepts the offer without knowledge of the
error, a valid contract exists. On the other hand, if the price of Rs. 250 is incorrectly typed as Rs. 150
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or Rs. 15 the Court would probably hold that a competent Buyer should recognise such an error and
if one party knows or should know of other’s error, the contract is void. However, a Buyer or Seller
shall not assume that a mistake, however, innocent, will release him from a contractual obligation. In
the majority of cases, it will not do so.
14.15 Conclusion
14.15.1 The purpose of this chapter is to make the Buyer alert and alive to the legal responsibilities involved
in his job. It is not necessary that a Buyer should be a legal expert. But at the same time, the Buyer
should know as to when to seek sound legal advice whenever any legal problems arise. He is also
supposed to know the legal aspects of purchasing to the extent that in his job he does not hurt
himself or his company. The best thing for a Buyer is to avoid legal problems by using his skill in
selecting sound, co-operative and reliable Suppliers. He shall also use his skill in settling disputes by
negotiations.
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CHAPTER - XV
ETHICS OF PURCHASING
15.1 Relationship with the suppliers
15.1.1 In all their dealings and transactions, the personnel of the Purchase Departments shall conduct
themselves in an exemplary manner in keeping with the best interest, dignity and tradition of the
Company and their profession. In this connection, the ‘Code of Conduct & Ethics’ adopted by the
Indian Institute of Materials Management, which is reproduced below, shall serve to guide their
actions.
a) To consider first, the TOTAL interest of one’s organisation in all transactions without impairing the
dignity and responsibility of one’s office.
b) To buy without prejudice, seeking to obtain the maximum ultimate value for each Rupee of
expenditure.
c) To subscribe and work for honest and truth in buying and selling, to denounce all forms and
manifestations of commercial bribery, and to eschew anti - social practices.
d) To accord a prompt and courteous reception, so far as conditions will permit, to all who call upon
a legitimate business mission.
e) To respect one’s obligations and those of one’s organisation, consistent with good business
practices.
15.2 Filing System
15.2.1 The procurement files are very important and sensitive documents and thus there is a need to have
a single file system with proper page numbering. In case of urgency, if opening of the part files is
unavoidable, the same should thereafter be merged with the main file. The decisions and deliberations
of the individuals or the Tender Committees also need to be properly recorded and well documented.
The filing system must ensure accountability.
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CHAPTER - XVI
GRIEVANCE REDRESSAL
16.1 Any bidder or prospective bidder aggrieved by any decision, action or omission of the procurement
process may within a period of 10 days or such other period specified in the pre-qualification
documents, Vendor registration documents or Tender documents, from the date of such decisions,
make an application for review to the concerned division clearly giving the specific ground or grounds
on which the vendor feels aggrieved. The application for review can be filed only by the bidder or
vendor who has participated in the tender.
16.2 In case of two bid system, application for review related to the financial bid can be filed only by the
vendor whose technical bid is found acceptable.
16.3 The official to whom the application for review has to be addressed shall be indicated in the
pre-qualification documents, vendor registration documents or tender documents as the case may
be. Based on this application for review, decision on whether the tendering process should be
suspended pending disposal of the application should be decided by the procurement agency.
16.4 After examining the application and the available documents, procurement agency may decide
on the relief to be considered appropriate to the applicant and communicate its decision to the
applicant and to the other bidders or prospective bidders. The application for review should be dealt
as expeditiously as possible.
16.5 The grievance application should be reviewed at a level of Head of IMM or by an Officer not less than
rank of DGM nominated by the divisional head for proposals where CFA is Head of the division.
16.6 Incase of CFA is CEO; the grievance application shall be reviewed by Head of Division. In case of CFA
is CMD/PSC/ Board, the grievance shall be reviewed by concerned CEO.
16.7 Grievance Redressal Committee
16.7.1 If the grievance application is not disposed of within the allowed time, or if the bidder feels aggrieved
by the decision, the bidder can file an application for redressal by the concerned procurement
redressal committee within 15 Days of expiry of date of receipt of the decision., Redressal committee
to be constituted at complex level with Head of Finance, HR from complex and Head of division
concerned where CFA is Divisional Head. Redressal committee at corporate level to be constituted
with Head of Finance-CO, nominated member from Head of HR-CO and Head of IMM-CO where CFA
is CEO/CMD/PSC/Board.
16.7.2 The decision of the Grievance redressal committee is final.
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CHAPTER - XVII
REQUIREMENT OF PROFESSIONAL STANDARDS AND TRAINING
17.1 All personnel dealing with procurement are required to undergo training on the procurement
procedures and guidelines issued by HAL from time to time to achieve professional standard in their
work. Only personnel who have undergone training are to be authorized to deal with procurement
process. Training of at least one week to be imparted to the personnel under the supervision of an
officer of IMM department nominated by Head of Department of IMM of the Division/Complex/Corp.
Office as may be applicable.
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CHAPTER - XVIII
INTERPRETATION OF PURCHASE PROCEDURES
18.1 Action Taken in Good Faith
`The procedure prescribed in the purchase manual is to enable the persons involved in the procurement
process to have a fair and transparent procurement giving equal opportunity to all the vendors.
Considering that procurement is a complex process and every procurement being unique, all possible
conditions cannot be foreseen and defined in the Purchase procedure. The Purchase Manual is for
guidance and provides broad frame work of policy. Persons associated with procurement process
are expected to take decisions in a given situation and move forward at the same time taking due
care and attention in their action. All persons involved in procurement process shall be considered
acting in good faith (done with due care and attention), unless proved otherwise, in discharge of
procurement function. In such a case, they are not liable for any disciplinary proceedings for decision
taken following the guidelines of the purchase procedure and material information available with
an intent to make the items/service available to ensure uninterrupted production, meet the delivery
commitments and in the interest of the company.
18.1.1 Such decision taken by the persons associated with the procurement need to be recorded with
appropriate reasons and justification.
18.2 Interpretation for unique situations
18.2.1 Keeping the objective of timely procurement of items and services to enable timely delivery of
companies’ product in the most competitive price, there could be need for interpretation of the purchase
procedures for peculiar situations faced during procurement process to meet urgent requirement.
Under these circumstances the decision taken in good faith by the Material procurement committee
and approved by Complex Head is considered as final. The material procurement committee at
divisional level to be constituted with Head of the division, Head of Finance, Head of IMM, Head of
Quality and Head of planning. Such interpretation / decision will have to be communicated to IMM,
Corporate office who in turn will review the interpretation for considering implementation across
the Company with the approval of competent authority in case such interpretation found to be
commercially and procedurally in order.
18.3 Clarification on Procurement Procedure
Clarification to the laid down procurement procedure will have to be referred to CO-IMM through
Division / Complex comments along with clear recommendation for CO clarification. A Policy
Monitoring Committee in Corporate Office under IMM will review the clarifications and provide its
recommendation. If any amendment to the Purchase procedure, if considered required the same will
be put up to Management Committee (MC).
18.4 This manual supercedes all previous purchase manuals, guidelines and material management
circulars issued by Corp. Office with regard to purchase procedures (except at references listed at
reference-5). Any further Changes to the purchase procedure will have to be issued in the form of
amendments and material management circulars by IMM, Corporate office. No other document or
clarifications by any other agencies will be applicable for following purchase procedure.
18.5 The manual will be reviewed every five years.
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CHAPTER - XIX
GLOSSARY OF PURCHASE TERMS
1. ABANDONMENT
Refusal to receive freight so damaged in transit as to be worthless and render carrier liable for its
value.
2. ABSORPTION
The assumption by a carrier of switching or other special charges without increasing the charge to
the shipper.
3. ACKNOWLEDGEMENT
A form used by a vendor to advise a purchaser that his order has been received. It usually implies
acceptance of order.
4. AD-VALOREM (ACCORDING TO VALUE)
Ad-valorem is usually applied to a customs duty charges upon the value only of goods that are
dutiable, irrespective of quality, weight or other considerations. The ad-valorem rates of duty are
expressed in percentage of the value of the goods, usually ascertained from the invoice.
5. ADVICE OF SHIPMENT
A notice sent to purchaser advising that shipment has gone forward and usually containing details of
packing, routing etc.
6. AFFIDAVIT
A written statement sworn to before a notary.
7. AFTER SIGHT
An expression used on bills of exchange and meaning “after presentation to the drawee for
acceptance”.
8. AGENCY
The term “agency” signifies relations existing between two parties by which one is authorized to
perform or transact certain business for the other; also applies to the office of the agent.
9. AGENT
One acting for another, called principal, in dealing with third party.
10. ANCILLARY INDUSTRIAL UNDERTAKINGS
An industrial undertaking which is engaged or is proposed to be engaged in the manufacture or

production of parts, components, sub-assemblies, tooling or intermediates, or the rendering of
services and the undertaking supplies or renders or proposes to supply or render not less than 50 per
cent of its production or services, as the case may be, to one or more other industrial undertakings
and whose investment in fixed assets in plant and machinery whether held on ownership terms or
on lease or on hire-purchase, does not exceed Rs 10 million. Definition of Ancillary, Micro, Small and
Medium Industry may be referred at www.dcmsme.gov.in of Ministry of MSM Enterprises, GOI.
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11. ARBITRATION
The investigation and decision of a cause or matter between parties in controversies, by chosen
persons.
12. ARRIVAL NOTICE
A notice sent by the carrier to the consignee advising of the arrival of the shipment.
13. AS IS
A term indicating that goods offered for sale are without warranty or guarantee. The purchaser has no
recourse on the vendor for the quality or condition of the goods.
14. ASSIGNED SIDING
A side or team track owned by a carrier and assigned to one or several industrial concerns for loading
or unloading.
15. ASSIGNMENT
Transference of some property right or title to another party. This team is frequently used in connection
with bills of lading, which are endorsed (assigned) over, to another party (the assignee) by the owner
of the bill (assignor). Such endorsement gives to the party named the title to the property covered by
the bill of lading.
16. ASTRAY FREIGHT
Freight bearing marks indicating owner and destination, but separated from the waybill.
17. AUTHORISED DEVIATION
A permission to a supplier authorizing the production or delivery on a restricted basis of items not in
conformance with the applicable drawings or specifications.
18. BACK ORDER
That portion of an order which the vendor cannot deliver at the scheduled time and which he has re-
entered for a shipment at a later date.
19. BID
An officer, as a price, whether for payment or acceptance. A quotation specifically given to a

prospective purchaser upon his request, usually in competition with other vendors. An offer, by a
buyer to vendor, as at an auction.
20. BILL
A form used by a carrier as an invoice showing consignee, consignor, description of shipment, weight,
freight rate, freight charges and other pertinent information about goods being transported.
21. BILLED WEIGHT
The weight on the basis of which charges are assessed by the carrier and shown in freight bill and way bill.
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22.A. BILL OF ENTRY
22.A.1 The detailed statement by the importer of the nature and value of goods entered at the custom house
and used for clearance purposes.
22.A.2 Consignee to see goods before paying duties. Such inspection is made in the presence of a custom
officer and is requested by an importer for the purpose of obtaining details which will enable him to
prepare a correct Bill of Entry. This letter document must be completed within three days of the Bill of
Sight; otherwise goods are removed to Government warehouse.
22.B BILL OF LADING
22.B.1 The straight bill of lading is a non-negotiable document and provides that a shipment is to be delivered
direct to the party whose name is shown as consignee. The carriers do not require its surrender upon
delivery except when necessary that the consignee by identified.
22.B.2 The order bill of lading is negotiable. Its surrender, endorsed by the shipper, is required by the carriers
upon delivery, in accordance with the terms thereon. The object of an order bill of lading is to enable
a shipper to collect for his shipment before it reaches destination. This is done by sending the original
bill of lading, with draft drawn on the consignee, through a bank. The drawee, or the one to whom
delivery is made, receives the lading upon payment of the draft and surrenders it to the carrier’s agent
for the shipment of goods. It is customary for shipper, when forwarding goods on this form of lading,
to consign the shipment to himself to be delivered only upon his order, destination the person or firm
to be notified of its arrival at destination.
22.B.3 An export bill of lading is one indicating that a damage or shortage existed at the time of shipment.
22.B.4 An ocean bill of lading is one issued by an ocean carrier for marine transport of goods.
23. BONDED WAREHOUSE
Place owned by persons approved by the secretary of the Treasury and who have given guarantees
or bonds for the strict observance of revenue laws. Such warehouses are used for the4 storage and
custody of import merchandise, subject to duty, until the duties are paid or the goods reshipped
without entry.
24. COST AND FREIGHT
A term used when goods are to be conveyed by ocean marine transportation and meaning that the
price stated includes both the cost of the goods and the transportation charges to the named point
of destination. The seller is liable for the ocean freight charges and for all risks and other charges until
he has received a clean ocean bill of lading from the carrier (either a “received for shipment” or an
“on board”, as agreed between seller and buyer) at which point title passes to the buyer. The buyer is
liable for all risks and charges, except ocean freight, after title has passed. The buyer is responsible
for arranging for insurance on the goods from the point of ocean shipment.
25. CARGO
The freight transported in a vehicle. The load for transportation as differentiated from things carried
as operating equipment and supplies for the conveyance.
25.1 CARGO (MAINFEST)
A document listing all cargo consignments on board a truck, vessel, or aircraft, and giving the quantity,
identifying marks, consignor and consignee of each item.
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26. CARTAGE
Drayage; a charge for local hauling.
27. CARTON
This term is usually applied to the interior package commonly used to enclose cereals, dried fruit,
sugar, soap etc. A carton is not normally a shipping container and is not intended by itself to meet
shipping requirements and regulations.
28. CASH IN ADVANCE
Same as “cash with order”.
29. CASH ON DELIVERY
Abbreviation-C.O.D. Payment due and payable upon delivery of goods.
30. CASH WITH ORDER
Payment accompanies order when given to seller.
31. CERTIFICATE OF COMPLIANCE
A supplier’s certification to the effect that the supplies or services in question meet certain specified
requirements.
32. CERTIFICATE OF DAMAGE
A document issued by dock companies in regard to merchandise received or unloaded in a damaged

condition.
33. CERTIFICATION OF ORIGIN
A certified document as to the origin of goods.
34. CERTIFICATE OF WEIGHT
An authoritative statement of the weight of a shipment.
35. CERTIFIED BILL OF LADING
An ocean bill of lading certified by a consular officer to meet certain requirements of his country as
to goods imported.
36. CHANGE ORDER
The purchaser’s document used to amend a purchase transaction previously formalized by a purchase
order.
37. COST, INSURANCE AND FREIGHT
Similar to C & F, except that the cost of ocean marine insurance is also for the account of the seller.
“War Risk” insurance is not for the seller’s account unless otherwise agreed upon between the parties.
38. CLEARANCE
A customs house certificate that a ship is free to leave, all legal requirements above and beside tracks
and highways, where they pass through tunnels, under the over-bridges and when published are
known as “clearance tables”.
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39. COMPETITIVE BIDDING
The offer of estimates by individuals or firms competing for a contract, privilege or right to supply
specified services or merchandise.
40. COMPROMISE
An agreement between two or more persons, to settle the matters of controversy without resort to
litigation.
41. CONCEALED DAMAGE
Damage to the contents of a package which is in good order externally.
42. CONCEALED LOSS
A loss from a package bearing no indication of having been opened.
43. CONDITIONAL SALE
A sale in which title is retained by the vendor as security for the purchase price, although possession
is surrendered to the buyer.
44. CONFIRMING ORDER
A purchase order issued to a vendor listing the goods or services and terms of an order placed
verbally, or otherwise, in advance of the issuance of the usual purchase document.
45. CONSIDERATION
Something of value given for a promise to make the promise binding of “binder”, “earnest money”.
46. CONSIGNEE
The person or organization to whom a shipper directs the carrier to deliver goods. Such person or
organization is generally the buyer of goods and is called a consignee on a Bill of Lading.
47. CONSIGNEE MARKS
A symbol placed on packages for export generally consisting of a square, triangle, diamond, circle,
cross etc. with designated letters and/or numbers for the purchase of identification.
48. CONSIGNMENT
Goods shipped for future sale or other purpose, title remaining with the shipper (consignor), for which
the receiver (consignee), upon his acceptance, is accountable. Consigned goods are a part of the
consignor’s inventory until sold. The consignee may be the eventual purchaser, may act as the agent
through whom the sale is affected, or may otherwise dispose of the goods in accordance with his
agreement with the consignor.
49. CONSIGNOR
The person or organization who delivers freight to a carrier for shipment is called a consignor or
shipper and is the one who directs the bill of lading to be executed by the carrier. Such a person or
organization may be the consignor – consignee, if the bill of lading is made to his own order.
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50. CONTAINER
An item in which or around which another item or items are kept and maintained as an entity, mainly
for shipping or issue purposes. Examples: barrel, bottle, can, drum, reel, spool etc.
51. CONTRACT
A deliberate agreement between two or more competent persons to perform or not to perform a
specific act or acts. A contract may be verbal or written. A purchase order, when accepted by a vendor,
becomes a contract. Acceptance may be either in writing or by performance, unless a purchase order
requires acceptance thereof to be in writing, in which case it must be thus accepted. A unilateral
contract is one where only one party promises performance, the performance being exchange for an
act by the other. A bilateral contract is one where both parties promise performance, each promise
being given in exchange for the other.
52. CONTRACT DATE
The date when a contract is accepted by all parties thereto.
53. CONTRACTOR
53.1 Any of the parties to a contract.
53.2 One who contracts to perform work or furnish materials in accordance with a contract.
54. CUSTOMS (DUTIES)
Customary taxes, tools, or duties levied upon goods which pass a frontier, generally upon goods
imported.
55. CUSTOMS TARIFF
A schedule of charges assessed by the Government of imported or exported goods.
56. DAMAGES
Compensation, usually in money, for injury to goods, person, or property.
57. DELIVERY
The transfer of possession; as applied to shipping, it occurs when lading is surrendered and title to
goods passes to the received or consignee.
58. DELIVERY SCHEDULE
The required for agreed time or rate of delivery of goods or services purchased for a future period.
59. DEMURRAGE
A charge, allowed in tariffs, or by contract, assessed against a consignor, consignee, or other

responsible person for delays to transportation equipment in excess of “free time” for loading,
unloading, reconsigning, or stopping in transit.
60. DEPRECIATION
Decline in value of capital asset through wear and tear, age, inadequacy, and obsolescence without
loss of substance
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61. DESICCANT
A material which will absorb relatively large amounts of water vapour and which is used to protest
against deterioration items which are harmed by prolonged exposure to humid conditions, often
placing the item and the desiccant in one protective container or wrapper.
62. DISCOUNT
62.1 An allowance or deduction granted by the seller to the buyer, usually when certain stipulated conditions
are met by the buyer, which reduces the cost of the goods purchased. However, discounts may be
granted by the seller without reference to stipulated conditions. An example of such use of discount
is the application of discount to a nominal or “list” price to establish the “net” or actual price.
62.2 An arbitrary discount is one agreed upon between vendor and purchaser which have no relation to
the vendor’s usual basis for discount.
62.3 A broken discount is one applying on a quantity of goods less than the quantity contained in a
vendor’s regular package.
62.4 A cash discount is an allowance extended to encourage payment of invoices on or before a stated
date which is earlier than the NET date. The percent of discount allowed is as agreed between buyer
and seller and is often established by industry or trade custom. Usual discounts are ½, 1, and 2
percent with occasional discount allowances to 10 per cent.
62.5 A quantity discount is an allowance determined by the quantity or value of a purchase.
62.6 A standard package discount is one applying to goods supplied in the vendor’s regular package.
62.7 A trade discount is a deduction from an established price for items or services, often varying in
percentage with volume of transactions, made by the seller to those engaged in certain business and
allowed irrespective of the time when payment is made.
63. DISPOSAL
The act of getting rid of excess or surplus property, Disposal may be by, but not limited to, sale,
donation, abandonment, destruction, or transfer to others.
64. DISTRIBUTOR
A purchaser who acquires goods for resale to a wholesaler, retailer, or ultimate consumer. A distributor
may sell goods from his own inventory, from a consignment inventory in his possession, or may sell
for shipment to be made directly from the manufacturer’s stocks.
65. DIVERSION
A change made in the designation of consignee, destination, or route of a shipment while in transit,
reconsignment.
66. DUE BILL
A bill rendered by carrier for under charges.
67. e. and o.e. (ERRORS AND OMISSIONS EXCEPTED)
An abbreviation sometimes placed on a quotation or invoice by a vendor to reserve the right to

correct the amount charges if later found to be incorrect.
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68. EARNEST MONEY
“Earnest Money” is a term used to describe money that one contracting party gives to another at
the time of entering into the contract in order to “bind the bargain” and which will be forfeited by the
donor if he fails to carry out the contract. Generally, in real estate contracts, such money is used as
part payment of the purchase price of “binder”.
69. EMBARGO
An order issued by a carrier, or their agent, or by a government, prohibiting the acceptance of freight,
in any kind or of a specific nature, for shipment; generally applying to certain areas, or to and from
particular points, and resulting from congestion, labour troubles, etc., in marine usage, a detention of
vessels in port, a prohibition from sailing.
70. EN ROUTE
On the way; in transit.
71. ENTRY (CUSTOMS)
A statement of the kinds, quantities, and values of goods imported together with duties due, if any,
and declared before a customs officer or other designated officer.
72. ESCALATION
An amount or per cent by which a contract price may be adjusted if specified contingencies occur,
such as charges in the vendor’s raw material or labour costs.
73. ESCROW
An agreement under which a guarantor, promiser or obliger places a sum of money or the instrument
upon which he is bound which a third person, called escrow holder, until the performance of a
condition or the happening of an event stated in the agreement permits the escrow holder to make
delivery of the money or instrument to the guarantee, promisee, or obligee.
74. EX
A prefix meaning “out of” or “from”. Used in conjunction with a noun of location, such as ex-mill, ex-
mine, ex-warehouse. “Ex (named point of origin)” means that all charges for transportation and all
risks of loss and damage are for the account of the buyer when the goods are delivered to a carrier
at the “ex” location. Where local cartage costs are incurred between the “ex” location and a common
carrier receiving point, such costs are for the buyer’s account. On ocean marine shipments, the term
“ex dock (named port of importation)” means all transportation costs, all insurances, risks of loss and
damage, export and import duties, taxes, and levies, consular and entry fees are for the account of
the seller. Title of passes to the buyer either when he takes possession of the goods at point of import
or when the free time allowed on the dock at the point of importation expires, whichever occurs first.
75. EXCESS FREIGHT
Freight in excess of amount billed; also called “over” freight.
76. EXCISE DUTY
A tax imposed on the manufacture, sale, or consumption of a product.
77. EX PARTE (LATIN)
“From only one side or party”.
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78. EXPEDITE
To hasten, or to assure delivery of goods purchased in accordance with a time schedule, usually by
contract by the purchaser with the vendor.
79. EXPORT
To send goods to a foreign country.
80. EXPORT DECLARATION
A form required by the U.S. treasury Department and filled out by a shipper showing the value,
weight, consignee destination etc. of shipments to be exported.
81. EXPORT LICENCE
A certificate granting the holder permission to export goods.
82. EXPRESS WARRANTY
When a seller makes some positive representation concerning the nature, quality, character, use and
purpose of goods, which induces the buyer to buy and the seller intends the buyer to rely thereon,
the seller has made an express warranty.
83. FACTOR
A factor is an agent for the sale of merchandise. He may hold possession of the goods in his own or
principal’s name. He is authorized to sell and to receive payment for the goods.
84. FAIR MARKET VALUE
The term f.a.s. must be qualified by a named port. The seller is liable for all charges and risks until
the goods sold are delivered alongside a vessel at such port or are delivered to the port on a dock
which will be used by the vessel. Title passes to the buyer when the seller has secured a clean dock
or ship’s receipt for the goods.
85. FIFO
First in, first out, the first put in is taken out first instead of the last in, especially in case lifed items.
86. FIRM OFFER
A definite proposal to sell something on stated terms, such offer binding the proposer up to stipulated
time expiration. A “firm bid” is a similar proposal to buy something. Although both are referred to
colloquially as “firm offers”, the distinction between bids and offers is usually preserved in cable codes.
87. F.O.B. (FREE ON BOARD)
The term means the seller is required to place the goods aboard the equipment of the transporting
carrier without cost to the buyer. The term “f.o.b.,” must be qualified by a name of location, such
as shipping point, destination; name of a city, mill, warehouse, etc. The stated f.o.b. point is usually
the location where title to the goods passes from the seller to the buyer. The seller is liable for
transportation charges and the risks of loss or damage to the goods up to the point where title passes
to the buyer. The buyer is liable for such charges and risks after passing of title.
88. FOLLOW-UP
To review a transaction to determine its status. In connection with purchase transactions often
synonymous with “expedite”
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89. F.O.R. (FREE ON RAILS)
A term meaning that seller will make delivery as far as the railroad terminal named, or in case of
overseas shipment, in harbour at port of departure, name of port stated. To avoid misunderstanding,
equivalent of “f.o.b. vessel ( )”, or “f.a.s. vessel ( )”, the phrase is amplified further thus, “f.o.r.
cartage to vessel extra”.
90. FORWARDER (FREIGHT)
A commercial organization engaged in the business of consolidating less-than-carload, less-than-

truckload or less-than-planeload shipments and making arrangements for their transportation in
carload, truckload, or planeload lots under applicable tariffs.
91. FREE GOODS
Goods not subject to duty.
92. GOOD TITLE
A title free from encumbrances such as mortgages and liens.
93. GROSS NEGLIGENCE
The want of even slight care or “due care”.
94. HEAVY-LIFT CHARGE
A charge by a transportation service for lifting articles of excessive weight. Heavy-lift charges are
usually specified in carrier’s tariffs.
95. HEDGE
Any purchase or sale transaction having as its purpose the elimination of profit or loss arising from
price fluctuation; specifically, a purchase or sale entered into for the purpose of balancing, a sale or
purchase already made, or under contract, in order to offset the effect of price fluctuation.
96. IMPORT
To receive goods from a foreign country.
97. IMPORTER
A buyer or merchant who imports goods.
98. IN BOND
The storage or transport of goods in the custody of a Warehouse or carrier from whom the goods can
be taken only upon payment of taxes or duties to a governmental agency.
99. ENDORSEMENT
Writing one’s name upon paper for the purpose of transferring the title. When a payee of a negotiable
instrument writes his name on the back of the instrument, such writing is an endorsement.
100. INSTALMENT PAYMENT
A schedule of payment arranged in connection with a purchase transaction requiring periodic payment
of a specific sum for each of a stated number of payments. The first payment is usually at the time
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of delivery of the purchase or soon thereafter. Installment payment terms may be either on an open
account basis or on a secured account basis. Secured installment accounts are usually evidenced by
a mortgage or a series of promissory notes or time drafts.
101. INSURANCE
By an insurance contract, one party, for an agreed premium, binds himself to another, called the
insured, to pay to the insured a sum of money conditioned upon the loss or damage to the property
of the insured.
102. IN-TRANSIT PRIVILEGES
Changes in degree of manufacture, treatment, and other accessorial services provided for in tariffs on
commodities between points of origin and destination.
103. INVENTORY
103.1 The amount of property on hand at any given time:
103.2 An itemized listing of amounts of property indicated as on hand at a particular time. A “physical
inventory” is one determined from records maintained in connection with day-to-day business
activities.
104 INVITATION FOR BIDS
A request, verbal or written, which is made to prospective suppliers for their quotation on goods or
services desired by the prospective purchaser.
105 INVOICE
A document showing the character, quantity price, terms, nature of delivery, and other particulars of
goods sold or of services rendered; a bill.
106 JUNCTION POINT
A point at which two or more carriers interchange freight. This term is also applied to a point where a
branch-line railroad track connects with the main-line track.
107 k.d. (KNOCKED DOWN)
An abbreviation meaning that the article described is supplied unassembled when an article is
shipped “k.d.” it must be reduced in size by one-third or as specified in the carrier’s tariff, to secure
the applicable freight rate.
108 LADING
That which constitutes a load, as the freight in a vessel or car.
109 LANDED PRICE
A price which includes the cost of the goods, transportation, and other costs incident to ultimate
delivery to the location specified by the purchaser.
110. LANDING CERTIFICATE
A document requiring the oath of the foreign consignee, taken before an American consul or merchant
or “two respectable foreign merchants” that goods described have actually been delivered to him.
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111. LEAD TIME
The period of time from date of ordering to the date of delivery which the buyer must reasonably allow
the vendor to prepare goods for shipment.
112. LEGAL TENDER
Currency or coin which a Government has declared shall be received in payment of duties or debts.
113. LEGAL WEIGHT
A foreign term denoting the weight of a shipment not including the container.
114. LETTER OF CREDIT
A letter containing a request that the party to whom it is addressed pay the bearer or person named
therein money, sell him commodities on credit, or give him something of value, with the intention that
the addressee later seeks payment from the writer of the letter. It is used by a buyer to secure goods
without the necessity of having cash in hand.
115. LETTER OF INTENT
A preliminary contractual arrangement must merely be used in situations where the items, qualities,
price and delivery dates are known, but where the principal contract provisions require additional
time-consuming negotiations. It is used to enter into interim arrangement, pending a definite contract,
so as to permit the start of construction, production, or delivery of the supplies or materials.
116. LICENCE
A certificate granting permission to do a specific act or acts. An expert licence is granted by a

government to ship goods out of the country; an import licence is granted to permit goods to be`
received into the country.
117. LIQUIDATED DAMAGES
A sum agreed upon between the parties to a contract, to be paid as ascertained damage by that party
who breaches the contract.
118. l.s.
The letters are an abbreviation for the Latin phraselocus sigilli, meaning “place of the seal” of “seal”
119. LUMPSUM
The price agreed upon between vendor and purchaser for a group of items without breakdown of
individual values; a lot price.
120. MACHINE TOOLS
An important class of production tools basis to many manufacturing industries; non-portable, power-
driven, precision metal working machines which remove metal in the form of chips by cutting or
grinding, such as lathes, drill presses, boring mills, planners, milling, shapers, and grinders.
121. MANIFEST
See “Cargo (Manifest)”.
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122. MANUFACTURER
One who (1) controls the design and production of an item, or (2) produces an item from crude or
fabricated materials, or (3) assembles materials or components, with or without modification, into
more complex items.
123. MARKETABLE TITLE
A title of such character that no apprehension as to its validity would occur to the mind of a reasonable
and intelligent person.
124. MOCK UP
A model, usually full size and constructed of inexpensive material, made for the purpose of studying
the construction and use of an article or mechanical device.
125. MUTUAL ASSENT
In every contract each party must agree to the same thing. Each must know what the other intends;
they must mutually assent to be in agreement.
126. NEGLIGENCE
The failure to do that which an ordinary, reasonable, prudent man would do, or the doing of some act
which an ordinary, prudent man would not do. Reference must always be made to the situation, the
circumstances, and the knowledge of the parties.
127. OPEN INSURANCE POLICY
A form of insurance covering shipment of a specified time or a stated value and not limited to a single
shipment.
128. OPEN-TO-BUY
A term used in retailing to designate the value of quantity of goods beyond which a buyer may
not purchase; the value or quantity remaining to be purchased against a specific appropriation or
requisition.
129. ORIGINAL EQUIPMENT MANUFACTURER
A classification assigned by a seller to a purchaser who acquires goods for incorporation into a
product which the manufacturer for sale, usually without changing the item which he acquires.
130. OVER, SHORT AND DAMAGE REPORT
A report submitted by a freight agent showing discrepancies in billing received and freight on hand.
For example, if he has freight not covered by billing, he is “over” if less freight than the amount billed,
he is “short”, and if freight is received in bad condition, he reports “damage”, abbreviation : O.S & D.
report.
131. PACKAGING
The use of wrappings, cushioning materials, containers, markings, and related techniques to protect
items from deterioration, to prevent loss or damage, to facilitate handling, and to identify the item
packed. Packaging does not include that additional processing which may be required to prepare the
packaged item for shipment.
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132. PACKING
The preparation of an item for shipment or storage; includes required bracing, cushioning, wrapping,
strapping, placement in shipping container, and marking.
133. PACKING LIST
A document which itemizes in detail the contents of a particular package or shipment.
134. PALLET
A portable platform upon which goods are placed in unit loads to facilitate stacking and handling by
mechanical equipment such as fork-lift trucks of “skid”.
135. PALLETIZING
The loading of supplies and equipment on a pallet
136. PATENT
A grant made by the Registrar of Patents of the States under the authority of Government legislation
to an inventor, which gives the patenter the exclusive right to make, use and sell the patented article.
137. POLICY OF INSURANCE
In insurance law, the word “policy” means the format document delivered by the insurance company
to the insured, which evidences the right and duties between the parties.
138. PORT MARK
In marine shipping, a mark affixed to packages indicting the final destination not the port of entry
except when such port is the final destination.
139. PORT OF ENTRY
A port at which foreign goods and persons are admitted legally into the receiving country. Ports of
entry are officially designated by the Government.
140. PREPAID
A term denoting that transportation charges have been or are to be paid at the point of shipment.
141. PRICE PREVAILING AT DATE OF SHIPMENT
An agreement between the purchaser and the vendor that the price of the goods ordered is subject
to change at the vendor’s discretion between the date the order is placed and the date the vendor
makes shipment and that the then established price is the contract price.
142. PRICE PROTECTION
An agreement by a vendor with a purchaser to grant the purchaser and reduction in price which the
vendor may establish on his goods prior to shipment of the purchaser’s order. Price protection is
sometimes extended for an additional period beyond the date of shipment.
143. PRICE SCHEDULE PROFORMA INVOICE
An invoice prepared by a vendor in advance of a sale to show the form and amount of the invoice
which will be rendered to the purchaser if the sale is consummated. Proforma invoices are often use
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in export transactions to support the purchaser’s request to Governmental authorities for import
permits and foreign exchange.
144. PROGRESS PAYMENTS
Payments arranged in connection with purchase transactions requiring periodic payments in advance
of delivery for certain stated amounts or for certain percentages of the purchase price. The whole
of the purchase price may be due in advance of delivery or partially in advance and partially after
delivery. Progress payments are usually required in contracts for building construction and often for
specially designed plant machinery and equipment. Purchases calling for progress payments may be
either on open account or be secured usually by a contract between the buyer and seller.
145. PROPRIETARY ARTICLE
An item made and marketed by a person or persons having the exclusive right to manufacture and
sell it.
146. PURCHASE
To procure property or services for a price; includes obtaining by barter.
147. PURCHASE ORDER
The purchaser’s document used to formalize a purchase transaction with a vendor. A purchase order,
when given to a vendor, should contain statements as the quantity, description, and price of the goods
or services ordered; agreed terms as to payment, discounts, date of performance, transportation
terms, and all other agreements pertinent to the purchase and its execution by the vendor.
148. PURCHASE REQUISITION
A form used to request the purchasing department to procure goods for services from vendors of
“traveling purchase requisition”.
149. QUOTATION
A statement of price, terms of sale, and description of goods or services offered by a vendor to a
prospective purchaser; a bid. When given in response to an inquiry is usually considered an offer to
sell. Also the stating of the current price of a commodity; the price so stated.
150. RATE
As applied to transportation or the movement and handling of goods and persons, the cost of, or
charge for, service to be or which has been rendered.
151. REBATE
A sum of money returned by the vendor to a purchaser in consideration of the purchase of a stipulated
quantity or value of goods, usually within a stated period.
152. REBILLING
Issuing a new waybill at junction point to which shipment has been billed by connecting line.
153. RECEIVING REPORT
A form used during the receiving function of company to inform others of the receipt of goods purchased.
Usually the goods on acceptance will be sent to respective stores along with the Receiving Report.
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154. RETAILER
A purchaser who acquires goods for resale to an ultimate consumer.
155. RETENTION
The practice of withholding a portion of the sum due a vendor until the purchase has been finally
accepted as fully meeting specifications. The amount or percentage withheld is agreed between the
parties at the time of purchase as is the period of retention. Retention is commonly agreed upon in
the purchase of building construction, and occasionally in purchase of equipment which has to be
“proved out” after delivery.
156. ROYALTY
Compensation for the use of land, equipment, or process payable to the owner, vendor or lessor.
Royalty payments are usually calculated as a percent of income derived by the user from the property
or process, as a stated sum per unit produced there from, or a stated sum per period, such as a
month of a year.
157. SALES TAX
A tax imposed specifically on a sale made by a vendor.
158. SALVAGE
(1) Property that has some value in addition to its value as scrap, but which is no longer useful as
a unit in its present condition and whose restoration to usefulness as a unit is economically not
practicable. (2) The act of saving or recovering condemned, discarded, or abandoned property in
order to obtain useful parts and scrap there from.
159. SAME AS
A term meaning that the classified ratings for such articles are identical.
160. SAMPLE
A small portion of merchandise taken as a specimen of quality.
161. SCRAP
Material that has no value except for its basic material content.
162. SEAL
A seal is to show that an instrument was executed in a formal manner. At early common law sealing
legal documents was of great legal significance. A promise under seal was binding virtue of the seal.
Today under most statutes any stamp, wafer, mark, scroll, or impression made, adopted and affixed
is adequate. The printed word “seal” or l.s. is sufficient.
163. SELLER’S MARKET
A seller’s market is considered to exist when goods cannot easily be secured and when the economic
forces of business tend to cause goods to be priced at the vendor’s estimate of value.
164. SELLER’S OPTION
The right of seller to require the buyer to purchase merchandise, or other property at an agreed price
and within a period of time.
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165. SHIPPING RELEASE
A form used by the purchaser to specify shipping instructions of goods purchased for delivery at an
unstated future date or to an undisclosed destination. Also used to specify quantities to be shipped
when the purchase was for an unspecified quantity or when delivery is to be made in partial lots at
the purchaser’s discretion.
166. SHORT SALE
The sale of a commodity for future delivery which the seller does not possess but intends to purchase
prior to the required delivery date, expecting that the market price will be no higher or will decline
during the intervening period.
167. SIGHT ENTRY
A procedure that must be put through to release goods from customs, occasioned by the use of
incorrect invoice form.
168. SMALL SCALE INDUSTRIAL UNDERTAKINGS
168.1 An industrial undertaking, which is registered with NSIC as SSI.
168.2 NSIC registers industrial units as SSI in which the investment in fixed assets in plant and machinery
whether held on ownership terms on lease or on hire purchase does not exceed Rs 10 million. (Subject
to the condition that the unit is not owned, controlled or subsidiary of any other industrial undertaking)
169. SMALL SCALE SERVICE & BUSINESS (INDUSTRY RELATED) ENTERPRISES (SSSBES)
SSSBEs industry related service/ business enterprises with investment up to Rs 500,000 in fixed
assets, excluding land and building, are called Small Scale Service/ Business Enterprises (SSSBEs).
This limit has been raised to Rs.1 million w.e.f. September 2000.
170. SPECIFICATIONS
A clear, complete, and accurate statement of the technical requirements descriptive of a material,
an item, or a service, and of the procedure to be followed to determine if the requirements are met.
171. STATEMENT OF ACCOUNT
A detailed listing, usually prepared by the vendor, of transactions between vendor and purchaser for
a stated period of time, usually a month, concluding with the open or unpaid balance.
172. STOCK
A supply of goods maintained on hand at the storage points in a supply system to meet demands
that it I s anticipated will be made.
173. STORAGE
173.1 The act of storing; or state of being stored, in a designated storage place for safekeeping.
173.2 Space, or place for the safekeeping of goods.
174. STORE-DOOR DELIVERY
The movement of goods to the consignee’s place of business.
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175. STRAPPING
A technique of reinforcing containers by which metal straps, bands, or wires are placed around them
at intervals, drawn taut, and fastened in place.
176. S.U. SET UP
An abbreviation meaning that the article described is supplied fully assembled.
177. TALLY
To count; the process of counting the pieces of an incoming or outgoing consignment and recording
the particular date obtained by visual inspection, such as number of pieces determined by counting.
178. TARIFF (FREIGHT)
A schedule containing matter relative to transportation movements, rates, rules and regulations. An
alternative tariff is one containing two or more rates from and to the same points, on the same goods,
with authority to use the one which produced the lowest charge. A commodity tariff is one containing
only commodity rates. A class tariff is one containing rates applicable to classifications of goods as
established by the carriers.
179. TERMS OF PAYMENT
All purchase transactions require a payment for the goods or services received and, excepting an
unusual exchange or barter deal, payment is made in negotiable funds in accordance with the terms
agreed between buyer and seller. There are three basic payment terms; cash, open account and
secured account.
180. TINY ENTERPRISES (NOW TERMED AS MICRO ENTERPRISES)
Investment limit in plant and machinery in respect of tiny enterprises is Rs 2.5 million irrespective of
location of the unit.
181. TRADE TERMS
The broad classification applicable to purchase transactions with the reference to understandings
between buyer and seller either as to the meanings of certain abbreviations, words, or purchases, or
to customs applicable to transactions as established by general usage. “Trade terms” include agreed
or arbitrary classifications of buyers and sellers, or their agents; types and method of discounts,
delivery terms, allowances; practices peculiar to an industry, etc.
182. TRADE MARK
No complete definition can be given for a trade mark. Generally it is any sign, symbol, mark, work
or arrangement of words in the form of a label adopted and used by a manufacturer or distributor to
designate his particular goods, and which no other person has the legal right to use. Originally, the
design or trade mark indicated origin, but today it is used more as an advertising mechanism.
183. TRAVELLING PURCHASE REQUISITION
A purchase requisition designated for repetitive use. After a purchase order has been prepared for
the goods requisitioned, the form is returned to the originator who holds it until a re-purchase of
the goods is required. The name is derived from the repetitive travel between the originating and
purchasing departments.
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184. TRUST RECEIPT
A document given by banks to exporters and importers in exchange for bill of lading.
185. ULTIMATE CONSUMER
A purchaser who acquires and consumes the goods in their entirety and who converts then into
another product, or one who secures the goods with no intention of resale.
186. VENDOR
One who sells something; a “seller”.
187. VISUAL INSPECTION
A term generally used to indicate inspection performed without the aid of test instruments.
188. VOUCHER
A written instrument that bears witness or “vouches” for something. Generally a voucher is an
instrument showing services have been performed, or goods purchased, and authorizes payment to
be made to the vendor.
189. WAREHOUSE (BONDED)
A warehouse in which goods are held under bond to the Government subject in payment of ustoms
duties or taxes on the goods.
190. WAREHOUSE (PUBLIC)
A place of storage for use of the general public, usually embracing merchandise and/or household
goods, or sometimes limited to certain commodities. In addition to the service of storage many public
warehouses are performing the functions of distributing agent and forwarder.
191. WAREHOUSE RECEIPT
An instrument showing that the signer has in his possession certain described goods for storage, and
which obligates the signer, the warehouseman, to deliver the goods to a specified person or to his
order or bearer upon the return of the instrument.
192. WARRANTY
An undertaking, either expressed or implied that a certain fact regarding the subject-matter of a
contract is presently true or will be true. The word should be distinguished from “guarantee” which
means a contract or promise by one person to answer for the performance of another.
193. WAYBILL
A document prepared by a transportation line at the point of origin of a shipment showing the point
of origin, destination, route, consigner, consignee, description of shipment and amount charged for
the transportation service, and forwarded to the carrier’s agent at transfer point or destination. An
astray way bill is used for freight miscarried or separated from its proper waybill. A blanket waybill is
one covering two or more consignments of freight. An interline waybill is one covering the movement
of freight over two or more transportation lines.
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194. WHARFAGE
A charge against a vessel for lying at a wharf. It is often used synonymously with “dockage” and
“moorage”.
195. WHOLESALER
A purchaser who acquires goods for resale to a retailer or a jobber.
196. WITHOUT ENGAGEMENT
A phrase incorporated in a quotation and used to avoid having to accept an order at the price quoted.
A safeguard against prices fluctuating in the interval between the giving of the quotation and the order
being placed.
197. WOMEN ENTREPRENEURS
A Small Scale Industrial Unit/ Industry related service or business enterprise, managed by one or
more women entrepreneurs in proprietary concerns, or in which she/ they individually or jointly have a
share capital of not less than 51% as Partners/ Shareholders/ Directors of Private Limited Company/
Members of Cooperative Society.
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CHAPTER - XX
INCOTERMS
20.1 Incoterms 2000 are a set of internationally recognised trading terms, defined by the International
Chamber of Commerce (ICC), which are used for the purchase and shipping of goods in the
international market place. There are a total of 13 such terms which are summarised below.
20.2 Full details can be found on the ICC website. (http://www.iccwbo.org/home/menu_ncoterms.asp)
20.3 Each INCOTERM refers to a type of agreement for the purchase and shipping of goods internationally.
There are 13 different terms, each of which helps users deal with different situations involving the
movement of goods. For example, the term FCA is often used with shipments involving Ro/Ro
or container transport; DDU assists with situations found in inter modal or courier service-based
shipments.
20.4 INCOTERMS also deal with the documentation required for global trade, specifying which parties
are responsible for which documents. Determining the paperwork required to move a shipment is
an important job, since requirements vary so much between countries. Two items, however, are
standard: the commercial invoice and the packing list.
20.5 INCOTERMS were created primarily for people inside the world of global trade. Outsiders frequently
find them difficult to understand. Seemingly common words such as “responsibility” and “delivery”
have different meanings in global trade than they do in other situations.
20.6 In global trade, “delivery” refers to the seller fulfilling the obligation of the terms of sale or to completing
a contractual obligation. “Delivery” can occur while the merchandise is on a vessel on the high seas
and the parties involved are thousands of miles from the goods. In the end, however, the terms wind
up boiling down to a few basic specifics:
Costs: who is responsible for the expenses involved in a shipment at a given point in the shipment’s
journey?
Control: who owns the goods at a given point in the journey?
Liability: who is responsible for paying damage to goods at a given point in a shipment’s transit?
20.7 It is essential for shippers to know the exact status of their shipments in terms of ownership and
responsibility. It is also vital for sellers & buyers to arrange insurance on their goods while the goods
are in their “legal” possession. Lack of insurance can result in wasted time, lawsuits, and broken
relationships.
20.8 Inco-terms are grouped into four different categories
20.9 E-Terms: Where the seller makes the goods available to the buyer at the seller’s own premises (Ex-
Works). E-terms occur when a seller’s responsibilities are fulfilled when goods are ready to depart
from their facilities.
20.10 F-Terms: Where the seller is obligated to deliver the goods to the carrier appointed by the buyer
(FCA). It refers to shipments where the primary cost of shipping is not paid for by the seller.
20.11 C-Terms: Where the seller contracts and pays for the transportation to a named port (CIF). Terms
beginning with C deal with shipments where the seller pays for shipping.
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20.12 D-Terms: Where the seller pays all costs and accepts all risks to deliver the goods to an agreed upon
point (DDP). D terms cover shipments where the shipper/seller’s responsibility ends when the goods
arrive at some specific point. Because shipments are moving into a country, D terms usually involve
the services of a customs broker and a freight forwarder. In addition, D terms also deal with the pier
or docking charges found at virtually all ports and determining who is responsible for each charge.
20.13 Recently the ICC changed basic aspects of the definitions of a number of INCOTERMS, buyers and
sellers should be aware of this. Terms that have changed have a star alongside them.
20.14 EX-Works (named place)
One of the simplest and most basic shipment arrangements places the minimum responsibility on the
seller with greater responsibility on the buyer. In an EX-Works transaction, goods are basically made
available for pickup at the shipper/seller’s factory or warehouse and “delivery” is accomplished when
the merchandise is released to the consignee’s freight forwarder. The buyer is responsible for making
arrangements with their forwarder for insurance, export clearance and handling all other paperwork.
20.15. FOB (Free On Board) (named port of shipment)
One of the most commonly used-and misused-terms, FOB means that the shipper/seller uses his freight
forwarder to move the merchandise to the port or designated point of origin. Though frequently used to
describe inland movement of cargo, FOB specifically refers to ocean or inland waterway transportation of
goods. “Delivery” is accomplished when the shipper/seller releases the goods to the buyer’s forwarder.
The buyer’s responsibility for insurance and transportation begins at the same moment.
20.16. FCA (Free Carrier) (named place)
In this type of transaction, the seller is responsible for arranging transportation, but he is acting
at he risk and the expense of the buyer. Where in FOB the freight forwarder or carrier is the choice of
the buyer, in FCA the seller chooses and works with the freight forwarder or the carrier. “Delivery” is
accomplished at a predetermined port or destination point and the buyer is responsible for Insurance.
20.17 FAS (Free Alongside Ship)* (named port of shipment)
In these transactions, the buyer bears all the transportation costs and the risk of loss of goods. FAS
requires the shipper/seller to clear goods for export, which is a reversal from past practices. Companies
selling on these terms will ordinarily use their freight forwarder to clear the goods for export. “Delivery” is
accomplished when the goods are turned over to the Buyers Forwarder for insurance and transportation.
20.18 CFR (Cost and Freight) (named port of destination)
This term formerly known as CNF (C&F) defines two distinct and separate responsibilities-one is dealing
with the actual cost of merchandise “C” and the other “F” refers to the freight charges to a predetermined
destination point. It is the shipper/seller’s responsibility to get goods from their door to the port of
destination. “Delivery” is accomplished at this time. It is the buyer’s responsibility to cover insurance
from the port of origin or port of shipment to buyer’s door. Given that the shipper is responsible for
transportation, the shipper also chooses the forwarder.
20.19. CIF (Cost, Insurance and Freight) (named port of destination)
This arrangement similar to CFR, but instead of the buyer insuring the goods for the maritime phase
of the voyage, the shipper/seller will insure the merchandise. In this arrangement, the seller usually
chooses the forwarder. “Delivery” as above, is accomplished at the port of destination.
20.20 CPT (Carriage Paid To) (named port of destination)
In CPT transactions the shipper/seller has the same obligations found with CIF, with the addition that the
seller has to buy cargo insurance, naming the buyer as the insured while the goods are in transit.
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20.21. CIP (Carriage and Insurance Paid To) (named port of destination)
This term is primarily used for multimodal transport. Because it relies on the carrier’s insurance, the
shipper/seller is only required to purchase minimum coverage. When this particular agreement is in
force, Freight Forwarders often act in effect, as carriers. The buyer’s insurance is effective when the
goods are turned over to the Forwarder.
20.22 DAF (Delivered At Frontier) (named point)
Here the seller’s responsibility is to hire a forwarder to take goods to a named frontier, which usually
a border crossing point, and clear them for export. “Delivery” occurs at this time. The buyer’s
responsibility is to arrange with their forwarder for the pickup of the goods after they are cleared for
export, carry them across the border, clear them for importation and effect delivery. In most cases,
the buyer’s forwarder handles the task of accepting the goods at the border across the foreign soil.
20.23 DES (Delivered Ex Ship) (named port of destination)
In this type of transaction, it is the seller’s responsibility to get the goods to the port of destination or
to engage the forwarder to the move cargo to the port of destination uncleared. “Delivery” occurs at
this time. Any destination charges that occur after the ship is docked are the buyer’s responsibility.
20.24 DEQ (Delivered Ex Quay)* (named port of destination)
In this arrangement, the buyer/consignee is responsible for duties and charges and the seller is
responsible for delivering the goods to the quay, wharf or port of destination. In a reversal of previous
practice, the buyer must also arrange for customs clearance.
20.25 DDU (Delivered Duty Unpaid) (named point of destination)
This arrangement is basically the same as with DDP, except for the fact that the buyer is responsible
for the duty, fees and taxes.
20.26 DDP (Delivered Duty Paid) (named point)
DDP terms tend to be used in intermodal or courier-type shipments. Whereby, the shipper/seller is
responsible for dealing with all the tasks involved in moving goods from the manufacturing plant to
the buyer/consignee’s door. It is the shipper/seller’s responsibility to insure the goods and absorb all
costs and risks including the payment of duty and fees.
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20.27 Incoterms 2000 Wall Chart
The at-a-glance chart with illustration of the buyers’ and sellers’ obligations under each of the
Incoterms is as follows:
EXW
DDU
DEQ
DDP
FOB
CFR
DES
FCA
CPT
DAF
FAS
CIP
CIF
Delivered Ex Quai Duty Paid

Carriage Insurance Paid To
Cost Insurance & Freight
Delivered Duty Unpaid

Free Onboard Vessel
Delivered At Frontier
Free Alongside Ship
Delivered Duty Paid

Delivered Ex Ship
Carriage Paid To
Cost & Freight
Free Carrier
SERVICES
Ex Works
Packing S S S S S S S S S S S S S
Loading Charges B S S S S S S S S S S S S
Inland Freight B S S S S S S S S S S S S
Terminal Charges B B S S S S S S S S S S S
Insurance B B B B B S B S S S S S S
Loading On Vessel B B B S S S S S S S S S S
Freight B B B B S S S S S S S S S
Arrival Charges B B B B B B S S S S S S S
Duty & Taxes B B B B B B B B B B S B S
Delivery To Dest’n B B B B B B B B B B B S S
B: Buyer’s Responsibility
S: Seller’s Responsibility
20.28 INCOTERMS – 2010
20.28.1 The revised rules, designated “INCOMTERMS 2010”, contain a series of changes, such as a
reduction in the number of terms to 11 from 13. The DAF, DES, DEQ, and DDU designations have
been eliminated, while two new terms, Delivered at Terminal (DAT) and Delivered at Place (DAP), have
been added. INCOTERMS 2010 also attempt to better take into account the roles cargo security and
electronic data interchange now play in international trade.
20.28.2 INCOTERMS 2010 are grouped into two classes:
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20.28.3 TERMS FOR ANY TRANSPORT MODE
EXW –EX WORKS (…named place of delivery)
The Seller’s only responsibility is to make the goods available at the Seller’s premises. The Buyer
bears full costs and risks of moving the goods from there to destination.
FCA –FREE CARRIER (…named place of delivery)
The Seller delivers the goods, cleared for export, to the carrier selected by the Buyer. The Seller loads
the goods if the carrier pickup is at the Seller’s premise. From that point, the Buyer bears the costs
and risks of moving the goods to destination.
CPT –CARRIAGE PAID TO (…named place of destination)
The Seller pays for moving the goods to destination. From the time the goods are transferred to the
first carrier, the buyer bears the risks of loss or damage.
CIP –CARRIAGE AND INSURANCE PAID TO (…named place of destination)
The seller pays or moving the goods to destination. From the time the goods are transferred to the
first carrier, the Buyer bears the risks of loss or damage. The Seller, however, purchases the cargo
insurance.
DAT –DELIVERED AT TERMINAL (…named terminal at port or place of destination)
The Seller delivers when the goods, once unloaded from the arriving means of transport, are placed
at the Buyer’s disposal at a named terminal at the named port or place of destination. “Terminal”
includes any place, whether covered or not, such as a quay, warehouse, container yard or road, rail
or air cargo terminal. The Seller bears all risks involved in bringing the goods to and unloading them
at the terminal at the named port or place of destination.
DAP –DELIVERED AT PLACE (…named place of destination)
The Seller delivers when the goods are placed at the Buyer’s disposal on the arriving means of
transport ready for unloading at the names place of destination. The Seller bears all risks involved in
bringing the goods to the named place.
DDP –DELIVERED DUTY PAID (…named place)
The Seller delivers the goods –cleared for import – to the Buyer at destination. The Seller bears all
costs and risks of moving the goods to destination, including the payment of Customs duties and taxes.
20.28.4 MARITIME-ONLY TERMS
FAS –FREE ALONGSIDE SHIP (…named port of shipment)
The Seller delivers the goods to the origin port. From that point, the Buyer bears all costs and risks
of loss or damage.
FOB –FREE ON BOARD (…named port of shipment)
The Seller delivers the goods on board the ship and clears the goods for export. From that point, the
Buyer bears all costs and risks of loss or damage.
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CFR –COST AND FREIGHT (…named port of shipment)
The Seller clears the goods for export and pays the costs of moving the goods to destination. The
Buyer bears all risks of loss or damage.
CIF –COSTS INSURANCE AND FREIGHT (…named port of shipment)
The Seller clears the goods for export and pays the costs of moving the goods to the port of destination.
The Buyer bears all risks of loss or damage. The Seller, however, purchases the cargo insurance.
20.28.5 Incoterms 2010 Rules-Chart of Responsibility
The at-a-glance chart with illustration of the buyers’ and sellers’ obligations under each of the
Incoterms is as follows:
Any Transport Sea / Inland Waterway Any Transport

Mode Transport
EXW FCA FAS FOB CFR CIF CPT CIP DAT DAP DDP
Delivered at Terminal
Free Alongside Ship
Delivered Duty Paid

Carriage Insurance
Delivered at Place
Cost Insurance &
Carriage Paid To
Free On board
Cost & Freight
Charges /
Free Carrier
Fees
Ex Works
Paid To
Freight
Packaging Buyer
or Seller Seller Seller Seller Seller Seller Seller Seller Seller Seller
Seller
Loading
Buyer Seller Seller Seller Seller Seller Seller Seller Seller Seller Seller
Charges
Delivery to
Port/ Place
Export Duty &
Taxes
Origin
Terminal Buyer Buyer Seller Seller Seller Seller Seller Seller Seller Seller Seller
Charges
Loading On
Buyer Buyer Buyer Seller Seller Seller Seller Seller Seller Seller Seller
Carriage
Carriage
Buyer Buyer Buyer Buyer Seller Seller Seller Seller Seller Seller Seller
Charges
Insurance Seller Seller
Destination
Terminal Buyer Buyer Buyer Buyer Buyer Buyer Seller Seller Seller Seller Seller
Charges
Delivery To
Buyer Buyer Buyer Buyer Buyer Buyer Buyer Buyer Buyer Seller Seller
Destination
Import Duty &
Buyer Buyer Buyer Buyer Buyer Buyer Buyer Buyer Buyer Buyer Seller
Taxes
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CHAPTER - XXI
CVC GUIDELINES
21.1 CVC from time to time has issued various circulars based on its findings. The circulars issued stressed
the need of proper framing of pre-qualification criteria, transparency, equity, proper publicity etc., in
inviting and finalizing tenders.
21.2 The circulars related to procurement which are considered are placed in Annexure-27.
21.3 Any other CVC Guidelines issued after 16th February 2013 shall be binding only after the same is
issued by CVO after due approval of CMD.
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CHAPTER - XXII
e- Procurement
SECTION - I
22.1 Introduction:
HAL has adopted implementation of e-Procurement system across the Company to improve the
transparency in procurement process in line with the Directives of CVC and MoD for all types of
tender’s w. e. f. 1st September, 2011.The threshold value for e-Procurement is Rs. 5 Lakhs.
The Main Objectives of e-Procurement are:
• To bring more transparency in the procurement system,
• To provide centralized unified platform for vendor registration
• To facilitate faster decision making
• To provide opportunity for wider participation
• To make submission of the Bids by the bidders/ suppliers easier
• To facilitate on-line provision of Addendums and changes to the tender documents to

bidders / suppliers
22.1.1 This initiative is taken by HAL to facilitate the bidders for easy submission of their bids and bring
more transparency, reduce cycle time, on-line provision of addendums and changes to documents to
bidders/ suppliers and also on-line acknowledgement of bids. e-Procurement is an automated web
based procurement process, where the complete end-to-end transactions from indent creation to
payment can be performed.
22.1.2 HAL has taken special care to build in highest level of security in e-Procurement Portal and this is
completely owned and managed by HAL. e-Procurement Portal of HAL may be visited at https://
eproc.hal-india.com. e-Portal got the Secured Socket Layer (SSL) certification by VeriSign. Helpdesk
has been deployed for any clarifications from suppliers / vendors & HAL users.
22.1.3 Considering the sensitivity involved in defence procurement, the highest level of IT security has
been embedded in e-Procurement Portal of HAL. The portal takes care of key security concerns
like ‘Privacy’, ‘Authentication’, ‘Integrity of Data’ and ‘Non-repudiation’ through the state-of-art
technology. To strengthen ‘Privacy’ and ‘Integrity of data’, bids/ documents uploaded by bidders will
be encrypted (through Digital Signature Certificate) and the same would be retrieved and decrypted
only by authorized HAL users through their Digital Signature Certificate (DSC).
22.1.4 To participate in e-Tenders of HAL, vendors are required to get themselves registered with HAL
e-Procurement system at https://eproc.hal-india.com. For registration, vendors are required to obtain
DSC Class-III with the organization name from the empanelled Certifying Authorities (CA’s) of India
(http://cca.gov.in may be visited for further details).
22.1.5 Information with respect of Buyer/User detailed Help Manual, System Requirements, User
Requirements & procedures for registration in the e-Procurement System are being hosted & updated
time to time at e-Procurement Portal of HAL.
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SECTION - II
22.2 System Requirements:
22.2.1 The minimum system requirements for e-Procurement operation have been mentioned in home page.
However, the brief on the minimum hardware/ software requirements are given below:
a. Supported Operating Systems:

• Windows XP / Windows 7/ Windows Vista
b. Supported Office Tools (Word & Excel):
• Microsoft Versions 2007 & 2003
c. Supported Browser:
• Microsoft Internet Explorer version 6,7 & 8 (IE 6,7 & 8)
d. Resolution:
• Best viewed under 1024 x 768 pixels
e. PKI (Public Key Infrastructure) e-Token Drivers:
• To enable successful PKI based log-in with Digital Signature Certificate, the
updated e-Token drivers has to be installed and configured in the Internet
Browser as per detailed help available in the home page.
f. Minimum Internet Connectivity:
• 2 Mbps Broadband
The users and suppliers need to configure their IE Browsers for PKI security and also install latest
updated version of JAVA tool from the site.
22.3 Users Requirements:
22.3.1 Digital Signature Certificate (DSC):
i) Digital Signature is an electronic signature that is used to authenticate the identity of the sender of
a message or a document and to ensure that the content of the message or the document have
not been tampered with. Digital Signature provides authenticity, integrity and non-repudiation to
electronic documents. Please visit the web-site http://cca.gov.in for further details on usage of DSC.
ii) The Digital Signatures require a key pair (asymmetric key pairs, mathematically related large
numbers) called the Public and Private Keys. Just as physical keys are used for locking and
unlocking, in cryptography, the equivalent functions are encryption and decryption. The private
key is kept confidential with the owner whereas the public key is shared with other users /
suppliers registered in the system.
iii) DSC Class II or above with the organization name is a mandatory requirement for HAL users to
carry out e-Procurement activities. DSC may be obtained from any Certifying Authority (CA) in
India licensed by the Controller of Certifying Authorities (CCA).
iv) HAL users may obtain DSC preferably, through National Informatics Centre (NIC) which is a Govt.
agency.
v) In the absence of NIC, DSC may be obtained through any of the empanelled Certifying Authorities
(CAs) of India (visit http://cca.gov.in for further details).
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22.3.2 Encryption Key:
a. Encryption key is a mandatory requirement for the Tender Opening Authorities (TOAs) who are
primarily the custodian of Tender document viz. IMM, Outsourcing & Works Dept for decryption
of bids during the Tender opening process.
b. The digital keys issued by M/s NIC are having signing and encryption certificates. The Tender
Initiator and Tender Approving Authority (TAA) will be requiring only Signing Certificate during
submission of Tender. However, the Tender Opening Authority (TOA) should have the encryption
Key for decryption of bids during Tender Opening activity.
c. Function / Usage of Encryption Key:
i. The system encrypts the information (bids) by the Public Key of TOA while submission of the
bids by the suppliers.
ii. The bids will be stored in an encrypted form in an Electronic Secured Tender Box which
shall be time stamped.
iii. The bids can be decrypted only by using the Encryption Key of TOA after the due date
and time is elapsed.
iv. Both the Signature and Encryption Certificates shall be obtained in a e-Token.
22.3.3 Bidders/ Suppliers Requirements:
Digital Signature Certificate (DSC): DSC Class III with organization name is a mandatory requirement
for both Local & Foreign suppliers. DSC may be obtained from any of the licensed CA’s for registration
and to carry out e-Procurement activities. (Visit http://cca.gov.in for further details)
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SECTION - III
22.4 Registration in the e-Procurement System
22.4.1 Registration of HAL Users:
a) Head of IMM, Head of Contract section in case of Works and Head of IT will be considered as
Coordinator and Administrator respectively at Divisional level.
b) Format of Workflow / Hierarchy details indicating Departments, Groups and users are placed at
Annexure – A.
c) The Coordinator need to forward the Workflow / Hierarchy details along with the names of the
DSC holders from the Division in respect to IMM, Outsourcing, Works, Maintenance, Finance
and Planning involved in Tendering activities to the IT e-Procurement system Administrator for
creation of Roles in the e-Procurement Portal.
d) In case of any change in the Workflow / Hierarchy details, the coordinator has to ensure updation
of such change in the system through the System Administrator.
22.4.2 The following are the Roles created against the activities:
a) Tender Initiator (TI) : To create Tender, upload of documents, vendor selection, Tender
modification and corrigendum. Subsequently, Tender will be moved to the next level i.e. Tender
Authorizer.
b) Tender Authorizer (TA): In addition to the role of Tender Initiator, Tender Authorizer will be able to
qualify or disqualify the suppliers and authorize the Tenders. Only on authorization, the Tenders
shall be issued in the e-Procurement Portal.
c) Tender Opening Authority (TOA): The Tender Opening Authority (IMM/ OS/ Works) shall have
encryption key which will be used for decrypting the bids.
d) Tender Opening Committee (TOC): The tender opening committee shall have DSC for tender
opening. Level 1 opening will be done by Finance Office and Level 2 will be done by IMM/OS/
Works as per the existing procedure available as MIS report in the e-Procurement Portal.
22.4.3 Registration of Bidder/Supplier:
a) The user interface of on-line registration module is in-line with the Purchase Manual, Outsourcing
Manual and Works Manual of HAL.
b) The suppliers need to have a valid DSC Class III with the organization name for Registration in
HAL e-Procurement portal and for participation in HAL Tendering activities. The suppliers may
obtain DSC from the Certifying Authority (CAs) in India. DSC obtained from CA’s other than India
will not be accepted in the e-Portal.
22.4.4 The following are the procedure involved in registration:
a) Web Registration:
The suppliers shall register under “New User Sign In” for web registration and obtain user ID and
password for participating in Open Tenders. This is a one time activity and shall be valid for all
Open tenders called by any HAL Division. The suppliers are required to register in the e-Portal
and update their Digital Signature Certificates details during this activity. Hence, they should be
advised to obtain DSC in advance as a mandatory requirement.
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b) e- Registration & Vendor empanelment:
i. To participate in Limited / Single / Proprietary Tenders, the web registered Suppliers have
to complete their e-Registration activity by logging on to the portal with PKI and complete
the e-Registration activity. They have to select the e-Registration tab under Log-in activity
through their User ID and password. There is a separate e-Registration formats for Indian and
Foreign Bidders.
ii. The supplier should select any one of the HAL Division of his choice from the drop down list
of section-2 for submission of the e-Registration Form. The Vendors are required to upload
their documents towards their experience / credentials under respective section.
iii. The Head of IMM / authorized personnel of the selected Division shall verify the details and
enable/ approve the Vendor, after taking necessary approval as per para 3.8 of the Purchase
manual, by giving an IFS code of that Division. Once the respective HAL Division approves
the Vendor’s e-Registration, vendor will be available in the Vendor’s directory of HAL, which
is accessible to all the Divisions of HAL.
iv. Other than the empanelled vendors viz. sister concerns, Channel partners, agents, dealers
etc. are not permitted to participate on behalf of registered and empanelled bidders/ supplier.
However, OEM authorizes their channel partner to participate in tender on their behalf, OEM
should give an authorization letter and their channel partners should get registered with HAL
e-Procurement Portal to participate in tenders.
v. The use of PKI Digital Signature is mandated for all the suppliers. Only e-Registered suppliers
can participate in the Limited Tenders.
c. Approved Suppliers List:
The List of Approved Suppliers (both web-registered and empanelled vendors/e-Registered) are
available as MIS report in the e-Procurement Portal.
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SECTION - IV
22.5 Help Manual
22.5.1 The detailed procedure on carrying out e-Procurement activities along with the Screen Shots
have been brought out in the Buyer / User detailed Help Manual, which is made available in the
e-Procurement Portal and will be updated from time to time.
22.5.2 The other documents available in the home page under ‘Guidelines to Bidders’ are given below:
• Brief Help
• Detailed Help
• Procedure for obtaining DSC for foreign/ Indian vendors
• Digital signature Browser Settings
• e-Registration Help Manual
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SECTION - V
22.6 Scope of e-Procurement
22.6.1 The implementation of e-Procurement system in HAL is to streamline and automate it’s procurement
process which can be effectively utilized by all Divisions, Complexes and Offices to improve efficiency
in the process, cut down the total time in procurement activities and enhance the database of
suppliers.
22.6.2 e-Procurement is applicable to carry out e-tendering activities (Vendor Registration, Tender Creation,
Approval through workflow, Online Bidding, generate Comparative Statement) for functions covering
IMM, Outsourcing & Works Departments for all types of Tenders of estimated value more than threshold
value. However, Divisions may adopt e-Procurement for Tenders of value less than threshold value.
22.6.3 However, the following purchases are exempted from the ambit of e-Procurement:
i) Purchases through License Agreement (LA)
ii) Purchases through World Wide Catalogue Price (WWCP)
iii) Purchases emanates out of Inter Governmental Agreements (IGA)
22.6.4 The following modes of Tendering / type of bids may be processed through e-Procurement System:
a. Modes of Tendering:
i) Open Tender: For open tender press advertisement should be given stating that tender is
available on https://eproc.hal-india.com and all the documents are available on the portal only.
ii) Limited Tender: In Limited Tender, only the most likely and suitable sources available in the
vendor directory are addressed.
iii) Single Tender: When an offer from a single source is invited is called a Single Tender Purchase.
iv) Proprietary Tender: When an offer from a proprietary source only is called.
v) Type of Bids:
• Single Bid
• Two Bids
• Three Bids
vi) The Bidder shall submit the responses in single stage for all the Bids. The tender opening of
the Bids shall be done in sequential order, 1st Bid opening and short-listing, followed by 2nd
Bid opening and short-listing, followed by final 3rd Bid opening.
vii) Example: The brief procedure on Two Bid Tendering to be followed is given below:
a. Purchaser has to select the type of Bids (Two Type).
b. Purchaser has to update relevant information of Tender as per the format.
c. Purchaser has to fill the Technical & Price Bid Opening Date and Time.
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d. In case of non-availability of Price Bid Opening Date and Time, any day and time for the
year 9999 may be given.
e. After the Technical Bid Opening Date and Time is reached, only the Technical Bids can
be opened and downloaded.
f. After completion of technical evaluation of the offers received, purchaser has to update
the qualified suppliers in the system for the opening of price bids.
g. In case of modifications in Price Bid Opening Date and Time, revised Price Bid Opening
Date and time can be entered in the system against the subject Tender by issuing
corrigendum.
h. The system will send e-mail / SMS alerts to the qualified suppliers about the Price Bid
Opening Date.
i. Only after the Price Bid Opening Date and Time is reached, the Price Bids can be opened
and downloaded for evaluation.
b) Approvals:
i. Approvals for MPR/ MSR are needed to be taken outside of the e-Procurement system and
existing procedure are required to be complied.
ii. The existing procedure is required to be followed for obtaining approval in case of Re-tendering
single offer situation / negotiations.
c) Exceptions:
Waiver from e-Tendering, in special cases, for the tenders valuing above the threshold value for
e-Tendering can be accorded by the Head of the Division with recorded reasons.
d) Creation of Tenders:
i. Tender shall be created and hosted in the e-Procurement portal by the user having the defined
role of Tender Creator in the system. The template as a single part (Single Page NIT) containin
all details of Header and Footer for Tender Creation.
ii. The Tender No. is a mandatory field which is unique and to be maintained by the Divisions
in-line with the Indent / Contract No. In addition, other fields such as Name of Division, Type
of Tender, No. of Bids, EMD (Refer Point 10 on EMD), Due Date, Opening Date etc to be
updated by the Tender Creator in-line with the Indent / Contract.
iii. A template of Technical and Price Bids to be hosted along with the Tender shall be pre
defined as per the requirements of the Indent / Contract. The template to be created in the
excel format to allow bid submission as per the requirement of Indent / Contract. The cells of
the template will be kept Locked (excel feature) where suppliers do not require to provide any
Data, while cells where suppliers need to submit their offer, would be kept unlocked. Division
should take care that cells in the Quote range should not be merged. Also, the blank bid must
be prepared in MS Excel 2003 and higher versions. However, vendor can upload using MS
Excel 2003 and higher version.
iv. The pre-qualification documents, Standard Terms & Conditions shall be created, downloaded
and attached as per the requirements of the Tender.
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v. Note: Integration of e-Procurement System and ERP is in-progress. After integration, tender
can be created either through ERP or directly in e-Procurement system.
e) Selection of Supplier:
The Tender Creator has to select the supplier(s) already registered in the portal in case of Limited
/ Proprietary/single tenders. The suppliers who have completed e-Registration and enabled by
any one of the HAL Division can be selected for Limited Tenders. In case of Open Tender, the
Tenders shall be viewed by all the suppliers registered in ‘Tender free view’ available in the Portal
Selection of supplier by name and Vendor Code is provisioned.
f) Selection of TOA for Tender:
Divisions have to finalize the TOAs on rotation (monthly) basis. The Tender Creator should be
aware of the TOA before creation of the Tenders for the particular Tender.
The Tender Creator along with Tender has to select the authorized Tender Opening Authority
(TOA) who will be responsible for opening the particular Tender. Once the Tender is submitted
with TOA, it is mandatory that the same TOA with valid DSC to be present along with other Tender
Opening Committee members during opening of the Tenders. Changing of TOA is not permitted
after the tender has been authorized.
g) Submission of Tender:
The Tender created as above will be forwarded to approving authority as per the Workflow/
Hierarchy as pre-defined in the system. The approving authority may modify the contents of
Tender Document, if required or otherwise approve and host the tender.
Once the Tender is hosted, the system will generate e-mail / SMS alerts to the concerned suppliers
in case of Limited Tender. In case of Open Tender, the information will be available to all registered
suppliers.
If selected Tender opening authority is not available on the Tender opening day, the tender can be
opened on the next working day. As the system is web based, the TOA/ TOC can be present virtually
from any location and carry out Tender Opening activity from remote location using their DSC.
Tendering time may be given for submission of the quotation in-line with the existing procedure.
Addendum / Corrigendum to Tender:
The system has provision for issuance of Addendum / Corrigendum for modifications in tender
Terms & conditions and extension of the due date & time before the due date & time of the tender.
However, the system will not allow pre-ponement of the tender due date (except proprietary
tender) in case of any hosted tender through e-Procurement Portal.
Pre-ponement of proprietary tenders may be done by giving service request (Official email / letter)
to Administrator at [email protected].
In case of Open/ Global tender, addendum/ corrigendum about the tenders has to be published
in newspapers, HAL web-site, Trade Journals, etc. as per standard procedure.
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Bid Submission:
The system supports both off-line and on-line payment mechanisms of EMD.
The system allows the bidder to submit his bids only in the forms associated with the tender and
only if the supplier fulfills the minimum criterion specified against each parameter.
The system will allows the bidder to submit pre-qualification, technical and commercial bids
separately and upload relevant certificates and supporting documents. During submission, the
bidder / system will encrypt the bids using public key of Tender Opening Authority (TOA) as per
the instructions in tender to meet the highest standards of data security & confidentiality.
All the received bids shall be stored in an encrypted form in an Electronic Secure tender box. It is
not possible to open and view the contents of the Electronic Secure Tender Box till the due date
& time / specified time have elapsed.
The bidder is allowed for multiple submissions of bids till the closing date & time. However, the
system will consider only the last bid submitted by the bidder. At the same time, system will not
allow to know No. of bids received before the closing date & time to HAL.
Bid clarification module is available in the e-Procurement portal to obtain clarifications on pre-bid
queries and provide response to Bidder queries.
The system shall generate a submission acknowledgement with Token number for every
successful bid submission.
Closing of Bid Submission:
The System will close the bid submission automatically in accordance with closing date and time
specified in the tender. In cases of unexpected/ genuine server related decisions, Division can
take a decision to extend the closing time in the form of corrigendum to the Tender.
The System will not allow bidder to submit any bids after the due date & time / where a tender is
closed.
Tender Opening/Evaluation:
The System shall allow opening of Technical bids by the Tender opening committee through dual
opening levels using DSC only after reaching the opening date & time. Bids will be opened initially
by Level 1 i.e. Finance Officer and then by Level 2 i.e. TOA (IMM/ OS/ Works).
The bids shall be decrypted only through private key of TOA indicated against that particular
Tender. The same process shall be repeated for all the bids of different suppliers.
In case of two bid system, vendors can see only No. of vendors participated with name after
opening of technical bids from their location and they need not to witness for the bid opening.
After technical evaluation and recommendation, price bids of technically accepted vendors will
be opened. On opening of Price bids, vendors can see each other’s bids (Technical and Price
bids). However, in single bid system, all the bidders can see each other’s bids after bid opening.
The system will generate Technical / Price Comparison statement based on the pre-defined
Technical / Price bid format. The comparison statement will map all supplier bids and display in
tabular format as Supplier 1, Supplier 2, etc.
Procedure at para 7.9 of Purchase manual may be followed for tender evaluation.
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The system will create log of all the tendering activities carried out by HAL Users and Suppliers
against the Tender with date & time stamp. The log will be available against each Tender for
review as and when required.
Hard Copies of the documents:
All the documents such as Bid documents received from the bidders, compliance statement
(Technical/ Price), Tender Logs, Vendor Logs of all activities pertaining to Tenders etc. will be
available in the e-Procurement systems. Bid documents will be retained in the system as per
the retention period defined in Purchase manual. Hence, print out of the bid document is not
mandatory to promote paperless work.
Bid Clarification Module:
The facility is available for HAL users to seek clarifications from the bidders after opening of bids.
The HAL user can select any / all the Vendors and ask for clarifications/ documents for scrutiny.
The selected vendor shall provide the response to the said clarification within the stipulated date
and time.
The Tender Creator / Tender Approving Authority can provide clarification to all or selected
suppliers before bid submission in the e-procurement portal only. The audit of such
correspondence is maintained in the portal. The DSC must be used by HAL users/ suppliers for
all such correspondence.
EMD Payment:
Off-line EMD payment: Currently EMD will be submitted off-line and only the details of fee
instruments will be entered during bid submission by the suppliers. After implementing on-line
payment integration, it can be done online.
The following steps may be adopted:
i. In the Tender, EMD value to be indicated.
ii. EMD clause of the RFQ to be modified as follows:
Earnest Money Deposit (EMD) in the form as specified at para 5.3 of Purchase manual should
be scanned and attached with the Pre-qualification/ Technical Bid. Original of the same shall be
submitted to the Officer in-charge of the respective Office/ Division so as to reach on or before
the closing date & time. Offers where Earnest Money Deposit is not received before the due date
and time would be considered as unresponsive and rejected.
HAL will not be responsible for any transit/ postal delay in receipt of EMD.
Once the On Line Payment is introduced, both Indian and Foreign Suppliers can remit their
payments accordingly.
In case of SSI/ NSIC suppliers, if they are exempted for submission of security deposit/ EMD,
then they can select EXEMPTION option, enter the relevant reference and submit the tender. The
relevant certifications should be scanned and uploaded with the technical bid. Offers without the
relevant certificates would be treated as unresponsive and rejected.
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Acceptance of Samples:
The following Off-line method may be adopted:
Respective Division or Office shall indicate Name, Contact No. and address of the authority to
receive samples in the Tender. The supplier has to give compliance in the Technical Bid for having
submitted the samples. The samples should reach on or before the closing date. If the supplier is
required to enter the proof of producing the samples in the technical bid, he has to indicate the
relevant declaration as a check-list in the technical bid.
The bids shall be liable for rejection in case the samples are received after the closing date.
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SECTION – VI
GENERAL GUIDELINES
1. Procedures for modifying the approved/ empanelled vendors profile
Vendor shall be approved/ empanelled by the Divisions based on their credentials submitted in
e-Procurement system and dealings with Division. Vendor has rights to modify contact details in
the profile only. To update other information like address, e-mail ID, product information, facilities
available etc. can be modified on written request to HAL by the vendor.
Division has to create service request to HAL admin at [email protected] for updation of the
vendor’s profile.
Admin will change the vendor status from “Approved” to “Submitted” for certain period. During
this period, vendor has to update the information and contact the concern Division to approve the
registration.
On approval by the Division, status of the vendor will be changed to “Approved”.
2. Guidelines for updation of new DSC serial No. or resetting of Password
To update new DSC serial No. in the profile or resetting of Password, User/ vendor has to give request
to [email protected] in writing by official mail/ scanned copy of letter to admin.
3. How to manage the bigger size files
Any number of files of size 5 MB (max.) can be uploaded with the tender .
High capacity files may be written in the CD/ DVD in write protected format and handed over to the
prospective/ concerned vendor as per HAL’s procedure followed for manual tendering system.
4. Guidelines for remapping of the roles in case of transfer/superannuation
In case of transfer/superannuation, request may be given to HAL admin to disable their current User IDs.
Revised work flow may be sent to admin by official mail/ scanned copy of letter for remapping of the
roles, in case of transfer or change in approval hierarchy.
5. Encryption Key back up procedures
As per the Public Key Infrastructure (PKI) mechanism, bids can be opened by the key which was used
for authorizing tender or defined for tender opening.
While Obtaining a DSC (with Encryption Key) two different software keys are provided, one for signing
and other for Encryption.
The Encryption key needs to be kept in safe custody with Head of Department proper back up by
the user to meet the situation such as absence of tender initiating officer, renewal of key, transfer,
resignation, damage of token etc.
As per NIC guidelines, it is important to keep a back up of Encryption Key with Split control. The key
need to be regenerated for this purpose by joining splitted parts of the original key.
Each user shall keep a safe back up of their Encryption key as explained in the Guidance for Backup
of Encryption Key issued by NIC. (Detailed guidelines may be downloaded at http://nicca.nic.in/pdf/
EncrBack.pdf)
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If User has taken DSC from CAs other than NIC, Encryption key back up procedure of that CA may
please be followed.
6. On-line Training
On-line training thro’ Web-ex is made operational from April’12 for HAL Users/ Indigenous/ foreign
vendors. For training, a mail has to be sent to [email protected]. Training schedule is published
in e-Procurement Portal as well as HAL’s web-site.
7. Procedure to retrieve lost password
Current password of the user cannot be retrieved. However, request may be given for a new password
by sending a mail to helpdesk at [email protected] indicating User name and User ID for
easy and immediate reference. A new system generated password will be generated and sent to the
email ID indicated in the request within 24 working hours.
8. Procedure to enable all the ActiveX controls in the browser to rectify “Authentication Failed”
error during login
To use any of the digital signature certificates, you need to enable all the ActiveX controls in your
browser. In internet explorer, go to Tools >> Internet options >> Security >> Internet >> Custom Level
and enable all the ActiveX controls and submit. Close the browser and open once more and try to log
in. Even then if not able to login, please call helpdesk to attend the same.
9. Additional General Terms and Conditions for e-Tender
i. Bid must be submitted online through HAL’s “e-Procurement system” at https://eproc.hal-india.

com. Bidder shall submit both “Technical Bid” and “Price Bid” through HAL’s e-Procurement
Portal only. Bids submitted in any other form, such as courier/ post/ in-person/ fax shall not be
accepted against this Tender.
ii. Any change in bid after the “Due Date & Time of Bid-Submission” of Tender is not allowed.
iii. Bidders are advised, in their own interest, to ensure that their bids are submitted well before
the “Due Date & Time of Bid-Submission” of the Tender as HAL’s “e-Procurement System” at
https: eproc.hal-india.com will not allow submission of bids once the closing date and time of the
Tender (i.e. Due Date & Time of Bid-Submission) is reached. HAL shall not be responsible if bidder
is not able to submit the bid on account of failure in network / internet connection at bidder’s end.
10. Procedure for handing over of DSC in case of resignation/ superannuation:
i. DSC (including Hardware/Token and Soft Copy of the key if any) issued to the officer is to
be handed over to the Head of Dept
ii. An application from the respective Dept./ Division to be sent to the Certifying Authority to revoke
the user DSC.
iii. Further, his/ her user credentials in the e-Procurement System should be deactivated (disabled by
sending mail to [email protected] so that he/ she can no longer access the application
while the certificate revocation is under process with the CA.
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CHAPTER - XXIII
PROCUREMENT FROM RUSSIAN SOURCES
23.1 Introduction
The various aspects of Purchase procedure has been elaborated in the preceding chapters. However
in case of procurements with respect to Russian origin materials there are several peculiarities due
to the stringent controls at Russia by their Government Agency which leads to single offer situations,
delays in getting offers, subsequent delays in receipt of materials. The number of vendors registered
at HAL for procurement from Russian sources is very few and all of them are relevant for all categories
of requirements. Keeping in view these constraints a separate chapter covering the aspects of
procurements from Russian sources which is to be followed by the Divisions.
Provisioning :
The timely provisioning of materials and to raise demands in appropriate proforma (Indents/ MPR/PR’s)
considering production programme, bill of materials, available stock, dues in, production allowances,
contingency, shelf life, procurement lead time based on stage of build/ structural breakdown and
other factors like indigenization plan etc. is to be made by Material Control dept. In View of the Lead
time involved the following methodology will be adopted.
23.2 Planning of Indents:
23.2.1 The divisions should issue Annual Indents keeping in view minimum lead time of 36 months covering
all the production / task of the Division.
23.2.2 In case the firm/ forecast Task/ contract is available with the divisions same should be considered.
The requirement to be worked out for three year period after reducing the stock and dues in.
23.2.3 In case of non availability of firm/ forecast task/ contract the Indent quantity is to be worked out
based on the likely arising for repair/ overhaul as per the annual loadings of the repair units/ aircraft/
engines etc. with justification.
23.2.4 LTBA/ LTRA should be entered for requirement of items for major projects likely to continue for a longer
period. Provisioning to be done based on provisions of DoP and subsequent revisions / clarifications
to DoP.
23.2.5 In case of raw materials while arriving at the required qty the requirement of packing norms, MoQ,
should be considered specially if the requirement is for longer duration and there is all possibility of
liquidation of Inventory.
23.2.6 In case of Consumables while arriving at the required qty the requirement of packing norms, MoQ,
Shelf life of items involved should be considered.
23.3 Estimation:
23.3.1 The estimated cost is to be arrived based on past procurement price of licensor M/s Rosoboronexport
where ever available duly escalated to Year of Delivery (YOD) using escalation % as per mutually
agreed Protocol / prevailing MoD escalation protocol for spares etc. other than license articles.
23.3.2 In case of non availability of past procurement price from Rosobornexport the past procurement
prices from other vendors should be considered with escalation to the Year of Delivery (YOD) using
escalation % as per prevailing MoD escalation protocol for spares etc. other than license articles.
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23.3.3 Wherever the past procurement prices are not available, the estimates should be made by a technical
committee based on the past procurement prices of similar components applying suitable % towards
obsolescence, old reference prices, difference in project, variation in technical specifications,
complexity of item etc.
23.4 Approval of Annual Indents :
The annual indents would be approved by the Divisional Head with the concurrence of appropriate
Finance. The Indents after approval of Divisional Head should be sent to the Suppliers category wise,
source wise before 1st January of every Year.
23.5 Placement of Indents on Suppliers:
23.5.1 The Indent will be sent to suppliers through Fax, e-mail, RM (Moscow), by International Courier.
The Indent will contain Indent No and Sl No of Items, Specifications/ Part Code and Qty reqd. Any
particular terms and conditions which needs to considered for evaluation of bids. The Indent need
not include the General Terms and Conditions of regular tendering.
23.5.2 The Terms and Conditions would be as per the General Contract signed with the suppliers and where
there is no such General Contract the terms and conditions would be finalized before signing of the
contracts/ supplement agreements with the Suppliers.
23.6 Tendering :
23.6.1 Indent to Licensor:
For the licensed items (Technical kits and DRE) which are specifically covered under the General
Contracts with the Licensor, the indents to be sent only to the Licensor. For other project items/ repair
requirements which are not covered under license, the Divisions may send on Single Tender basis to
Licensor. The proposals to be processed for approval of CFA under DoP.
23.6.2 Limited Tendering :
23.6.2.1 Limited Tendering (where only one approved source as per FSMTC is available)
Indent to be sent to all sources registered for the particular Category of items. In case any source
is not registered, the Divisions can send the Indent and take up the process of vendor registration
simultaneously and complete the process before placement of order. The issue of Limited tender
enquiry to minimum five suppliers is not mandatory in case of Russian suppliers due to inadequate
availability of sources. Where the number of available sources of supply is less than five, the number
of suppliers to be addressed may be reduced with the approval of the Head of the Division.
23.6.2.2 Limited Tendering (where more than one approved source as per FSMTC is available
In case more than one supplier is registered, the Divisions can forward Indent to relevant multiple
FSMTC approved vendors in a staggered manner. However, the tender opening dates to be kept
same.
23.6.3 Indent to OEM or Holding Company other than Licensor:
a) In case of procurement of Spares and repair/Overhaul requirement, where ever the OEM is
known to HAL & the OEM is registered with FSMTC (in case of Russian origin items) or is Ex-CIS
Govt. approved source as well as these OEM’s are registered, the Divisions should send Indent
on proprietary basis to OEM only instead of sending Indent to Licensor. The proposals to be
processed for approval under DoP along with the proprietary certificate.
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b) In case the OEM is not registered with FSMTC and is not having Export license, the Holding
Company of such OEM who has the Export License and registered with FSMTC should be
considered as proprietary agency for sending indents for the items for which they have got license
from FSMTC. The proposals to be processed for approval under DoP along with the proprietary
certificate.
23.7 CFA for Proposals:
23.7.1 The L-1 offer Vendor-wise should also include single acceptable items of that vendor. Since, Re-
tendering in such cases will not yield any result and change in specification is also not applicable.
23.7.2 The proposal to be processed for the number of items for which offer is received even if offers are not
received for all the items in the Indent. The CFA will be based on the DSA value.
23.7.3 For balance items to be re-tendered and proposal to be processed separately.
23.8 Receipt of Offers/ Tender Opening :
23.8.1 Offers received in open condition through FAX/ not through dedicated fax/ e-mail id / handed over
during IRSA meetings / sent through diplomatic bag by RM (Moscow), may be considered as valid
offers (till e-procurement is adopted).
23.8.2 Offers are received in staggered manner. Same to be processed without waiting for offers for entire
Indented items.
23.8.3 This will not be treated as splitting of proposal. CFA based on each offer/ proposal.
23.8.4 As far as possible such offers received in opened condition, at different point of time against Limited
tendering should be sealed by IMM Head or Project Group (as the case may be i.e. who initiated the
RFQ ) before dropping in tender box or handing over to Tender-Cell.
23.9 Negotiations and Conclusion of Contracts after Negotiations :
23.9.1 The DSA’s negotiated in IRSA meetings against different Indents should be processed separately
(CFA as per each DSA) and this will not be treated as splitting.
23.10 Preparation of Comparative Statements :
23.11 Offer of MOQ for Raw Materials/ Consumables
23.11.1 In case of procurement of Raw Materials/ Consumables against limited tender, different MOQs are
offered by different suppliers. In such cases, the L-1 vendor is to be decided based on unit price
only provided the Division is able to justify the higher MOQ quantity (the Divisions may include other
Division requirement to justify MOQ) and items having shelf life. This is applicable to cases where the
agreed unit price becomes the base price for future procurements.
23.11.2 Wherever, higher MOQ is not justifiable, the L-1 may be decided on cost to company basis i.e. after
multiplying the MOQ offered with the rate.
23.11.3 In case of Limited tendering, if the vendors specifies the minimum order value in their offers for
placement of order on them and if the vendor becomes L1 for some items individually and the value
of the total order to that vendor is far less than the minimum order value specified in their offer and it
is also not justified to increase the MOQ in line with minimum stipulated order value by the vendor, the
offer of this vendor to be treated as technically rejected. In Russian procurement system re-tendering
leads to extreme delay and increase in annual escalation.
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23.12 Vendor Registration :
23.12.1 Suppliers already in the approved list of FSMTC (Federal Service for Military & Technical Co-Operation)
to be considered for registration directly based on the export license and ability to supply the items.
23.12.2 Registration to be made by Divisions based on the Export License, other organizations to which the
supplier is supplying the items, details of their financial status. However certain suppliers are not able
to furnish their turnover certificate/ Balance sheet etc which is not feasible in such cases registration
could be considered based on the assessment made by RM(Moscow) / Representative of HAL after
visiting the vendor’s premises.
23.12.3 A directory of all vendors registered as per MMC-29 and fresh vendor registered will be maintained
by the Division. Corporate Office approval will not be required for registration of vendors.
23.13 Payment to Suppliers:
23.13.1 Payment after receipt within 30 days by electronic transfer.
23.13.2 Advance payment with/ without Bank Guarantee after taking one time approval of the Board for
the General Contract and for subsequent Supplement Agreements with the approval of respective
Managing Director.
23.13.3 LC Payment
23.13.4 Stage payments.
23.13.5 In all cases the bank charges incurred at respective country to be borne by Supplier/HAL.
24.14 Other Standard Terms and Conditions:
The Following clauses if appearing the existing General Contract with the Russian suppliers than to
be insisted upon and in case of new General Contracts same should be insisted upon. However in
case of General Contracts signed earlier, the subsequent supplementary agreements to be signed
without insisting on these clauses.
• Liquidated damages
• Integrity pact
• Fall Clause
• Option Clause
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ANNEXURES
Annx Description Page
01 Indenting dept/functional head responsible for various procurement activities. 152
02 Suggested structure for vendor directory file 165
02A Material group codes 166
02B Country & currency codes 167
03 Suggestion for inclusion of a source of supply in vendors directory 173
03A Format for vendor directory 174
03B Approved vendor directory 175
04 Application for registration as approved supplier (Indian suppliers) 176
04A Application for registration as approved supplier (Indian suppliers) 181
(drugs/non-drugs/medical equipment)
04B Check list for filling up the vendor registration form (Indian vendors) 187
04C Suggested format of vendor registration letter 188
(Foreign suppliers - manufacturer)
(Foreign suppliers stockist/distributor)
06A Check list for foreign vendor/stockist/distributors 193
07 Format for Material Purchase Request 194
07A Format for Service Purchase Request 196
08 Capital Purchase Request 199
09 Urgent Purchase Request 200
10 Petty Purchase Request 201
11 Conditions of Tender (indigenous) 202
11A Rate contract - Conditions of Tender 210
12 Conditions of Tender (Foreign) 212
13 High sea sale agreement format 223
13A Terms and conditions of contract (canteen & groceries) 225
14 Proprietary certificate 228
15 Rate contract - Draft agreement 229
16 Receiving-cum-discrepancy report (imprest purchases) 235
17 Ministry of micro, small and medium enterprises (MSME) policy 236
18 Time frame for procurement 239
19 Project materials, purchase proposal format 240
20 Non-project materials, purchase proposal format 243
21 Capital items purchase proposal format 246
21A Format for technical evaluation statement & recommendation 249
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21B Format for comparative statement of prices 250

21C Format for commercial evaluation statement 251
21D Price justification 252
21E Agenda for negotiations 253
21F Format for PNC recommendation 254
21G Information check list for purchase proposals (capital items) 255
21H Information check list for purchase proposals (project/non-project) 258
22 Format for brief summary of proposal for approval by PSC/Board 261
22A Chronology of progression of purchase proposal 262
23A General terms & conditions of contract 263
23B Format of bank guarantee for advance payment 270
23C Format of bank guarantee for security deposit 272
23D Format of performance bank guarantee 274
23E Format of bank guarantee towards earnest money 276
24 Integrity Pact format 277
25 Format for purchase order returns 282
26 Format for purchase progression 283
27 List of CVC circulars 284
28 Discounted cash flow method 293
Annex-29 Letter of Intent (LoI) Format 294
Annex-A Format of Workflow / Hierarchy (e-procurement) 295
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REFERENCE
REFERENCE DESCRIPTION PAGE
1 LIST OF RECORDS/DOCUMENTS TO BE RETAINED AND THE PERIOD OF 297
THEIR RETENTION
2 RETURN OF EARNEST MONEY DEPOSIT (EMD) RECEIVED AGAINST 299
OPEN TENDER
WEBSITE HOSTING-LEVERAGES OF TECHNOLOGY
3 SUMMARY OF ENQUIRIES RELEASED DURING A MONTH 300
(RS. 10 LAKHS AND ABOVE)
3A SUMMARY OF PURCHASE ORDERS RELEASED DURING A MONTH 301
3B SUMMARY OF PAYMENTS MADE DURING A MONTH - AGAINST 302
PURCHASE ORDERS
4 SAMPLE TEMPLATES(PRICE BID FORMAT) 303
5 MATERIAL MANAGEMENT CIRCULARS/ GUIDELINES 306
6 REFERENCE WEB SITES FOR CUSTOM NOTIFICATIONS, EXCHANGE 308
RATES, LABOUR AND MATERIAL INDICES ETC
7 LIST OF ITEMS RESERVED FOR PURCHASE FROM SMALL SCALE 309
INDUSTRIAL UNITS INCLUDING HANDICRAFT SECTOR
8 ARBITRATION 321
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ANNEXURE - 1
Indenting Dept / Functional Head responsible for various procurement activities as given below.
Type of Indenting Dept. Activities Functional Head Processing Remarks

Procurement - Determination of need of to coordinate Activities
Procurement for approval as - Tendering
per DoP.
- Scope of work / services - Correctness of
- Supplier Selection the suppliers and
no. of suppliers
- Mode of Tendering
- Tendering
- Value of Procurement
opening
- Specification
- Tender
- Raising of MPR/ Evaluation
Provisioning (Commercial)
- Tender Evaluation - Retendering
(Technical)
- Order Placement
- Acceptance of delivery
- Order
schedule
amendment
- Payment to
Supplier
Project - Material Planning MM Purchase
Material based on Bill of Material
certified by Production
Engineering.
- Proprietary certificate
to be originated by
Material Planning and
coordinated by user from
Production Engineering /
Methods (as applicable)
and approved by
Competent Provisioning
Authority(CPA)
Shop - Stores based on review IMM Purchase
consumables- by User Dept.
Stock items - Stores based on review
Stationeries for by User Dept.
consolidated - For LO / CO by HR
requirement Dept.
Non stock items - Concerned dept Concerned Purchase Common items of
function Head different depts. to
be consolidated.
Maintenance Maintenance Function head Purchase
Spares to whom
maintenance
reports if it is not
a independent
function under
head of division
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Tooling Tooling dept Functional head Purchase

to whom tooling
reports
Capital Facility Planning Planning Purchase
procurement
IT infrastructure IT Dept Functional head Purchase
– computers to whom IT
and peripherals, reports if it is not
Software Printer a independent
Cartridges function under
head of division
Services Repair Material Planning based IMM Purchase
/ Overhaul of on requirement projected
Aircraft / Engine/ by Planning
LRUs/Rotables
outside HAL
Services Hiring of HR Department Functional head HR Department
Transport Canteen of HR
Engagement
of Agencies for
recruitment of
personnel
Engagement of
consultants,
Engagement
of agencies for
advertisement
Maintenance of HR Department Functional head HR Department
Transport of HR
Repair / AMC Maintenance Function head Purchase through Operation and
/ Calibration of to whom Contract monitoring of the
Machinery/ maintenance contract by the
Equipment/GSE/ reports if it is not indenting
GHE/Medical / a independent department
Office equipment / function under
Repair of Furniture head of division
Laundry
Computer IT Department Functional head Purchase through Operation and
Repair/ AMC to whom IT Contract monitoring of the
for Computer IT reports if it is not contract by the
Implementation/ a independent indenting
Support function under department
head of division
Printing Concerned User Functional head Purchase through Operation and
Publication Department of the concerned contract monitoring of the
user department contract by the
Binding and user department
others
Page 153
B. Role of Indenting / Purchase / Finance Dept. in Procurement activity
Type of
Indenting Department Purchase Department Finance
Activity
MPR Justification of requirement Adequacy of the nos. of Scrutiny of the MPR and
Authenticity of the input provided vendor proposed. concurrence covers /confirms
in the MPR. the following unless otherwise
Acceptability of the stated :
specifications/ technical terms i. The provisioning of Materials
& conditions and quality / to be done based on
inspection requirement. provisions of DoP and
Acceptability of delivery schedule subsequent revision /
clarifications to DoP.
Acceptability of shelf life or life
limitation of the product ii. MPR is supported with an
adequacy statement / review
Mode of tendering proposed is as
sheet is counter checked with
per guidelines issued.
respect to its arithmetical
In case of the proposal for single/
accuracy in arriving at the net
proprietary/ spot tender and
quantity requirement proposed
single tender on nomination,
as per the guidelines issued.
justifiable reasons are indicated
iii. Confirmation of inclusion of
in the proposals and guidelines
Integrity Pact (IP) clause in the
have been complied as per his
RFQ in case of the estimated
wisdom
amount is more that threshold
value (presently Rs. 20.00
Crs.) notified from time to
time.
iv. Correctness of reference to
Delegation of Power and in
case deviation from originator
of proposal, then concurrence
of next higher level may be
taken.
Page 154
Capital items Justification of requirement Adequacy of the nos. of vendor Scrutiny of the Capital
Mode of Tendering proposed. Appropriation Request (CAR)
Authenticity of the input provided and concurrence covers/
in the CPR. confirms the following unless
otherwise stated :
Acceptability of the
specifications/ technical terms i. Confirmation on the
& conditions and quality / availability of the items in the
inspection requirement. approved Capital Budget.
Acceptability of delivery schedule. ii. Confirmation of the value of

the proposal being within the
Reasonableness of the basis of
budget provision.
the estimate made in the proposal
considering the budgetary iii. The correctness of reference
quotation received from the of Delegation of Power and in
vendor with applicable duties and case deviation from originator
taxes. Acceptability of technical of proposal, then concurrence
/ engineering estimates in case of next higher level may be
of non availability of budgetary taken.
quotes. iv. Confirmation of inclusion of
The mode of tendering proposed/ Integrity Pact (IP) clause in the
time for response is as per the RFQ in case of the estimated
guidelines issued. amount is more than threshold
value (presently Rs. 20 Crs)
In case of the proposal for
notified from time to time.
single tender/ proprietary tender,
justifiable reasons are indicated in v. For items not covered in the
the proposals as per his wisdom. Capital Budget, justification
for procurement with
For items of commercial
proper DOP reference, and
nature such as IT Hardware,
cumulative value of such
Material Handling and Medical
proposals concurred during
Equipments etc. the reference
the year are available in the
to availability or otherwise in
proposal for capital sanction
the DGS&D Rate Contract are
by the appropriate CFA.
recorded and valid reasons for
cases, if any, for not proposing
the procurement through the
DGS&D Rate Contract is recorded
in the file.
Page 155
Services Correctness of information Adequacy of sources proposed The services as defined in the
provided in the proposal. Confirmation of commercial terms Purchase Manual under para
Acceptability of scope of and condition proposed in the No. 2.4.10 is procured through
services. proposal. the purchase procedure. The
Acceptability of technical terms note sheets are proposed by the
& conditions and quality / Plant & Maintenance/Stores/HR/
inspection requirement. IT/User Department supported
with Service Purchase Request
Acceptability of delivery schedule
(SPR) for the procurement of
proposed.
such services and submitted
Availability of reasonable basis for
to Finance Department for
the estimation of expenditure.
concurrence.
The procedure for procurement of
i. Confirmation of availability of
services proposed is as per the
funds under the respective
guidelines issued.
heads in the performance
In case of the proposal based budget.
on single source/ spot/tendering
ii. The correctness of reference
on nomination basis, justifiable
of Delegation of Power and in
reasons are indicated in the
case deviation from originator
proposals as per his wisdom.
of proposal, then concurrence
of next higher level may be
taken.
Draft Acceptability of the specification/ Address of the vendors and its SCOPE OF CONCURRENCE
Purchase scope of services composition. OF DRAFT PURCHASE ORDER/
Order/ Acceptability of the shelf life or Authenticity of the offers / CONTRACT:-
contract for life limitation of the products documents received from Confirmation of the proposal
procurement Acceptability of technical vendors. being put up in the appropriate
of Capital/ terms & conditions and quality Reference of export / import Purchase Format supported with
Project / inspection/ mandatory formalities. following documents unless the
Material / requirements Commercial evaluation statement, deviations are highlighted:
Revenue i. Information checklist for
Acceptability of delivery schedule Agenda/points for Negotiation,
items and purchase proposal.
proposed. were ever applicable,
Services
Technical evaluation statement, The procedure for tendering as ii. Draft Purchase Order (DPO)/
Price justification statement, approved in the CAR/MPR/Note contract,
The Purchase Format is filled Sheet has been followed. iii. Comparative statement,
up by the Initiating Authority/ Evidence of RFQ sent to vendors iv. PNC Recommendation, were
Recommending Authority with the is available in the file. ever applicable.
material information for decision Confirmation of authentication v. The draft purchase order/
making. of Tender Summary Sheet by contract has been put up
The procurement of the materials/ the members of authorised only based on the technically
services proposed is as approved Tender Opening Committee acceptable L1 offered price
in the CAR, MPR and Note Sheet indicating the RFQ sent to considering the tender
w.r.t. items and quantity. In case the No. of vendors, No of conditions such as package
of any variation, approval of CFA Response received, Number of price or item wise L1 price.
for amendment to CAR, MPR and quotations received, Number of
Note Sheet is available. nil quotations and the Number of
vendors not responded.
Page 156
Marking/disposition of late Confirmation of the tender vi. Approval for re-appropriation

tenders and unsolicited tenders submitted with the EMD amount obtained from the competent
as per procedure in the form and the amount as authority as per DOP, where
Confirmation that the vendors indicated in the RFQ, where ever ever proposal amount
have signed the IP as a pre bid applicable. exceeds for procurement of
qualification, as per requirement. Confirmation of tender evaluation capital items.
The proposals are supported as indicated in the RFQ. vii. Confirmation of inclusion
with the technical evaluation Where two bid systems are of Security Deposit/Bank
statement as per the given format proposed, commercial bids are Guaranty against advance
duly approved by the Technical opened only for the technically payment/ Performance
Evaluation Committee (TEC) / acceptable offers after the Guarantee and Indemnity
User department. approval by the competent Bond in the Purchase Order,
Correctness of Comparative authority wherever applicable.
statement of quotations including The draft purchase order/ viii.Correctness of reference of
the loading of offers and contract has been put up Delegation of Power.
determination of L1. only based on the technically
Reasonableness of the price of L1 acceptable L1 offered price
offer considered in the proposal considering the tender conditions
w.r.t. the previous procurement such as package price or item
prices, where ever previous wise L1 price.
procurement prices are available, Constitution of the PNC at the
or based on the estimation made. appropriate level, where ever
Confirmation of proposal being in required.
line with PNC recommendations/ Repeat Order proposed after
Offer/Standard Terms and placement of the original order,
conditions with deviations, if any, but within 12 months from the
highlighted. date of completion of the original
Confirmation of the following in order.
case of the proposal on Repeat Confirmation of inclusion of
Order Basis. Security Deposit/Bank Guaranty
-The proposal is for the against advance payment/
procurement of the same items/ Performance Guarantee and
services. Indemnity Bond in the Purchase
-The value of the proposal is Order, wherever applicable.
within 100% of the original order Correctness of reference of
placed. Delegation of Power.
-Repeat Order proposed after
placement of the original order,
but within 12 months from the
date of completion of the original
order.
Page 157
Amendment Acceptability of the amendment The amendment to the purchase AMENDMENT PROPOSED
to the proposed on delivery schedule order/contract issued for TO THE PURCHASE ORDER/
Purchase Acceptability of the modification procurement of capital/revenue CONTRACT WITH FINANCIAL
Order / in the specification / scope of items and services may arise IMPLICATIONS:-
contract service due to the following reasons with i. Change in price/payment
Acceptability of the modifications or without financial implication. terms.
in the technical terms & Such amendments are proposed ii. Change in statutory
conditions and quality / by the purchase department requirement.
inspection requirements based on the request from the
iii. Change in Terms and
vendor/Divisional requirement.
Change of delivery schedule, if conditions such as mode of
LD is applicable. Authenticity of the document transport, packing etc.
received from the vendor for
Amendment to quantity. AMENDMENT PROPOSED
amendment
Errors and omission having TO THE PURCHASE ORDER
Change in price/payment terms. / CONTRACT WITHOUT
financial implication.
Change in Terms and conditions FINANCIAL IMPLICATIONS:-
The proposal is put up with
such as mode of transport, i. Change in name and address
justifiable reasons for such
packing etc. of the vendor.
amendment as per his wisdom.
Errors and omission having ii. Change in part No. of the item
Request for amendment has
financial implication. without affecting form fit &
been initiated with back up
documentation. Confirmation of no changes in function.
the L1 status on account of the iii. Change of nomenclature of
Confirmation of amendment
change in price/other financial the item.
proposed not in violation of the
terms and conditions.
conditions of tender. iv. Change of unit of
Correctness of the DOP reference measurement without change
in total quantity.
v. Deletion of items.
SCOPE OF CONCURRENCE
FOR AMENDMENT:
i. The correctness of the
value of the proposal after
amendment.
ii. Confirmation of no changes
in the L1 status on account
of the change in price/other
financial terms and conditions.
iii. Correctness of the DOP
reference.
Page 158
Papers Technical para-meters / issue Approval for placement of i. Approval for placement of
put up for associated with the proposal Purchase Orders/award of Purchase Orders/award of
approval Approval for signing of MOU/ contract and amendment with contract and amendment with
of the Integrity Pact. financial implications for/on: financial implications for/on:
Procurement Procurement of goods, services
Sub- and works over and above
Committee DOP of Chairman, subject to
/ Design the conditions that the project/
Policy programme has the approval of
Committee / the Competent Authority.
Management
Development orders/
Committee
indigenisation programme
/ Board of
for establishing a new source
Directors.
of supply over and above a
threshold limit.
Single tender basis on JV
promoted by HAL exceeding Rs.
15.00 Crores.
Outsourcing to the Licensor/OEM
sources in case of exigencies
due to constraints of technology
absorption/capacity.
Page 159
ANNEXURE - I A
Procurement Guidelines for type of Material to be procured
Capital Equipment Purchase Manual Reference

Provisioning CAR, source selection, specification Chapter:2, Para 2.2.1., 2.2.2,
2.2..3, 2.4.11, 5.2, 5.6.4, 7.10.1
Annexure-8
Procurement Without Procurement under DGS&D /HAL Rate Chapter 6, Para 6.1
tendering Contract, other sources
Single Source/ Only where the Technology or process is Chapter 5, Para 5.7, 5.8, 5.9
Proprietary/Licensor/ recommended by Licensor/Designers Annexure-14
OEM approved Source
Limited Tendering If value is less than Rs. One Cr. And Chapter 5, Para 5.6
sources are established in Vendor directory
Open Tender If value is more than Rs. One Cr. Chapter 5, Para 5.4.1, 5.4.7, 5.5
along with the Para 5.3 I, 5.3
II & 5.3 III for EMD, SG, PBG.
Annexure 11, 11A
Spot Tendering Procurement limited to Rs. Five lakh on Chapter 5, Para 5.10
each occasion where there are varieties of
makes / products available in the market.
Tender Opening By Tender Opening Committee in all cases Chapter 7, Para 7.3 to 7.8
except Spot Tendering. In case of Spot
Tendering, Tenders are to be evaluated by
the Spot Purchase Committee.
Technical Evaluation By Technical Evaluation Committee in all Chapter 7, Para 7.9, 7.10
Cases except Spot Tendering. In case of
Spot Tendering offers to be evaluated by
Commercial Evaluation Technically accepted offers only to be Chapter 7, Para 7.9.8 to 7.9.13,
commercially evaluated. 7.10.3, 7.10.4.
Purchase Approval Chapter - 8
Page 160
ANNEXURE - I B
Direct Project Materials Purchase Manual Reference

Provisioning MPR, source selection, specification Chapter:2, Para 2.3, 2.4.11,
3.4, 3.9, 3.10,. 4.1, 4.2, 4.3, 5.2,
5.2.1, 5.6.4, 5.7.5, 5.9.2(l), 5.1,
Annexure-7.
Procurement Without If item is available on HAL Rate Contract Chapter 6, Para 6.5, Para 6.6,
tendering 6.9
Single Source/ Only where the item is approved or Chapter 5, Para 5.7, 5.8,
Proprietary/Licensor/ recommended by Licensor/ recommended 5.9.1,5.9.2,5.9.3,5.9.4, 5.9.5,
OEM approved Source by OEMs/Customers/ Proprietary type/ 5.9.6, 5.11, 5.14, Annexure-14
Available in SOP as recommended by
Design centers.
Limited Tendering Only to Approved sources Chapter 5, Para 5.6
Open Tender This is not mandatory for purchase of Chapter 5, Para 5.4.1 along with
Project Materials from already approved / the Para 5.3(I), 5.3 (II) & 5.3(III),
proprietary / developed sources/ license 5.4.7, 5.5. Annexure 11, 11A
agreement / Long terms contract.
Spot Tendering If concerned Division perceives that their Chapter 5, Para 5.10
exists advantage for Procurement of Value
more than Rs.5 Crs. then this can be
considered.
Tender Opening It can be applied provided the material is Chapter 7, Para 7.3 to 7.8
available in local market. In case of Project
material, Limited scope is envisaged.
Technical Evaluation By Tender Opening Committee in all cases Chapter 7, Para 7.9
Commercial Evaluation Technical Evaluation to be done by Chapter 7, Para 7.9.8 to 7.9.13,
Production Engineering/Planning. 7.10.3, 7.10.4
Purchase Approval Technically accepted offers only to be Chapter 8,
commercially evaluated.
Page 161
ANNEXURE - I C
Overhead / Commercial Materials Purchase Manual Reference

Provisioning MPR, source selection, specification Chapter:2, Para -2.4, 3.4,
4.1, 4.2, 5.2, 5.2.1, 5.9.2(L)
Annexure-7
Procurement Without If item is available on DGS&D rate Contract/ Para-6.1, 6.2, 6.3, 6.4, 6.6
tendering HAL Rate Contract and other sources. Annexure-9,10,16
Single Source/ Only one source is available, purchase from Chapter 5, Para 5.7, 5.9, 5.9.4,
Proprietary/Licensor/ Government/Semi Government agencies, Appendix-14
OEM approved Source Item of standard specification, requirement
of standardization.
Limited Tendering Sources approved in Vendor Directory, Chapter 5, Para 5.6, 5.12, 5.13.2
sample selection basis.
Open Tender If Requirement is more than Rs.5 Crs, open Chapter- 5, Para 5.4.1 along
tendering in two Bid may be followed. Web- with the Para 5.3 I, 5.3 II & 5.3 III,
tendering can also be followed in case of 5.12, 5.13.1. Annexure 11, 11A
value less than Rs.5 Crs.
Spot Tendering Value limited to Rs. One Lakh on each Chapter - 5, Para 5.10.1 to
occasion 5.10.4
Tender Opening By Tender Opening Committee in all cases Chapter 7, Para 7.3 to 7.8
Technical Evaluation By Technical Evaluation Committee in all Chapter 7, Para 7.9
Cases except Spot Tendering. In case
of Spot Tendering, Evaluation of offers
(to be evaluated by the Spot Purchase
Committee.)
Commercial Evaluation Technically accepted offers only to be Chapter 7, Para 7.9.8 to, 7.9.13,
commercially evaluated. 7.10.3, 7.10.4.
Purchase Approval Chapter - 8
Page 162
ANNEXURE - I D
Procurement for Design Development & Indigenisation Purchase Manual Reference

Provisioning MPR, source selection, specification Para-3.4, 3.6, 4.1, 4.2, 5.2,
5.7.5, 5.9.2(l), 7.11, 7.10.
Procurement Without If item is available on HAL RC and the Chapter VI, Para 6.4,6.6,
tendering same item is required for new development
Single Source/ Item during design & research stage is Chapter-5, Para 5.7.5, 5.8,
Proprietary/Licensor/ selected from Proprietary Source/Licensor 5.9.2(l), 5.9.3, 5.9.4, 5.11
OEM approved Source 's recommended OEM for other project and
the same is selected for new development.
Limited Tendering In case of Indigenisation /import Chapter 5, Para 5.6
substitution or for Technology development
to establish/sources, Limited tendering may
be followed.
Open Tender For selection of Systems for Aircraft/ Chapter 5, Para 5.4.1, 7.11 along
Helicopters/Accessories/ Indigenistion of with the Para 5.3.I, 5.3 II & 5.3 III
items for large requirement for EMD, SG, PBG and 5.12.
Spot Tendering Chapter 5, Para 5.10.5
Tender Opening Tender Opening procedures to be followed Chapter 7, Para 7.3 to 7.8
as defined in Purchase Manual.
Technical Evaluation By Technical Evaluation Committee as Chapter 7, Para 7.9, 7.10
defined in Purchase Manual
Commercial Evaluation Technically accepted offers only to be Chapter 7, Para 7.9.8, 7.9.9,
commercially evaluated. 7.10.3, 7.10.4, 7.12
Purchase Approval Chapter 8
Page 163
ANNEXURE - 1 E
Guidelines for various mode of Tendering
(for Reference only, details to be referred in the respective Chapter)
Mode of Placement of
Source Selection Tendering Tender Evaluation Remarks
Tendering Order
Open Tender Para 3.4.1 (i to Para 5.2, 5.2.7, Para 7.9, Chapter-8 Para 5.3 I for
vii), 3.9, 3.10 Para 5.4.1, 5.4.7, 5.12 7.10,7.11, 7.12, EMD, 5.3 II for SD,
5.5 7.13, 7.14 5.3. III for PBG.
Annexure-11 & 12for
Tender Terms &
Conditions
Limited Tender Para 3.8, 3.9, Para 5.6 Para 7.9, 7.10, Chapter-8 Para 5.3 II for SD,
3.10 7.11, 7.12, 7.13, 5.3. III for PBG.
7.14 Annexure-11 & 12for
Tender Terms &
Conditions
Proprietary Para 3.4.1 [(i) a,(i) Para 5.7 Para 7.9 Chapter-8 Para 5.3 II for SD,
Tender b, (vi) d, (vi) e, (vi) 5.3. III for PBG.
f, (vi) h] Annexure-11 & 12for
Tender Terms &
Conditions
Single Tender Para 3.4.1 (i a & Para 5.9.1 to Para 7.9 Chapter-8 Para 5.3 II for SD,
I b) 5.9.6 5.3. III for PBG.
Annexure-11 & 12for
Tender Terms &
Conditions
Customer Para 3.4.1 (v) c Para 5.11 Para 7.9. Chapter-8 Para 5.3 II for SD,
Nominated 5.3. III for PBG.
Annexure-11 & 12for
Tender Terms &
Conditions
Spot Tendering Local Sources To be done by To be done by Chapter-8 Annexure-11 & 12
Committee as Committee as for Tender Terms &
per Para 5.10.2 & per Para 5.10.2 & Conditions
5.10.3 5.10.3
Purchase Para 6.1 to 6.8 No Tendering No Tender Chapter-8 No Formal Tender
without Required for evaluation except for petty Terms & Conditions
Tendering Petty purchase & Required for purchase and for imprest & Petty
imprest Purchase Petty purchase & imprest Purchase
Para 6.7 & 6.8 imprest Purchase
Para 6.7 & 6.9
Single Para-7.14.10, Chapter-8 Single offer cases
response for 7.14.11, 7.14.13 exceeding Rs. One
Open/limited Cr to be pre audited
tender. by Systems Audit.
Joint Venture As per DoP for Para 5.9.4 Para-7.9 Chapter-8 For value exceeding
the product/ Rs. 15 Crs. Board
service covered approval.
by approved
business plan
of the JV and
notified by the
Corp. Office
Page 164
ANNEXURE - 2
Suggested Structure for Vendor Directory File
Field Field Name Type Width Information
1 VENREGNO Character 12 Code as per para 3.7
2 VENNAME Character 60 Vendor’s Name
3 DIVISION Character 40 Vendor’s Division
4 PARENT Character 60 Vendor’s parent Company
5 ADDRESS1 Character 60 Vendor’s Address
6 ADDRESS2 Character 60 Vendor’s Address
7 CITY Character 25
8 STATE Character 10
9 COUNTRY Character 20
10 POSTCODE Character 20 Zip Code/ postal code
11 PHONE Character 23 Land line
12 FAX Character 23
13 EMAIL Character 45 Company ’s E-mail
14 URL Character 60 Vendor’s Web site
15 SUBSID Character 60 Vendor’s subsidiary
16 SENEXEC Character 30 Name of most senior executive
17 POSITION Character 35 Design of most senior executive
18 CONTNAME1 Character 30 Dealing Contact – 1
19 CONTTITL1 Character 50 Designation of Contact -1
20 CONTPHON1 Character 23 Contact person Mobile/phone No.
21 CONTFAX1 Character 23 Contact person Fax No.
22 EMAIL1 Character 45 Contact person E-mail ID
23 CONTNAME2 Character 30 Dealing Contact – 2
24 CONTTITL2 Character 50 Contact person Mobile/phone No.
25 CONTPHON2 Character 23 Contact person Mobile/phone No.
26 CONTFAX2 Character 23 Contact person Fax No.
27 EMAIL2 Character 45 Dealing Contact E-mail ID
28 QUALITY Character 40 Quality certification of Vendor
29 SALES Character 30 Approx Annual sales
30 DESCRIPT Memo 10 Additional Information
31 LASTUPDT Date 8 Last date of this record’s updation
32 FL Character 1 Blank
Suggested Structure for Commodity File
Field Field Name Type Width Information

1 VENREGNO Character 12 Code as per para 3.7
2 COMOCODE Character 40 Item Details
Page 165
ANNEXURE - 2 A
MATERIAL GROUP CODES (To be brought in line with IFS application)
MATERIAL GROUP CODE

Direct Project Materials
Raw Materials 110
Consumables 120
Bought out Finished Parts 130
Standard Parts - IS, MS, NAS, AGS, Gost and parts conforming to Standard 131
Specifications.
Special Tools & Test Equipment (Specific to Project and forming part of DRE) 132
SACL, Ground Tools forming part of Aircraft/Engine/End Product Delivery 133
Overhead Materials
Raw Materials for Jigs/Fixtures/Tooling 140
Consumables for Commercial Applications 141
Standard Parts for Jigs/Fixtures/Tooling and other commercial applications. 142
Maintenance Spares - Mechanical 143
Maintenance Spares - Electrical 144
Maintenance Spares - Electronic 145
Shop Supplies 146
Loose Tools & Equipment - Shop Tools, Gages and hand Tools 161
Loose Tools & Equipment - Cutting Tools 162
Welfare & Other items, incl stationery, medical, canteen supplies etc 170
Capital
Construction Material 151
Plant & Machinery 152
Factory Equipment 153
Air-conditioning Equipment 154
Electrical & Electronics Equipment 155
Office Equipment & Furniture 156
Transport Vehicles 157
Compute & associated equipment 158
Page 166
ANNEXURE - 2 B
COUNTRY & CURRENCY CODES
This list states the country names (official short names in English) in alphabetical order as given in ISO 3166-1,
the corresponding ISO 3166-1-alpha-2 country codes and the currency codes against country names (official
short names in English) in alphabetical order of Country as given in ISO 4217 and corresponding currency
names.
Country Country Currency

Code Code
AF Afghanistan, Afghanis AFA
AL Albania, Leke ALL
DZ Algeria, Dinars DZD
US America (United States of America), Dollars USD
AS American Samoa, United States Dollars USD
AD Andorra, Euro EUR
AO Angola, Kwanza AOA
AI Anguilla, East Caribbean Dollars XCD
AG Antigua and Barbuda, East Caribbean Dollars XCD
AR Argentina, Pesos ARS
AM Armenia, Drams AMD
AW Aruba, Guilders AWG
AU Australia, Dollars AUD
AT Austria, Euro EUR
AZ Azerbaijan, Manats AZM
BS Bahamas, Dollars BSD
BH Bahrain, Dinars BHD
BD Bangladesh, Taka BDT
BB Barbados, Dollars BBD
BY Belarus, Rubles BYR
BE Belgium, Euro EUR
BZ Belize, Dollars BZD
BJ Benin, Communauté Financière Africaine Francs XOF
BM Bermuda, Dollars BMD
BT Bhutan, India Rupees INR
BO Bolivia, Bolivianos BOB
BA Bosnia and Herzegovina, Convertible Marka BAM
BW Botswana, Pulas BWP
BV Bouvet Island, Norway Kroner NOK
BR Brazil, Real BRL
IO British Indian Ocean Territory, United States Dollars USD
BN Brunei Darussalam, Dollars BND
BG Bulgaria, Leva BGL
BF Burkina Faso, Communauté Financière Africaine Francs XOF
BI Burundi, Francs BIF
Page 167

Code Code
KH Cambodia, Riels KHR
CM Cameroon, Communauté Financière Africaine Francs XAF
CA Canada, Dollars CAD
CV Cape Verde, Escudos CVE
KY Cayman Islands, Dollars KYD
CF Central African Republic, Communauté Financière Africaine XAF
TD Chad, Communauté Financière Africaine Francs XAF
CL Chile, Pesos CLP
CN China, Yuan Renminbi CNY
CX Christmas Island, Australia Dollars AUD
CC Cocos (Keeling) Islands, Australia Dollars AUD
CO Colombia, Pesos COP
KM Comoros, Francs KMF
CG Congo/Brazzaville, Communauté Financière Africaine Francs XAF
CD Congo/Kinshasa, Francs CDF
CK Cook Islands, New Zealand Dollars NZD
CR Costa Rica, Colones CRC
HR Croatia, Kuna HRK
CU Cuba, Pesos CUP
CI Curaço, Netherlands Antilles Guilders ANG
CY Cyprus, Pounds CYP
CZ Czech Republic, Koruny CZK
DK Denmark, Kroner DKK
DJ Djibouti, Francs DJF
DM Dominica, East Caribbean Dollars XCD
DO Dominican Republic, Pesos DOP
TP East Timor, Indonesia Rupiahs IDR
EC Ecuador, United States Dollars USD
EG Egypt, Pounds EGP
IE Eire (Ireland), Euro EUR
SV El Salvador, Colones SVC
UK England (United Kingdom), Pounds GBP
GQ Equatorial Guinea, Communauté Financière Africaine Francs XAF
ER Eritrea, Ethiopia Birr ETB
EE Estonia, Krooni EEK
ET Ethiopia, Birr ETB
FK Falkland Islands (Malvinas), Pounds FKP
FO Faroe Islands, Denmark Kroner DKK
FJ Fiji, Dollars FJD
FI Finland, Euro EUR
FR France, Euro EUR
GF French Guiana, Euro EUR
PF French Pacific Islands (French Polynesia), Comptoirs Français XPF
Page 168

Code Code
TF French Polynesia (French Pacific Islands), Comptoirs Français XPF
GA Gabon, Communauté Financière Africaine Francs XAF
GM Gambia, Dalasi GMD
GE Georgia, Lari GEL
DE Germany, Euro EUR
GH Ghana, Cedis GHC
GI Gibraltar, Pounds GIP
xx Gold, Ounces XAU
UK Great Britain (United Kingdom), Pounds GBP
GR Greece, Euro EUR
GL Greenland, Denmark Kroner DKK
GD Grenada, East Caribbean Dollars XCD
GP Guadeloupe, Euro EUR
GU Guam, United States Dollars USD
GT Guatemala, Quetzales GTQ
GN Guinea, Francs GNF
GW Guinea-Bissau, Communauté Financière Africaine Francs XOF
GY Guyana, Dollars GYD
HT Haiti, Gourdes HTG
HM Heard Island and McDonald Islands, Australia Dollars AUD
VA Holy See, (Vatican City), Euro EUR
HN Honduras, Lempiras HNL
HK Hong Kong, Dollars HKD
HU Hungary, Forint HUF
IS Iceland, Kronur ISK
IN India, Rupees INR
ID Indonesia, Rupiahs IDR
xx International Monetary Fund (IMF), Special Drawing Rights XDR
IR Iran, Rials IRR
IQ Iraq, Dinars IQD
IE Ireland (Eire), Euro EUR
IL Israel, New Shekels ILS
IT Italy, Euro EUR
JM Jamaica, Dollars JMD
JP Jan Mayen and Svalbard, Norway Kroner NOK
JO Jordan, Dinars JOD
KZ Kazakstan, Tenge KZT
KE Kenya, Shillings KES
KI Kiribati, Australia Dollars AUD
KP Korea (North), Won KPW
KR Korea (South), Won KRW
KW Kuwait, Dinars KWD
KG Kyrgyzstan, Soms KGS
Page 169

Code Code
LA Laos, Kips LAK
LV Latvia, Lati LVL
LB Lebanon, Pounds LBP
LS Lesotho, Maloti LSL
LR Liberia, Dollars LRD
LY Libya, Dinars LYD
LI Liechtenstein, Switzerland Francs CHF
LT Lithuania, Litai LTL
LU Luxembourg, Euro EUR
MO Macau, Patacas MOP
MK Macedonia, Denars MKD
MG Madagascar, Malagasy Francs MGF
MW Malawi, Kwachas MWK
MY Malaysia, Ringgits MYR
MV Maldives (Maldive Islands), Rufiyaa MVR
ML Mali, Communauté Financière Africaine Francs XOF
MT Malta, Liri MTL
MH Marshall Islands, United States Dollars USD
MQ Martinique, Euro EUR
MR Mauritania, Ouguiyas MRO
MU Mauritius, Rupees MUR
YT Mayotte, Euro EUR
MX Mexico, Pesos MXN
FM Micronesia (Federated States of), United States Dollars USD
MD Moldova, Lei MDL
MC Monaco, Euro EUR
MN Mongolia, Tugriks MNT
MS Montenegro and Serbia, Yugoslavia New Dinars YUM
MA Morocco, Dirhams MAD
MZ Mozambique, Meticais MZM
MM Myanmar (Burma), Kyats MMK
NA Namibia, Dollars NAD
NR Nauru, Australia Dollars AUD
NP Nepal, Rupees NPR
NL Netherlands Antilles, Guilders ANG
AN Netherlands, Euro EUR
NC New Caledonia, Comptoirs Français du Pacifique Francs XPF
NZ New Zealand, Dollars NZD
NI Nicaragua, Gold Cordobas NIO
NE Niger, Communauté Financière Africaine Francs XOF
NG Nigeria, Nairas NGN
NU Niue, New Zealand Dollars NZD
NF Norfolk Island, Australia Dollars AUD
Page 170

Code Code
MP Northern Mariana Islands, United States Dollars USD
NO Norway, Kroner NOK
OM Oman, Rials OMR
PK Pakistan, Rupees PKR
PW Palau, United States Dollars USD
PS Palladium, Ounces XPD
PA Panama, United States Dollars USD
PG Papua New Guinea, Kina PGK
PY Paraguay, Guarani PYG
PE Peru, Nuevos Soles PEN
PH Philippines, Pesos PHP
PN Pitcairn Islands, New Zealand Dollars NZD
PL Poland, Zlotych PLN
PT Portugal, Euro EUR
PR Puerto Rico, United States Dollars USD
QA Qatar, Rials QAR
RE Réunion, Euro EUR
RO Romania, Lei ROL
RU Russia, Rubles RUR
RW Rwanda, Francs RWF
SH Saint Helena, Pounds SHP
KN Saint Kitts and Nevis, East Caribbean Dollars XCD
LC Saint Lucia, East Caribbean Dollars XCD
PM Saint Pierre and Miquelon, Euro EUR
VC Saint Vincent and The Grenadines, East Caribbean Dollars XCD
WS Samoa (American), United States Dollars USD
SM Samoa, Tala WST
ST San Marino, Euro EUR
SA Saudi Arabia, Riyals SAR
SN Senegal, Communauté Financière Africaine Francs XOF
SC Seychelles, Rupees SCR
SL Sierra Leone, Leones SLL
SG Singapore, Dollars SGD
SK Slovakia, Koruny SKK
SI Slovenia, Tolars SIT
SB Solomon Islands, Dollars SBD
SO Somalia, Shillings SOS
ZA South Africa, Rand ZAR
GS South Georgia, United Kingdom Pounds GBP
ES Spain, Euro EUR
LK Sri Lanka, Rupees LKR
SD Sudan, Dinars SDD
SR Suriname, Guilders SRG
Page 171

Code Code
SJ Svalbard and Jan Mayen, Norway Kroner NOK
SZ Swaziland, Emalangeni SZL
SE Sweden, Kronor SEK
CH Switzerland, Francs CHF
SY Syria, Pounds SYP
TW Taiwan, New Dollars TWD
TJ Tajikistan, Russia Rubles RUR
TZ Tanzania, Shillings TZS
TH Thailand, Baht THB
TG Togo, Communauté Financière Africaine Francs XOF
TK Tokelau, New Zealand Dollars NZD
TO Tonga, Pa'anga TOP
TT Trinidad and Tobago, Dollars TTD
TN Tunisia, Dinars TND
TR Turkey, Liras TRL
TM Turkmenistan, Manats TMM
TC Turks and Caicos Islands, United States Dollars USD
TV Tuvalu, Tuvalu Dollars TVD
UG Uganda, Shillings UGX
UA Ukraine, Hryvnia UAH
AE United Arab Emirates, Dirhams AED
GB United Kingdom, Pounds GBP
UM United States Minor Outlying Islands, United States Dollars USD
US United States of America, Dollars USD
UY Uruguay, Pesos UYU
UZ Uzbekistan, Sums UZS
VU Vanuatu, Vatu VUV
VE Venezuela, Bolivares VEB
VN Viet Nam, Dong VND
VI Virgin Islands (American), United States Dollars USD
VG Virgin Islands (British), United States Dollars USD
WF Wallis and Futuna Islands, Comptoirs Français du Pacifique XPF
EH Western Sahara, Morocco Dirhams MAD
YE Yemen, Rials YER
YU Yugoslavia, New Dinars YUM
ZM Zambia, Kwacha ZMK
ZW Zimbabwe, Zimbabwe Dollars ZWD
Page 172
ANNEXURE - 3
Suggestion for inclusion of a Source of Supply in Vendors Directory
(To be given by User/Functional Group)
Vendor's Name:
Vendor's Parent Company
Vendor’s Address
City
State & Postcode
Country
Phone
Fax
E-mail
URL
Products for which recommended
(Broad category ex. Raw material /
Proprietary / Standard Parts etc. and
sub-category ex. Aluminum billets /
Steel rods / Titanium sheets/ Sealants /
Lubricants etc.)
Whether vendor is OEM / authorized
distributor / dealer / stockist
(please indicate if possible)
Quality Certification
Annual Sales of vendor
Additional Information, if any.
Submitted by:
Designation :
Date :
Source of information:
Page 173
Page 174
Registration
1
Number
2
Date of Registration
Date of last updation/
3
Renewal
4
Vendor’s Name
5
Postal Address
6
City
7
Country
8
Telephone No.
9
Fax No.
Format for Vendor Directory
10
E-mail
11
12 Name/s
Designation
Contact Person (s)
13
Phone
Category / Sub-category of
14
items
ANNEXURE - 3 A
ANNEXURE - 3 B
APPROVED VENDOR DIRECTORY
Name of Division / Office: ………………………
Date of Update of Vendor Directory:……………….
Products / Services dealt by

Sl. No Vendor’s ID Vendor’s Name Vendor’s Address Country
Vendors

Page 175
ANNEXURE - 4
IMM Department
Application for Registration as Approved Supplier (Indian Suppliers)
Ref:.............................
(Office Use Only)
Complete all sections of the form, sign the declaration and send the completed form and attachments in an
envelope marked ‘Application for Registration as Approved Supplier’:
Head of IMM Deptt

Hindustan Aeronautics Limited
………………………….Division
The columns in this form may be filled up. No column should be left blank. If applicant has no information to
give in a particular column, “Nil” may be mentioned. In case, information not relevant in your case, please
indicate “Not Applicable” in such column
Section 1: Applicant Particulars

Registration Category Original Equipment Manufacturer (OEM)
Stockist/ Distributor
Small Scale Industry
Public Sector Unit
Govt. Deptt.
Consortium / State/ Govt. Agencies
Others (Please mention)
Name of the Individual/
Firm/ Company:
Constitution or Legal
status
Registration Number: Registering: Date of
Authority Registration
Registered Address Office:
E-mail ID :
URL
Address of Factory
Senior Most Executive

Name :
Designation :
Contact / Dealing Person
Name :
Designation :
Address for
Correspondence:
Tel. No. Fax No.

Mobile No (Contact / Email ID :
Dealing person)
Page 176
Section 2: Applicant profile
2.1 Type of Ownership:
Individual / Proprietary Partnership Ltd. Company (Pvt./ Public)
PSU/ Govt. Undertaking Research Institute Trust
Joint Venture or other tie-up for technology, equipment, financial backing and/or Project
Management (Please specify………………………………………………………………………)
Other, please specify ……………………………………………………………………………………
• Enclose copies of Income Tax Return (in case of individual)/Partnership Deed/Articles & Memorandum
of Association/ JV Agreement/ Certificate of incorporation/ Certificate of Registration etc as applicable,
duly certified by Chartered Accountant.
2.2 (a) Are you a M.S.E Yes / No

If yes, please enclose copy of certificate.
(b) Do you have ISO 9001-2008/QMS Certification (AS 9100B/C)/ISO 14001 Certification etc?
Yes / No
If yes, please specify & indicate validity:
(c) In case of certification by other accredited institutions, please give details :
Institution Type of Certification Valid up to (date)
(d) Give details of registration, if any, with HAL or its Divisions (Specify Division)/ DGS & D/ PSUs/ Central/
State Govt. /Major Private Institutions/ Others (Specify) :
Company Registration Number Dated Validity Class/ Type of Registration
• Attach necessary certificates from the registering authorities.
2.3 Give the floor area of your factory and Offices. If you own more than one factory, please give
separate details for each unit:
Factory or Office Location Area in Square Meters
Page 177
2.4 Give a list of your major products / services, you intend to offer as a supplier:
Sl. Are you Original Equipment

Major Products / Services
No. Manufacturer for listed product
Yes / No
Yes / No
Yes / No
Yes / No
Yes / No
Yes / No
• Please enclose your Company/ Product Catalogues
(In case of Stockist / Distributor please enclose relevant authorization from respective OEM/
Manufacturer /Principals)
2.5 Give a List of your major Customers
Serial No. of the Product/ Service (from para

Sl.No. Customer’s Name & Address
2.3) provided to the Customer
• Please attach Proof in the form of Purchase Order copies/ Invoice etc
2.6 List the names of Owners/ Partners/Promoters and Directors/ Company Secretary/ Holder of
Power of Attorney, as applicable, in the format detailed below:
Name of Owners/ Partners/ Promoters and Directors/ Company Secretary/ Relationship of the person
Holder of Power of Attorney with the firm
2.7 List the names & addresses of all associated, subsidiary & holding companies, including trusts
Company Name Address Nature of Business Relationship with Applicant
Page 178
Section 3: Financial details
3.1 Annual Turnover in the past 3 years:
Year
Annual Turn-over (Rs. Lakhs)
Profit/ Loss (Rs. Lakhs)
Attach the audited Balance sheet and Profit & Loss Account the above.
3.2 IMPORTANT NOTE – Financial Assessment:
Before the assessment of this application can be completed, a representative from HAL may contact
you concerning the financial and technical information that you provide. Your co-operation is required
to assist in the assessment process. Failure to co-operate may affect registration.
The assessment report is specifically for use by HAL for the purpose of assessing Suppliers for
registration, and will be treated as strictly confidential.
3.3 Bank(s) details:
Will you authorise your Bank/s to provide information to HAL with a

YES / NO
reference as to your financial position, if required?
Name of Bank
& Branch
Name and
Designation of Contact Person:
Address:
Tel No:
3.4 Details of Income Tax assessed, as per clearance Certificate, in the last 3 years :
YEAR
Amount Assessed (Rs. Lakhs)
Amount paid/
payable
(Rs. Lakhs)
3.5 Sales/Service Tax Details:
Central sales Tax Registration No.:…………………………….
State sales Tax registration No:………………………………..
Service Tax registration No:………………………………..
(Copies of Sales Tax registration certificate shall be attached)
Details of Sales Tax assessed, as per clearance Certificate, in the last 3 years:
YEAR
Amount paid/ payable (Rs. Lakhs)
Page 179
• Attach copies of Sales Tax Clearance Certificates for the past 3 years.
4 In the last 3 years, has your firm, or any firm with which any of your company's owners, officers
or partners were associated, been debarred, disqualified, removed, business dealings banned or
otherwise prevented from bidding ? YES / NO
If yes, State the reference to Customer and their orders and the basis for the action.
5 Please provide any additional information, which will help you in securing registration with HAL.
6 DECLARATION
(This declaration should be completed by Proprietor/ Partner/ Director or other Senior Manager who
has the authority to do so.)
I/We declare and confirm that –
a. The HAL Conditions of Registration are acceptable.
b. All information and attachments submitted in this application are true and correct.
c. I/We are aware that any false information provided herein will result in the rejection of my application
and cancellation of any registrations granted.
d. I/We shall be bound by the acts of duly constituted attorney who has signed this application and
of any other person who in future shall be appointed by us in his place to carry on business of the
concern whether or not an intimation of such changes is given to HAL.
e. I / We have read and understood HAL’s General Conditions of Contract and agree to abide by the
same in all respects,
f. I/We undertake to communicate promptly to HAL any changes in condition or working of the firm.
Signed: ………………..…………………..
Name: ……………………………………..
Position: …………….....…………………
Date: ………………………………………
Details of person holding the Power of Attorney (If different from above)
(attach attested copy of Power of Attorney)
Name ………………………………. Tel. No. ( … ) … …………... Mobile No..………………….
Position ……………………………………..Fax No. ( … ) ………………………...
Official Seal
Note: Vendor is requested to get e-registered on line at HAL E-Portal. Visit http://eproc.hal-india.com or
www.hal-india.com
Page 180
ANNEXURE - 4 A
IMM Department
Application for Registration as Approved Supplier (Indian Suppliers)
Drugs/Non-Drugs/Medical Equipment
Ref:............................
(Office Use Only)
Complete all sections of the form, sign the declaration and send the completed form and attachments in an
envelope marked ‘Application for Registration as Approved Supplier’:
Head of IMM Deptt
………………………….Division
………………………
………………………
The columns in this form may be filled up. No column should be left blank. If applicant has no information to
give in a particular column, “Nil” may be mentioned. In case, information not relevant in your case, please
indicate “Not Applicable” in such column
Section 1: Applicant Particulars
Registration Category Original Equipment Manufacturer (OEM)

Stockist/ Distributor
Small Scale Industry
Public Sector Unit
Govt. Deptt.
Consortium / State/ Govt. Agencies
Others (Please mention)
Name of the Individual/
Firm/ Company:
Constitution or Legal
status
Registration Number: Registering: Date of
Authority Registration
Registered Address Office:
E-mail ID :
URL
Address of Factory
Page 181
Senior Most Executive

Name :
Designation :
Contact / Dealing Person
Name :
Designation :
Address for
Correspondence:
Tel. No. Fax No.
Mobile No (Contact / Email ID :

Dealing person)
Section 2: Applicant profile
2.1 Type of Ownership:
Individual / Proprietary Partnership Ltd. Company (Pvt./ Public)
PSU/ Govt. Undertaking Research Institute Trust
Joint Venture or other tie-up for technology, equipment, financial backing and/or Project
Management (Please specify………………………………………………………………………)
Other, please specify ……………………………………………………………………………………
Enclose copies of Income Tax Return (in case of individual)/Partnership Deed/Articles & Memorandum of
Association/ JV Agreement/ Certificate of incorporation/ Certificate of Registration etc as applicable, duly
certified by Chartered Accountant.
2.2 (a) Are you a M.S.E Yes / No

If yes, please enclose copy of certificate.
(b) Do you have ISO 9001-2008/QMS Certification (AS 9100B/C)/ISO 14001 Certification etc?
Yes/ No
If yes, please specify & indicate validity:
(c) Do you have license from Drug Controller, if yes, indicate validity. Yes / No
(d) In case of certification by other accredited institutions, please give details :
Institution Type of Certification Valid up to (date)
Page 182
(e) Give details of registration, if any, with major hospitals / HAL (Specify Division)/ DGS & D/ PSUs/
Central/State Govt. /Major Private Institutions/ Others (Specify) :
Company / Registration Class/ Type of

Dated Validity
Hospital Number Registration
Attach necessary certificates from the registering authorities.
2.3 Give a list of your major products, you intend to offer as a supplier:
Sl. Major Drugs / Non-drugs / Medical Equipments for which you Are you Original Manufacturer for
No. want to register listed product
Yes / No
Yes / No
Yes / No
Yes / No
Yes / No
Yes / No
Please enclose your Company/ Product Catalogues
(In case of Stockist / Distributor please enclose relevant authorization from respective OEM/
Manufacturer /Principals)
2.4 Give a List of your major Customers
Sl.No. Customer’s Name & Address Product
Please attach Proof in the form of Purchase Order copies/ Invoice etc
2.5 List the names of Owners/ Partners/Promoters and Directors/ Company Secretary/ Holder of
Power of Attorney, as applicable, in the format detailed below:
Name of Owners/ Partners/ Promoters and Directors/ Company Secretary/ Holder Relationship of the
of Power of Attorney person with the firm
Page 183
2.6 List the names & addresses of all associated, subsidiary & holding companies, including trusts
Company Name Address Nature of Business Relationship with Applicant
Section 3: Financial details
3.1 Annual Turnover in the past 3 years:
Year
Annual Turn-over (Rs. Lakhs)
Profit/ Loss (Rs. Lakhs)
Attach the audited Balance sheet and Profit & Loss Account for the above.
3.2 IMPORTANT NOTE – Financial Assessment:
Before the assessment of this application can be completed, a representative from HAL may contact you
concerning the financial and technical information that you provide. Your co-operation is required to assist in
the assessment process. Failure to co-operate may affect registration.
The assessment report is specifically for use by HAL for the purpose of assessing Suppliers for registration,
and will be treated as strictly confidential.
3.3 Bank(s) details:
Will you authorise your Bank/s to provide information to HAL with a YES / NO
reference as to your financial position, if required?
Name of Bank & Branch
Name and Designation of Contact Person:
Address: Tel No:
IFSC Code
3.4 Details of Income Tax assessed, as per clearance Certificate, in the last 3 years :
YEAR
Amount paid/ payable (Rs. Lakhs)
3.5 Sales/Service Tax Details:
Central sales Tax Registration No.:…………………………….
State sales Tax registration No:………………………………..
Service Tax registration No:………………………………..
(Copies of Sales Tax registration certificate shall be attached)
Page 184
Details of Sales Tax assessed, as per clearance Certificate, in the last 3 years:
YEAR
AmountAssessed (Rs. Lakhs)
Amount paid/payable (Rs. Lakhs)
Attach copies of Sales Tax Clearance Certificates for the past 3 years.
4 In the last 3 years, has your firm, or any firm with which any of your company's owners, officers
or partners were associated, been debarred, disqualified, removed, business dealings banned or
otherwise prevented from bidding ? YES / NO
If yes, State the reference to Customer and their orders and the basis for the action.
5 Please provide any additional information, which will help you in securing registration with HAL.
6 DECLARATION:
(This declaration should be completed by Proprietor/ Partner/ Director or other Senior Manager who
has the authority to do so.)
I/We declare and confirm that –
a. The HAL Conditions of Registration are acceptable.
b. All information and attachments submitted in this application are true and correct.
c. I/We are aware that any false information provided herein will result in the rejection of my
application and cancellation of any registrations granted.
d. I/We shall be bound by the acts of duly constituted attorney who has signed this application and
of any other person who in future shall be appointed by us in his place to carry on business of the
concern whether or not an intimation of such changes is given to HAL.
e. I / We have read and understood HAL’s General Conditions of Contract and agree to abide by the
same in all respects,
g. I/We undertake to communicate promptly to HAL any changes in condition or working of the firm.
Signed: …………………………………..
Name: …………………………………..
Position: …………………………………..
Date: …………………………………..
Page 185
Details of person holding the Power of Attorney (If different from above)
(attach attested copy of Power of Attorney)
Name ………………………………. Tel. No. ( … ) … …………... Mobile No..………………….
Position ……………………………………..Fax No. ( … ) ………………………...
Official Seal
<
www.hal-india.com
Page 186
ANNEXURE - 4 B
Check List for filling up the Vendor Registration Form
Check list for Indian vendors
Sl Details Required as per Form Proof Required Yes/No
1 Company Registration/ Address: (As applicable to your company)
For Proprietary firm - where firm Notary certified affidavit for Proof of Company
a. [ ]
registration is not mandatory address
Copy of Registration with Registrar of Firm (In case [ ]
of Partnership Firm)
For Partnership firm - where firm
b. Partnership Deed [ ]
registration is not mandatory
Notary certified affidavit for Proof of Company [ ]
address
For companies registered under Memorandum of Association [ ]
c. Company Act 1956 Certificate of Incorporation [ ]
Certificate of Registration [ ]
2 Income Tax registration PAN [ ]
If Stockist / Distributor - Authorized Distributor

3 Registration Category [ ]
Certificate / Copy of Agreement with Principal/ OEM.
Registration with N.S.I.C.
4* N.S.I.C. Certificate [ ]
(In case of SSI only)
5 Quality Certification ISO Certificate/ Any Other Certificate [ ]
Registration with other HAL

6 Registration Certificate [ ]
Divisions/ Organizations
7 List of Major Products/ Services Product Catalog/ Service Catalog [ ]
Past Purchase Orders Copy

8 List of Major Customers [ ]
Any other proof
Annual Turnover Audited Balance Sheet of FY… last three years [ ]
9
(of Past 3 yrs) Audited Profit / Loss A/C of FY… last three years [ ]
Bank(s) Details
10 ECS Format duly certified by Bank [ ]
(In enclosed ECS format)
Income Tax Assessed
11 Copy of ITR Acknowledgment for AY... last 03 years. [ ]
(of Past 3 yrs)
Tax Details Copy of Registration under
12 (CST / VAT / TIN/ Service Tax/ CST/ VAT/ TIN/ Service Tax / Excise [ ]
Excise) (As applicable to your company)
13 Details & Mandatory document uploaded on HAL e-proc portal for ‘e-Registration’ [ ]
Note - Kindly provide all current documents as above, tick mark and send back along with form.
* Please refer annexure - 17 (Sl.No. 1-Para 2)
Page 187
ANNEXURE - 4 C
No: Dated: ............................
To,
…………………………….
…………………………….
Sub: Vendor Registration
Dear Sir,
Reference is made to your application for Vendor registration dt………
2. We are pleased to inform you that M/s.________________________have been registered as approved

supplier/ contractor/ service provider as per details given below:
i Vendor Code
ii Date of Registration
iii Validity of Registration ____ years
iv Registration category OEM/ Authorized distributor/ Stockist
v Registration granted for Stores/ Services
vi Category of Stores/ services for which registered
3. Your registration at HAL-___________Division will be governed by HAL rules, directives etc. for Vendor
Registration.
4. This registration will be renewed after the validity period at the discretion of HAL-__________ Division.
5. Please note that this registration does not guarantee your firm/company, award of any/ all the orders/
contracts or inclusion on a particular tender list. Further, this registration shall not be a binding on
HAL- Division to float the enquiries only to the registered vendors.
6. You are required to keep confidential all trade / business / technical information etc. received from
HAL.
7. You will not resort to any publicity / advertisement of registration with HAL, without prior permission
of HAL.
8. HAL reserves the right to remove your firm/company’s name from registered list at any time any of the
following grounds / or will render registration in valid :
a) Failing or neglecting to quote in response to invitation to tender on ten successive occasions.
b) Failing to abide by the agreed terms & conditions of signed contract/ order
c) Failure to execute the contracts/orders to HAL’s satisfaction.
d) Making a false declaration to HAL.
e) Failing to meet quality services
f) Scoring a vendor rating of less than 50 consecutively for over last 03 years
Page 188
g) The firm is declared bankrupt or insolvent
h) In the opinion of the HAL, retention of firm’s name in registered list is not in public interest.
i) Any other reason, which might disable your firm from satisfactorily performing the execution of
likely contracts
j) Using corrupt or unfair means to gain advantage
9. Any of the following will also render registration in valid :
a) In case, it comes to our notice that you have rendered of false information / Mis- representation/
suppression/distortion of facts in the application for registration/ at time of assessment, it will
result in cancellation of your registration and HAL-__________Division shall reserve the right to
take suitable action.
b) Any other ground, which in the opinion of HAL renders the retention of the registration undesirable
in the interest of the Company.
10. You will be responsible for informing HAL-__________Division immediately (within 30 days) in case of
any change in information furnished by you for the registration.
Please acknowledge the receipt.
Yours faithfully,
For Hindustan Aeronautics Ltd.,
( )
Vendor Registration Cell
Page 189
ANNEXURE - 5
IMM Department
Application for Registration as Approved Supplier (Foreign Suppliers - Manufacturer)
Ref:........................
(Office Use Only)
1 Name of the Firm

2 Parent Company
Address
City
3
State & Zip Code
Country
4 Contact Name
5 Phone
6 Fax
7 E-mail
8 Web site
Original Equipment Manufacturer (OEM) ❏
9 Category Consortiums/ State/ Govt. Agencies ❏
Others ❏
Limited Company ❏
Partnership ❏
Individual ❏
10 Company Type
Educational or Research Institute ❏
Trust ❏
Others ❏
11 Capital Employed
12 Annual Sales
13 Quality Certifications/ Accredition
14 Employees (Total)
15 Products / Services
16 Major Customers
Address of Liaison office /Branch
office/subsidiary in India if any with
17
details of necessary clearance from
Reserve Bank of India
Details of authorised Stockist/
18 Distributor/ Service Centers if any to
manage HAL supplies
19 Company’s Catalogue/ Brochure enclosed. Yes No
Date………………. Name……………………………………
Position…………………………………
www.hal-india.com
Page 190
ANNEXURE - 6
IMM Department
Application for Registration as Approved Supplier
(Foreign Suppliers Stockist /Distributor)
Ref:..................
(Office Use Only)
1 Name of the Firm

Name of OEM(s)
2
represented by the firm
Address for communication
City
3
State & Zip Code
Country
4 Contact Name
5 Phone
6 Fax
7 E-mail
Address of Registered office with
proof thereof
(Certified copy of Charter,

Memorandum of Association and
7A Articles of association, Income tax,
sales Tax registration as per law of
country of registration and Country of
Business operation if different from
country of registration to be enclosed)
Document proof of OEM authorization
8
for Stockist/ distributor
9 Web site
Stockist ❏
10 Category Distributor ❏
Others ❏
Limited Company ❏
Partnership ❏
11 Company Type Individual ❏
Educational or Research Institute ❏
Trust ❏
12 Capital Employed
Page 191
13 Annual Sales
14 Equipment
15 Facilities (sq. mtr)
16 Quality Certifications/ Accredition
17 Employees (Total)
18 Key Sector
19 Products / Services
20 Major Customers
21 Company’s Catalogue/ Brochure enclosed. Yes No
Date………………. Name……………………………………
Position…………………………………
Company
www.hal-india.com
Page 192
ANNEXURE - 6 A
Check list for Foreign vendors/stockist/Distributors
Sl.No. Details Required Proof Required Yes/ No

A certified copy of the charter, statutes, or
Memorandum and Articles of the company or other
Details of Business
1 instrument constituting or defining the constitution [ ]
Establishment
of the company; and if the instrument is not in the
English language, a certified translation thereof
Full address of Registered
Notary certified affidavit for Proof of Company
2 office of the company/ firm & [ ]
address
proof thereof
OEM/ Distributor/ Stockist
If Stockist / Distributor - Authorized Distributor
3 category and OEM [ ]
Certificate / Copy of Agreement with Principal/ OEM.
authorizations
Sales Tax Registration as
4 per law of the country of Copy of Sales Tax Registration [ ]
registration
Income Tax Registration as
5 per law of the country of Copy of Income Tax Registration [ ]
registration
Certification from reputed
6 Certificate of accreditation [ ]
Accreditation agencies
Major customers list
7 Past Purchase Orders or any other suitable document [ ]
8 Product Details Product catalogs/ Brochures [ ]

9 Annual Sales Audited Balance Sheet of FY …….. Last 03 years [ ]
10 Any other important detail [ ]
Details & Mandatory
document uploaded on
11 Yes/ No
HAL e-proc portal for
‘e-Registration’
Kindly provide all current documents as above, tick mark and
Remarks
send back along with form.
Note - In case of distributors of foreign OEMs located in foreign country, HAL reserves the right to take up
the matter of verifying your credentials (with Indian Embassy abroad or any other agency as deemed suitable.
Page 193
ANNEXURE - 7
Format P-2 (Page 1)
FORMAT FOR MATERIAL PURCHASE REQUEST

MATERIAL PURCHASE REQUEST Priority
Emergency 1
HAL
MPR No. Date Project Program 2
AD-HOC 3
Qty Reqd
Part No./ Stock No./ Nomenclature Delivery Material Unit Estimated Currency
Sl. No (mtr/ Kg/ No. Source Code Amend Code
Specifications Description Date Code Code Value Code
etc)
1 2 3 4 5 6 7 8 9 10 11
Page 194
Total Quantity Total Value
Indenting Deptt Prepared by (Sign & Date) Concurrence by Finance Approved by

FOR PURCHASE DEPARTMENT
Open Tender/ Single Tender/ Spot Tender/ Rate Contract/ Limited Tender
M/s………………………………………………………………………
……………………………………………………………………
HAL MATERIAL PURCHASE REQUEST (Contd) Page 2
Average Qty Suppliers’

Qty in Pending PO/ MPR Previous PO Batch No./
Sl No Store Monthly Per Name & Remarks
Stock Reference Reference Order No
Consumption A/c Address
No. Qty No. Date Rate

1 2 3 4 5 6 7 8 9 10 11 12 13
REFERENCE F.E. REFERENCE SPECIAL NOTES
No. of
Sl No Purchase Order No. Supplier Value Delivery Due Remarks
Items
Page 195
ANNEXURE - 7 A
Division: Service Purchase Request (SPR)

Type of For Example: Applicable/ Security Applicable/ DoP
EMD Priority Normal / Urgent
Service Transport Services Not Applicable Deposit Not Applicable Reference
SPR No.:- Date: User Department:-
Itemized Unit Duration of Service (New/
Sl No. Description of Service Estimated Cost Present Status of Service Last Service Details
Rate Service Renewal)
1 SPR No. Period Value SPR No. Period Value
2

3
Sub Total in INR
Extra Charges @
Total Value in INR
BUDGET PROVISION
Sl. No. Type of Tendering Remark
Sl. No. FINANCIAL YEAR Amount (In Lakhs) Budget Coordinated By:-
1 Sanction Budget (Rs.) 1 Open Tender
2 Committed Budget (Rs.) 2 Limited Tender
3 Available Budget (Rs.) 3 Proprietary Tender
4 Proposed Budget (Rs.) 4 Single Tender / By Nomination
Page 196
5 Balance Budget (Rs.) 5 Spot Tender
PROBABLE SOURCE OF SERVICE PROVIDER
Supplier Category of Supplier
Sl. No. Name Address E-mail Fax No. Phone No. PAN No. S. Tax No. Remark
IFS Code (OEM / Registered)
1
2
3
4
5

Approval Committee Prepared By Checked By Proposed By Concurred by Finance Approved by CFA

Signature

Name

Designation
Note:-
(1) All the fields shall be filled up by user department.
(2) Scope of work should be annexed by user along with SPR.
(3) Estimated Cost shall have proper justification with SPR supported by Budgetary offers or Market justified rates.
ANNEXURE - 8
Form P-3
CAPITAL PURCHASE REQUEST

C.P.R. No………………… Date………….
DESCRIPTION Estimated cost Last Purchases

QTY. in Rs Reference
(Sketch/Blue Print No……..……….attached) CIF Duty Total
Basic Machine/Equipment
Initial spares
Essential Accessories
(Details are to be attached)
2 Total estimate for details attached
3 Estimated life………………..years
4 Date required………………………
5 To be supplied by…………………
6 Chargeable to…………………………………………………………….
Compensation on Request: Programme/ Project/ Express/ Emergent

Give full explanation justifying need for this request.
7 Special maintenance and repairs
8 Additional facilities and extension
9 Alteration and Re-arrangement of facilities
10 Replacement of facilities
11 Identification No…………….cost Rs.
12 Supplement to previously approved
CAR No._______________For________________
DIVISIONAL HEAD / FUNCTIONAL HEAD / GROUP head *
Page 197
13 BUDGET REFERENCE
Year
Account Head/ Category
Planning $
Budget Provision
Already appropriated
Commitment now proposed
Finance $
Balance after this
DIVISIONAL HEAD / FUNCTIONAL HEAD / GROUP head *
14 Budget Control Section
P.O.NO.________________________________________________
* As per DoP
$ One level below the approving Authority
Page 198
FORM P-3 (Contd.)
FOR USE BY PURCHASE DEPARTMENT
1 Proposed procurement action:
a) Bazar Purchase
b) Local Bazar Purchase on best of …………..quotations by hand
c) Proprietary purchase from …………………………..………….
d) Advertised Tender
e) Indent against DGS & D/ISM
f) Indent against Rate/Running Contract
g) Limited Tender-firms to whom limited tenders are to be issued:
(i) …………………………………………………………………....
(ii) ……………………………………………………………………
(iii) ……………………………………………………………………
(iv) ……………………………………………………………………
(v) ……………………………………………………………………
(vi) ……………………………………………………………………
(vii) ……………………………………………………………………
(viii) ……………………………………………………………………
(ix) ……………………………………………………………………
(x) ……………………………………………………………………
(xi) ……………………………………………………………………
(xii) ……………………………………………………………………
h) Issue Foreign Enquiries to firms as indicated as above
i) Place order against existing price/period agreements
2 Move for Import clearance
3 Time allowed
SR. MANAGER (IMM)/PURCHASE MANAGER
Page 199
ANNEXURE - 9
FORM P-5
URGENT PURCHASE REQUEST
HAL U.P.R. No. Date

Code No. Full Description of Material Ref of
Sl. Qty Approximate Reasons for Special
(if required Unit Old
No. Reqd. Cost Request Instructions
Available) (with substitute, if any) Supply

CERTIFIED THAT:
(i) the item is ordered and delivery is
overdue; hence part qty demanded
(ii) could not be projected earlier
(iii) alternate item for trial to meet PHU
Department Requesting
Name of the Officers nominated for spot tendering
Page 200
Prepared By Date
Checked By Date
MATERIAL PURCHASE ACTION
Recommended By Date
Audited By Date
Financial Concurrence Purchase manager/

Head of Finance Head of IMM
ANNEXURE - 10
Form P-6
PETTY PURCHASE REQUEST

Date…………………
Nomenclature………………………………………………………………………….
Quantity………………………………………………………………………………...
Estimated cost……………………………………………………… Nature of request: Stock / Non-Stock Item

(Strike out which is not applicable)
For Stock Item please mention reason for request…………………………………………………………………....

.............................................................................................................................................................................
.............................................................................................................................................................................
.............................................................................................................................................................................
For Non-Stock Item please give reason of not being recommended as a stock Item ……………………………
………………………………………………………………………………………………………………………...........
.............................................................................................................................................................................
.............................................................................................................................................................................
Certified that item being procured is one time requirement and may not be required for another 2 months.
(Head of Department)
Approved by :
(DIVISIONAL HEAD / FUNCTIONAL HEAD / GROUP HEAD *)
* As per DoP
ACTION TAKEN
Note: -
1 For stock item, request is to be routed through Stores Manager who will coordinate for availability
of stock and IMM shall coordinate for dues in if any.
2 Original Copy will be sent to accounts along with Cash Memo/ Bill (to be endorsed by User
Department).
Page 201
ANNEXURE - 11
Conditions of Tender (Indigenous)
PART-I
1 Hindustan Aeronautics Ltd., _______________ (Name of the Division) Division located in __________
(Place) intends to procure the items specified below for __________ (Project).
2 The offer is invited for supply of the items specified as given below :
A Specification
i) Description :
ii) Technical Specification :
(if the evaluation of bid is required to
done based on meeting the essential
Parameters then the following may be
indicated in the tender document
additionally)
iii) Essential para meters (If applicable) :
iv) Desirable parameters (If applicable) :
v) Quality requirement :
(Certificate to accompany the supply,
conformance to any other specific
requirement)
vi) Performance Parameter :
vii) Applicable National / International
Standard :
viii) Drawing reference
(wherever applicable) :
ix) Equivalent make / Catalogue No. :
(Manufacturer wherever applicable)
x) HAL’s Sample reference
B Quantity :
C Delivery Schedule required : ______ (days / weeks / months / date as applicable).
[If applicable staggered delivered requirement to be
indicated]
D Delivery Terms : [FOR (Place name)/Ex-works etc.]
E Packing Conditions if any :
F Mode of Transport :
G Acceptance of Goods : (Conditions of acceptance of goods be clearly speltout
including supply of samples in advance, testing before
acceptance)
H Others : i) Supply of Raw Material / Components by HAL if
applicable to be specified.
ii) Testing facilities if planned to be provided by HAL,
same to be specified.
iii) Other Technical requirements if any.
iv) Acceptance of offer with High Sea Sales provision to
be indicated, if desired.
Page 202
Conditions of Tender (Indigenous)

PART-II
1 Price:
The bidder is required to indicate prices against individual items.
a) In case Bidder has entered into Rate Contract with DGS&D, the Rate Contract Reference to be
sent to HAL along with the quotation. Bidder is required to certify that prices quoted are the same
as applicable to DGS&D and other Government Departments. DGS&D Rate Contract holders
should state whether they are agreeable for supply at DGS&D Rate Contract Rates in the event
of placement of order by us on HAL’s own order form.
b) Price quoted should be on F.O.R. Destination basis, for delivery at HAL Stores inclusive of all
charges including transit insurance.
c) In case of imported item is quoted by bidder, the prices quoted should be in the currency of
the country of supply. HAL reserves the right to avail Custom duty exemption on imported item.
To avail the exemption, HAL will provide Custom duty exemption certificate (if applicable) to
the Bidder. Bidder shall submit the invoice of foreign supplier prior to release of custom duty
exemption certificate by HAL. Bidder is advised to quote both the rates (with custom duty
exemption and without custom duty exemption). HAL reserves the right to select any of the
option for commercial evaluation and ordering.
d) Tenderers should clearly mention whether the prices hold good when the full quantity of enquiry is
not ordered but only a part of it. Unless otherwise mentioned, it would be assumed that the rates
hold good even when lesser quantities than those enquired of are ordered. Any increase in prices
at a later date for ordering lesser quantities will not be agreed to.
2 Taxes:
a) Sales Tax: Rate of Sales Tax or any other Tax chargeable should be clearly indicated in the offer
/ bid as inclusive in the price quoted or extra. If not indicated, HAL will assume that the rates
quoted are inclusive of taxes.
b) Excise Duty: Excise Duty will be paid only on production of sufficient documentary evidence or a
certificate from the Supplier for having paid the Excise Duty at actual. The present rate and tariff
details should be indicated.
3 Quantity:
a) The quotation must be in the unit in which the quantity is indicated in the enquiry. If it is otherwise,
conversion data must be furnished.
b) HAL reserves the right to order quantity less than indicated in the enquiry /quoted for by bidder,
at the prices quoted, without any reference to the bidder.
c) For the Raw materials (in forms of bar, sheet, wires etc) (applicable for RFQs for raw material) Qty.
tolerance ± 10% acceptable.
Page 203
4 Supply of Alternative Item:
In case bidder is quoting for an alternative part number it should be confirmed that the offered part
is fully interchangeable with the required part. Applicable descriptive literature/catalogue if any may
please be enclosed by the bidder with offer (at least two copies).
5 Shelf Life:
Where stores offered have a limited shelf-life, kindly indicate the life involved and confirm that in the
event of an order from us, only newly manufactured stores with the maximum possible shelf-life at
the time of dispatch will be offered for shipment. In respect of rubber items such as seals etc., having
care date, the item should not have been manufactured earlier than 6 months of dispatch.
6 Validity of the Quotation:
Price quoted should be net and unless otherwise specified should remain valid for our acceptance for
a minimum of 120 days from the closing date of enquiry and the materials of offered should be kept
under provisional reservation for this quotation.
7 Tender Due Date:
The due date for submission of quote is _________ (date / time) at _______ (postal address & place to
be informed). Submission of tender can also be done through e-mail ID _______ (to be specified) and
Fax No._______ (to be specified).
8 Submission of Tender:
a) The bidder is required to submit bids directly to HAL either through post/courier/drop in sealed
cover with clear marking of bidder details. The cover should be marked with tender no., due
date and bidders postal address. Response received, without bearing the bidder address will
not be entertained. Bid submitted by bidder’s authorized dealer / distributor/channel partner
should accompany with ink signed authorization letter of the bidder to whom tender has been
originally issued. In the absence of authorization letter, the bids submitted shall be considered an
unsolicited.
b) The signed copy of bid submitted through E-mail / Fax will be accepted subject to the same
being sent to the specified e-mail ID/Fax No. indicated in the tender document. Unsigned copy
of bid received through E-mail/Fax will not be considered. Bid received through e-mail / Fax
received other than that specified in tender documents will not be considered.
c) In case of bid documents are bulky and cannot be dropped in the tender box, the same can be
handed over to _______ (name) ______________ (designation).
d) Response to bid through e-Procurement should be uploaded in the e-portal only.
e) Submission of tender in two bid system:
In response to tender in two bid system, the bidders are required to submit technical bid and
commercial bid separately. Each bid will be put in separate sealed cover marked with tender
No., due date and indicated as technical bid or commercial bid as the case may be. Both sealed
covers will be put in a single cover, which will again be sealed and superscribed with tender no.
and due date.
Page 204
f) The technical bid should also include EMD in original form and Integrity Pact (if applicable).
Technical bid without EMD in original form and Integrity (if applicable) will be rejected. In case
of EMD sent by SWIFT / Wire Transfer, Transaction Code should be indicated along with the
technical bid. The technical bid will be accepted only after confirmation of receipt of EMD in time.
g) Bid received with technical bid and commercial bid in open condition inside one envelope will be
rejected.
h) Submitting only one bid with rates and technical details as a single bid will be rejected.
9 Late Tender:
a) Bid received after the due date and time specified in the tender shall be considered as late tender
and will not be considered.
b) HAL will not be responsible for loss or delay in receipt of tender documents / tender in transit.
c) HAL will not be responsible for inability of vendor to upload the tender documents in e-procurement.
d) HAL reserves the right to reject late or incomplete tender.
10 Opening of Tender:
a) Tender will be opened on ________ (date / time) at___________ (postal address & place to be
indicated). Bidders or their authorized reps. who are desirous to attend the tender opening may
forward written confirmation with name of authorized person and designation prior to tender
opening.
b) During tender opening only the important particulars like price, payment and delivery terms will
be read out.
11 Tender Evaluation:
a) (Conditions to be included if required)
The tender will be evaluated on ______ (package-wise or line item basis to be indicated by HAL).
b) Bid with lowest price conforming to the specification will be considered for placement of order.
c) (Conditions to be included if required)
In addition to price any other criteria if to be adopted the most advantageous bid ascertained on
the basis of criteria specified in the enclosure_____ will be considered. To be indicated by HAL.
d) If the bidder considers that tendered quantity is small, the bidder may quote for Minimum Ordering
Quantity (MoQ). Commercial evaluation in this case will be done on MoQ x unit price, if MOQ offer
beyond 20% of RFQ quantity.
e) If two or more bidders quote the same price, HAL reserves the right to seek revised offer from the
same bidders and placing order on revised L-1 offer. If same situation prevails then HAL reserve
the right to place order on any of them.
f) (Conditions to be included if required)
If the lowest bidder has not offered full quantity, for the balance quantity HAL reserves the right
to source from other bidders on L1 price.
Page 205
g) (Conditions to be included if required)
To have parallel source of supply the order may be spilt to 2 or 3 sources subject to other bidders
agreeing for L-1 price. The distribution of quantity among the bidders will be as per the proportion
(to be decided by the tenderer) given below :
Qty. distribution among L-1 : L-2 in proportion x% : y% or
Qty. distribution among L-1 : L-2 : L-3 in proportion x% : y% : z%
h) Conditional discounts will not be considered in evaluation of tender.
i) Applicability of the Taxes (Sales Tax, Excise duty, Octroi etc) should be explicitly indicated by the
bidder in his response either in percentage or in absolute terms. In the absence of this input the
offer would be considered all inclusive.
j) In respect of two bid system, technical bid will be opened on the tender opening date. After
technical evaluation, the Commercial bids of those bidders who are technically acceptable will
be opened.
12 Supply of Samples
Samples submitted for any reasons shall be supplied without charge and freight paid and without
any obligation on the Purchaser as regards safe custody. All samples submitted must be clearly
labeled with the contractor’s name and address and tender number. If the contractor submits the
samples with his tender the same shall not govern the standard of supply except when it has been
specifically stated in the Purchase Order that it is accepted instead of any sealed pattern. Should
certified samples be lent to a contractor by HAL the contractor is responsible for the return in perfect
order of all certified samples with the labels intact.
13 Others
a) Please indicate approximate net weight of each of the item and gross weight and dimension of
the package to enable HAL to determine the mode of dispatch.
b) Please indicate in your tender, whether stores newly manufactured are offered. Where newly
manufactured stores are offered and on inspection it is found that reconditioned stores or parts
have been used, such stores will be rejected at the contractor’s risk and expense.
c) For the Raw materials (in forms of bar, sheet, wires etc) (applicable for RFQs for raw material)
i) Release note/ OEM certificate of conformity with physical and chemical test report is required
along with the supply.
ii) Requested to include the Box Charges / Packing Charges / Phytosanitary regulation Charges
in the unit quoted price if any. (otherwise indicate separately charges for each item)
d) Manufacturer's name and country of origin of the materials offered must be clearly specified.
Complete details and illustrated literature must accompany all quotations.
e) Vendors should clearly indicate similar equipment supplied on global basis to Aircraft
manufacturing industry, to any Division of HAL and other reputed/Govt customers and anywhere
in India with customer’s full address, telephone/telefax No., P.O. No., value and year of supply.
f) Quotation should be free from correction, over-writing, using correcting fluid etc.
Page 206
g) All drawings (photo/sketches) sent by HAL should be returned with quotations, if bidder is unable
to quote HAL drawings/photos/sketches should also be returned immediately along with regret
letter.
h) HAL is not bound to accept the lowest or any quotation and reserves the right of accepting the
whole or any part of the quotation or part of the quantity offered and bidder must supply the same
at the rate quoted.
i) Vendor shall not be entitled without HAL’s consent to assign or transfer to a third party all or part
of the benefits or obligations under this contract.
14 Integrity Pact: (If applicable, at present estimated order value exceeding Rs 5 Crs.)
a) Bidder shall submit duly signed Integrity Pact in original, strictly as per the format (without any
deviation) enclosed with the RFP. Bidders not complying with this are liable for rejection and their
bids will not be considered for evaluation.
b) In case of two bid system, the bidder is required to submit the signed pre-contract IP as part of
technical bid, failing which offers are liable for rejection.
15 Earnest Money Deposit (If applicable):
a) EMD for a value of Rs. ______ to be submitted in the form of DD/Banker’s Cheque/Pay Order/Bank
Guarantee of Scheduled Bank (to be specified). EMD should be valid for 28 days beyond the validity
of the bid. EMD can be sent through SWIFT / Wire Transfer to HAL Account No.________ (to be
indicated).
b) Offers not accompanied with requisite amount of EMD or EMD not submitted in the specified
form in original shall be summarily rejected.
c) EMD will not carry any interest for the period it is retained with HAL. EMD will be forfeited if a
bidder withdraws, amends, impairs and / or derogates within validity period.
d) Bidders exempted from submission of EMD as per Govt. of India directives must submit certified
copy of Govt. of India authority for such exemption in lieu of EMD.
e) EMD of unsuccessful bidder will be returned within 15 working days of completion of technical
evaluation or within 15 working days of determination of successful bidder (as the case may be)
f) In case of two bid system EMD in original form should be enclosed along with the technical bid.
Technical bid without EMD in original form will be rejected.
16 Security Deposit: (Optional applicability if RFQ calls for)
a) Wherever applicable the successful vendor, shall have to deposit 5% of the value of the order
as Security Deposit within 15 days of receipt of the purchase order, by demand draft or bank
guarantee in a prescribed format of HAL from a schedule bank in India valid up to 60 days after
the completion of contract period/last supply. This Security Deposit will bear no interest and will
be returned only after the contract is completed to the entire satisfaction of HAL
b) In case the contract is not executed to the entire satisfaction of HAL the security deposit shall be
forfeited, besides initiation of risk purchase action.
c) No claim will be entertained against HAL either in respect of interest, if any due on the security
deposit or depreciation in value.
Page 207
d) On due performance and completion of the contract in all respects, the security deposit will be
returned to the vendor, without any interest, on presentation of absolute “No Demand Certificate”
and upon return in good condition of any specifications, drawings, samples or any other property
belonging to the purchaser, which may have been issued to the vendor.
17 Warranty: Warranty shall be 12 months after the goods have been taken over by HAL against any
defective design, workmanship, materials and non-conformance to intended performance. (Optional
Clause : During warranty minimum uptime of 95% shall be ensured failing which warranty period
shall deemed to be proportionately extended). During warranty period equipment shall be replaced/
repaired free of cost including any to & fro freight/insurance involved. Supplier shall attend to warranty
calls within 48 hours notice.
18 PERFORMANCE BANK GUARANTEE (Optional applicability if RFQ calls for) Vendor shall furnish
a Performance Bank Guarantee as per HAL’s format for 10% of order value valid till end of the
guarantee / warranty period from a scheduled bank in India.
19 POST-WARRANTY SERVICE Arrangements for after sales service and maintenance (authorized
service centre) in India on site during warranty & post warranty period should be clearly indicated
providing with name, address, phone, fax, contact person, infrastructure along with spare parts
inventory held by your Authorized Technical
Service Center. The vendor to indicate the validity period of authorization for the technical service
center.
20 Liquidated Damages: In the event of an order, we reserve the right to collect a sum of 0.5% per week
of delay or part thereof, subject to a maximum of 10% as our claim-towards liquidated damages on
the undelivered part of the order.
21 Delivery: Deliveries quoted should be firm (or as per the schedule indicated).
22 Inspection:
23 Terms of Payment: In the event of an order, 100% payment will be made within 30 days after
inspection and acceptance at our Stores, by RTGS or any other latest Electronic Payment remittance
mode.
24 Any order, resulting from the enquiry, shall be governed by the General Terms and Conditions of
Contract of HAL and any party quoting against this enquiry shall be deemed to have read and
understood these terms and conditions and to have quoted subject to these terms and conditions
(Enclosed).
25 When counter terms and conditions have been offered by a tenderer, HAL shall not be deemed to be
governed by such terms and conditions unless specific written acceptance thereof has been given by HAL.
26 Any terms & conditions which has not been the part of the bid or Purchase Order, if put forward in
subsequent correspondence, shall not be considered by HAL.
27 Disregard of any instructions, may result in your offer being ignored.
28 Canvassing by tender form, including unsolicited letter on tender submitted or post tender corrections
shall render their tenderers liable for rejection.
Page 208
29 BRIBES AND GIFTS
Any bribe, commission, gift or advantage given, promised or offered by or on behalf of the contractor
or his parties, agent or servant or any one on his or their behalf to any officer, servant, representative
or agent of HAL or any person on his or their behalf in relation to the obtaining or to the execution of
this or any other contract with HAL shall in addition to any criminal liability which the contractor may
incur, subject the contractor to the cancellation of this and all other contracts with HAL and also to
payment of any loss or damage resulting from any such cancellation under clauses-8 and 10 thereof.
Any question or dispute as to the commission of any offence under the present clause shall be settled
by HAL in such manner and on such evidence or information as they may think fit and sufficient and
their decision shall be final and conclusive.
30 CONFIDENTIALITY
The Supplier shall hold confidential technical data and information supplied by the Purchaser or on
behalf of the Purchaser and shall not reproduce any such technical data or information or divulge
the same to any third party without the prior written consent of the Purchaser. The Purchaser shall
hold confidential technical data and information supplied by the Supplier or on behalf of the Supplier
and shall not reproduce any such technical data or information or divulge the same to any third party
without prior written consent of the Supplier except as far as may be necessary for either party to
carry out its obligations under this Contract.
31 In the development orders, where technical inputs/assistance is provided to the vendors, the
Intellectual Proprietary Rights (IPR) will rest with HAL. Vendor will not directly deal with HAL’s customer
for these items.
Page 209
ANNEXURE - 11 A
RATE CONTRACT - CONDITIONS OF TENDER
1. In case you have entered into Rate Contract with DGS&D, please quote the Rate Contract Reference
and also send us a copy of Rate Contract along with your quotation. Please also certify that prices
quoted are the same as applicable to DGS&D and other Government Departments. DGS&D Rate
Contract holders should state whether they are agreeable for supply at DGS&D Rate Contract Rates
in the event of placement of order by us on HAL’s own order form.
2. Price quoted should be on F.O.R. Destination basis, for delivery at our Stores inclusive of all charges
including transit insurance.
3. Any order, resulting from the enquiry, shall be governed by the General Terms and Conditions of
Contract of HAL and any party quoting against this enquiry shall be deemed to have read and
understood these terms and conditions and to have quoted subject to these terms and conditions.
4. When counter terms and conditions of business have been offered by a tenderer, HAL shall not be
deemed to be governed by such terms and conditions unless specific written acceptance thereof has
been given by HAL.
5. No condition and terms, notice of which has not been given in this enquiry by parties submitting
quotations, will be considered by HAL, if put forward in subsequent correspondence, after acceptance
of orders etc.
6. Manufacturer’s name and country of origin of the materials offered must be clearly specified. Complete
details and illustrated literature must accompany all quotations.
7. Price quoted should be net and unless otherwise specified should remain valid for our acceptance for
8. Quotation should be free from correction, over-writing, etc.
9. All drawings (photo/sketches) sent by us should be returned with your quotations, if you are unable
to quote our drawings/photos/sketches should also be returned immediately along with your regret
letter.
10. Deliveries quoted should be firm and in the event of an order, we reserve the right to collect a sum
of 0.5% per week of delay or part thereof, subject to a maximum of 10% as our claim-towards
liquidated damages on the undelivered part of the order.
11. TERMS OF PAYMENT: In the event of an order, 100% payment will be made within 30 days after
inspection and acceptance at our Stores, by a Crossed Cheque through State Bank of India or any
other Bank.
12. Security Deposit :
a) The successful vendor, shall have to deposit 5% of the value of the order as Security Deposit
within 15 days of receipt of the purchase order, by demand draft or bank guarantee in a prescribed
format of HAL from a schedule bank in India valid up to 60 days after the completion of contract
period/last supply. This Security Deposit will bear no interest and will be returned only after the
contract is completed to the entire satisfaction of HAL.
Page 210
b) In case the contract is not executed to the entire satisfaction of HAL the security deposit shall be
forfeited, besides initiation of risk purchase action.
13. Tenderers should clearly mention whether the prices hold good when the full quantity of enquiry is not
ordered but only a part of it. Unless otherwise mentioned, it would be assumed that the rates hold
good even when lesser quantities than those enquired of are ordered. Any increase in prices at a later
date for ordering lesser quantities will not be agreed to.
14. SALES TAX: Rate of Sales Tax or any other Tax chargeable should be clearly indicated in the offer /
bid as inclusive in the price quoted or extra. If not indicated, HAL will assume that the rates quoted
are inclusive of taxes.
15. EXCISE DUTY: Excise Duty will be paid only on production of sufficient documentary evidence or
a certificate from the Supplier for having paid the Excise Duty at actual. The present rate and tariff
details should be indicated.
16. HAL is not bound to accept the lowest or any quotation and reserves the right of accepting the whole
or any part of the quotation or part of the quantity offered and you must supply the same at the rate
quoted.
17. Disregard of any instructions, may result in your offer being ignored.
18. CONFIDENTIALITY
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ANNEXURE - 12
CONDITIONS OF TENDER (FOREIGN)
PART-I
1 Hindustan Aeronautics Ltd., _______________ (Name of the Division) Division located in __________
(Place) intends to procure the items specified below for __________ (Project).
2 The offer is invited for supply of the items specified as given below :
A. Specification
i) Description :
ii) Technical Specification :
(if the evaluation of bid is
required to done based on
meeting the essential
Parameters then the following
may be indicated in the tender
document additionally)
iii) Essential para meters
(If applicable) :
iv) Desirable parameters
(If applicable) :
v) Quality requirement :
(Certificate to accompany the
supply, conformance to any
other specific requirement)
vi) Performance Parameter :
vii) Applicable National /
International Standard :
viii) Drawing reference
ix) Equivalent make / Catalogue No. /
Manufacturer (wherever applicable)
x) HAL’s Sample reference
B. Quantity :
C. Delivery Schedule required : ________ (days / weeks / months / date as applicable).
[If applicable staggered delivered requirement to be
indicated]
D. Delivery Terms :
[FCA/CIF/FOR (Place name)/
Ex-works etc.]
E. Packing Conditions if any : (If applicable, confirmation from HAL prior to
dispatch of Over Dimension Cargo (ODC) to be
indicated).
F. Mode of Transport :
G Acceptance of Goods : (Conditions of acceptance of goods be clearly spelt
out including supply of samples in advance, testing
before acceptance)
H. Others : i) Supply of Raw Material / Components by HAL if
applicable to be specified.
ii) Other Technical requirements if any.
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CONDITIONS OF TENDER (FOREIGN)

PART-II
1 Price:
a The bidder is required to indicate prices against individual items. Prices quoted should be in the
currency of the country of supply or any other convertible foreign currency (to be specified by
HAL in line with RBI / FEMA rules).
b HAL being manufacturers, bidders to indicate in the quotation manufacturers discount if any.
c Bidders to confirm that : (As applicable)
(i) The prices quoted are the lowest export price and is the same as they would normally quote
to Govt. Department.
(ii) The price is in terms of the appropriate clause of the License Agreement. (Where License
Agreement is in vogue).
d Price quoted should be net FOB / FCA, export packed / FAS Vessel with no extra charge
whatsoever.
e (Optional Clause : Bidder should indicate separately cost of services rendered in India if any.)
f If, for special reasons, bidder prices are Ex-Works or F.O.B. plant, bidder must prepay inland
transportation’s. Port dues and shipment charges up to F.O.B. vessel at port of shipment and
claim this amount of actual along with the price of the goods through bank. Bidder’s quotation
should indicate clearly the extent of such charges.
g Tenderers should clearly mention whether the prices hold good when the full quantity of enquiry is
not ordered but only a part of it. Unless otherwise mentioned, it would be assumed that the rates
hold good even when lesser quantities than those enquired of are ordered. Any increase in prices
at a later date for ordering lesser quantities will not be agreed to.
h Preference will be given to firm prices. But should quoted prices be subject to variation, bidder is
requested to give the following information:
(i) The portion of the contract price which will be subject to such variation
(ii) A breakdown of this variable figure into i) labour ii) materials
(iii) An escalation formula linked to indices with a Cap should be given and escalation in price
established with supporting documents. Price variation may be considered only if it occurs
within the contractual delivery period.
(iv) A further break down of materials giving the main classes of material involved i.e. steel,
nonferrous metal etc.
2 Taxes:
a In respect of Foreign bidders, bidders has to bear all taxes, duties and levies payable in their
country and HAL will bear all statutory levies, other than withholding tax and service tax, payable
in India.
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b Withholding Tax (If applicable appropriate clause needs to be included in the RFQ).
i) HAL would be deducting at source applicable Income Tax as per Government of India Rules
applicable at the time of making payments in respect of services rendered in India. (Generally on
the amounts towards services like training, technical assistance offered by the bidder and license
fees). As per the Rules, Income tax has to be borne by the recipient of the Income and relevant
certificate to this effect will be issued to the bidder on deduction of such amounts, if applicable.
ii) Bidder should bear the applicable withholding income tax in India. Tax would be deducted
at source by HAL as per DTAA where the bidder could claim the benefit of double taxation
in their country as per the bilateral agreement between the two countries. Certificate to this
effect would be issued by HAL to enable the bidder to claim the benefit under DTAA.
iii) Bidder is required to indicate the PAN No. issued by Indian Income Tax Authorities.
3 Quantity:
a The quotation must be in the unit in which the quantity is indicated in the enquiry. If it is otherwise,
conversion data must be furnished.
b HAL reserves the right to order quantity less than indicated in the enquiry /quoted for by bidder,
at the prices quoted, without any reference to the bidder.
c For the Raw materials (in forms of bar, sheet, wires etc) (applicable for RFQs for raw material) Qty.
tolerance ± 10% acceptable.
4 Supply of Alternative Item:
Applicable descriptive literature/catalogue if any may please be enclosed by the bidder with offer (at
least two copies). In case bidder is quoting for an alternative part number it should be confirmed that
the offered part is fully interchangeable with the required part.
5 Shelf Life:
Where stores offered have a limited shelf-life, kindly indicate the life involved and confirm that in the
event of an order from us, only newly manufactured stores with the maximum possible shelf-life at
the time of dispatch will be offered for shipment. In respect of rubber items such as seals etc., having
cure date, the item should not have been manufactured earlier than 6 months of dispatch.
6 Validity of the Quotation:
Price quoted should be net and unless otherwise specified should remain valid for our acceptance for
7 Tender Due Date:
The due date for submission of quote is _________ (date / time) at _______ (postal address & place to
be informed). Submission of tender can also be done through e-mail ID _______ (to be specified) and
Fax No._______ (to be specified).
8 Submission of Tender:
a The bidder is required to submit bids directly to HAL either through post/courier in sealed
cover with clear marking of bidder details. The cover should be marked with tender no., due
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date and bidders postal address. Response received, without bearing the bidder address will
not be entertained. Bid submitted by bidder’s authorized dealer / distributor/channel partner
should accompany with ink signed authorization letter of the bidder to whom tender has been
originally issued. In the absence of authorization letter, the bids submitted shall be considered an
unsolicited.
The signed copy of bid submitted through E-mail / Fax will be accepted subject to the same
being sent to the specified e-mail ID/Fax No. indicated in the tender document. Unsigned copy
of bid received through E-mail/Fax will not be considered. Bid received through e-mail / Fax
received other than that specified in tender documents will not be considered.
c The bid to be addressed to _______ (name) ______________ (designation).
d Response to bid through e-Procurement should be uploaded in the e-portal only.
e Submission of tender in two bid system:
f In response to tender in two bid system, the bidders are required to submit technical bid and
commercial bid separately. Each bid will be put in separate sealed cover marked with tender
No., due date and indicated as technical bid or commercial bid as the case may be. Both sealed
covers will be put in a single cover, which will again be sealed and superscribed with tender no.
and due date.
g The technical bid should also include EMD in original form and Integrity Pact (if applicable).
Technical bid without EMD in original form and Integrity (if applicable) will be rejected. In case
of EMD sent by SWIFT / Wire Transfer, Transaction Code should be indicated along with the
technical bid. The technical bid will be accepted only after confirmation of receipt of EMD in time.
h Bid received with technical bid and commercial bid in open condition inside one envelope will be
rejected.
i Submitting only one bid with rates and technical details as a single bid will be rejected.
9 Late Tender:
a Bid received after the due date and time specified in the tender shall be considered as late tender
and will not be considered.
b HAL will not be responsible for loss or delay in receipt of tender documents / tender in transit.
c HAL will not be responsible for inability of vendor to upload the tender documents in e-procurement.
d HAL reserves the right to reject late or incomplete tender.
10 Opening of Tender:
a Tender will be opened on ________ (date / time) at___________ (postal address & placed to
indicated). Bidders or their authorized reps. are desirous to attend the tender opening may
forward written confirmation with name of authorized person and designation prior to tender
opening.
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b During tender opening only the important particulars like price, delivery terms will be read out.
11 Tender Evaluation:
a Bid received in different currency will be converted to Indian Rupees. The TT selling rate for
foreign currency exchange rate for conversion will be adopted as per the _______ Bank______
Branch in India as on date of tender opening.
b (Conditions to be included if required)
I) The tender will be evaluated on ______ (package-wise or line item basis to be indicated by
HAL).
c Bid with lowest price conforming to the specification will be considered for placement of order.
d (Conditions to be included if required)
I) In addition to price any other criteria if to be adopted the most advantageous bid ascertained
on the basis of criteria specified in the enclosure_____ will be considered. To be indicated by
HAL.
e If the bidder considers that tendered quantity is small, the bidder may quote for Minimum Ordering
Quantity (MoQ). Commercial evaluation in this case will be done on MoQ x unit price, if MOQ offer
beyond 20% of RFQ quantity.
f If two or more bidders quote the same price, HAL reserves the right to seek revised offer from the
same bidders and placing order on revised L-1 offer. If same situation prevails then HAL reserve
the right to place order on any of them.
g (Conditions to be included if required)
i) If the lowest bidder has not offered full quantity, for the balance quantity HAL reserves the right
to source from other bidders at L-1 price.
h (Conditions to be included if required)
I) To have parallel source of supply the order may be spilt to 2 or 3 sources subject to other
bidders agreeing for L-1 price. The distribution of quantity among the bidders will be as per
the proportion (to be decided by the tenderer) given below :
Qty. distribution among L-1 : L-2 in proportion x% : y%
or
Qty. distribution among L-1 : L-2 : L-3 in proportion x% : y% : z%
i Conditional discounts will not be considered in evaluation of tender.
j In respect of two bid system, technical bid will be opened on the tender opening date. After
technical evaluation, the Commercial bids of those bidders who are technically acceptable will
be opened.
12 Supply of Samples
Samples submitted for any reasons shall be supplied without charge and freight paid and without any
obligation on the Purchaser as regards safe custody. All samples submitted must be clearly labeled
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with the bidder’s name and address and tender number. If the bidder submits the samples with his
tender the same shall not govern the standard of supply except when it has been specifically stated
in the Purchase Order that it is accepted instead of any sealed pattern. Should certified samples be
lent to a bidder by HAL the bidder is responsible for the return in perfect order of all certified samples
with the labels intact.
13 Others
a In the case of airborne material, the same should be covered by a Release Note or Airworthiness
Certificate countersigned by person/s authorized by Government Airworthiness Certifying
Authority.
b Please indicate approximate net weight of each of the item and gross weight and dimension of
the package to enable HAL to determine the mode of dispatch.
c Please indicate in your tender, whether stores newly manufactured are offered. Where newly
manufactured stores are offered and on inspection it is found that reconditioned stores or parts
have been used, such stores will be rejected at the contractor’s risk and expense.
d Please furnish list of similar equipments supplied in ________ or anywhere in India with customer’s
full address, value and telephone/telex etc. (if applicable)
e Please indicate if any training arrangements for item/system in India and factory acceptance test
if required. (if applicable)
f Please also indicate necessary onsite technical support during installation of the system at no
extra cost.
g Vendors should ensure the availability of spares of the offered products for a period of 10 years.
h Two sets of operation manuals/maintenance manual should accompany the system at no extra
cost. (if applicable)
i Please also indicate status of export permit based on the present rules/regulations of your country
and normal time frame for obtaining such export permission if an order is placed on you in near
future and the same should be covered within the delivery schedule indicated.
j Vendors while submitting the proposal should categorically declare that items quoted by them are
their own manufactured products and are not resold (2nd sale). Offers without such declaration
are likely to be ignored.
k Quotation should accompany the detailed catalogues and literature.
l Vendor should confirm that they are the original manufacturer of the stores referred to in this
contract and has not engaged any individual or firm whether Indian or foreign whatsoever,
to intercede, facilitate or in any way to recommend to the Government of India or any of its
functionaries, whether officially or unofficially, the award of the contract to the seller nor has any
amount been paid or intended to be paid to any such individual or intended to be paid to any
firm in respect of any such intercession, facilitation or recommendation, vendor accepts that
if it is established that the present declaration is in any way incorrect and if at any later stage
it amount/commission to such individual/firm, vendor will be liable to pay the similar amount
to HAL for engaging such individual/firm and making the payment as commission. In addition,
vendor will also be debarred from entering into any supply contract with the Ministry of Defence,
Government of India for a minimum period of 5 years. Vendors shall also consider cancellation
of the contract without any entitlement or compensation to vendors who shall also be liable to
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refund all payments made by HAL in terms of the contract along with the interest at the London
inter bank offer rate(LIBOR)
m The Harmonized System of tariff nomenclature against the items for which quotation is rendered
should be indicated.
n For the Raw materials (in forms of bar, sheet, wires etc) (applicable for RFQs for raw material)
I) Release note/ OEM certificate of conformity with physical and chemical test report is required
along with the supply.
II) Requested to include the Box Charges / Packing Charges / Phytosanitary regulation Charges
in the unit quoted price if any. (otherwise indicate separately charges for each item)
o Manufacturer's name and country of origin of the materials offered must be clearly specified.
Complete details and illustrated literature must accompany all quotations.
p Vendors should clearly indicate similar equipment supplied on global basis to Aircraft
manufacturing industry, to any Division of HAL and other reputed/Govt customers and anywhere
in India with customer’s full address, telephone/telefax No., P.O. No., value and year of supply.
q Quotation should be free from correction, over-writing, using correcting fluid etc.
r All drawings (photo/sketches) sent by HAL should be returned with quotations, if bidder is unable
to quote HAL drawings/photos/sketches should also be returned immediately along with regret
letter.
s HAL is not bound to accept the lowest or any quotation and reserves the right of accepting the
whole or any part of the quotation or part of the quantity offered and bidder must supply the same
at the rate quoted.
t Vendor shall not be entitled without HAL’s consent to assign or transfer to a third party all or part
of the benefits or obligations under this contract.
14 Integrity Pact: (If applicable, at present estimated order value exceeding Rs 5 Crs.)
a Bidder shall submit duly signed Integrity Pact in original, strictly as per the format (without any
deviation) enclosed with the RFP. Bidders not complying with this are liable for rejection and their
bids will not be considered for evaluation.
b In case of two bid system, the bidder is required to submit the signed pre-contract IP as part of
technical bid, failing which offers are liable for rejection.
15 Earnest Money Deposit (If applicable):
a EMD for a value of Rs. ______ to be submitted in the form of DD/Banker’s Cheque/Pay Order/
Bank Guarantee of Scheduled Bank (to be specified). EMD should be valid for 28 days beyond the
validity of the bid. EMD can be sent through SWIFT / Wire Transfer to HAL Account No.________
(to be indicated).
b Offers not accompanied with requisite amount of EMD or EMD not submitted in the specified
form in original shall be summarily rejected.
c EMD will not carry any interest for the period it is retained with HAL. EMD will be forfeited if a
bidder withdraws, amends, impairs and / or derogates within validity period.
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d Bidders exempted from submission of EMD as per Govt. of India directives must submit certified
copy of Govt. of India authority for such exemption in lieu of EMD.
e EMD of unsuccessful bidder will be returned within 15 working days of completion of technical
evaluation or within 15 working days of determination of successful bidder (as the case may be)
f In case of two bid system EMD in original form should be enclosed along with the technical bid.
Technical bid without EMD in original form will be rejected.
g EMD remittance document, either in Indian currency or any other convertible currency of the
specified amount, can be arranged by the Indian subsidiary/branch office in India of a foreign
bidder which shall be submitted along with a certificate confirming the relationship of subsidiary/
branch office in the bidder’s offer.
16 Security Deposit: (Optional applicability if RFQ calls for)
a) Wherever applicable the successful vendor, shall have to deposit 5% of the value of the order
as Security Deposit within 15 days of receipt of the purchase order, by demand draft or bank
guarantee in a prescribed format of H.A.L from a bank of international repute, valid up to 60 days
after the completion of contract period/last supply. This Security Deposit will bear no interest and
will be returned only after the contract is completed to the entire satisfaction of H.A.L.
b) In case the contract is not executed to the entire satisfaction of H.A.L, the security deposit shall
be forfeited, besides initiation of risk purchase action.
17 Warranty: Warranty shall be 12 months from the date of acceptance of items at HAL or more as
per bidders policy. Warranty is after the goods have been taken over by HAL against any defective
design, workmanship, materials and non-conformance to intended performance. (Optional Clause :
During warranty minimum uptime of 95% shall be ensured failing which warranty period shall deem
to be proportionately extended). During warranty period equipment shall be replaced/ repaired free
of cost including any to & fro freight/insurance involved. Supplier shall attend to warranty calls within
48 hours notice.
18 PERFORMANCE BANK GUARANTEE (Optional applicability if RFQ calls for) Vendor shall furnish
a Performance Bank Guarantee as per HAL’s format for 10% of order value valid till end of the
guarantee / warranty period from a bank of international repute.
19 POST-WARRANTY SERVICE: Arrangements for after sales service and maintenance (authorized
service centre) in India on site during warranty & post warranty period should be clearly indicated
providing with name, address, phone, fax, contact person, infrastructure along with spare parts
inventory held by your Authorized Technical Service Center. The vendor to indicate the validity period
of authorization for the technical service center.
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20 Liquidated Damages:
In the event of an order, we reserve the right to collect a sum of 0.5% per week of delay or part
thereof, subject to a maximum of 10% as our claim-towards liquidated damages on the undelivered
part of the order.
21 Delivery:
a Deliveries quoted should be firm (or as per the schedule indicated).
b Please confirm whether the item/equipment quoted/ offered is of-the-shelf or to be manufactured

specific-to-type. If the items/equipment is manufactured specific-to-type, bidder to quote
firm delivery schedule taking into consideration of the period actually required based on the
complexity of the equipment. In the event of an order, HAL reserve the right to claim towards
liquidated damages on the undelivered part of the order. This clause will be strictly followed by
HAL. Therefore your delivery schedule should be firm and definite.
c If installation and commissioning of the equipment is required to be done by bidder at HAL site,
bidder to indicate the period required for the above job from the date of intimation of readiness
of site at our premises.
d Bidder to note that the delivery schedule should be for:
(i) Period required for the delivery/dispatch of equipment and
(ii) Period required for installation and commissioning of the subject equipment after intimation
from HAL about readiness of the site.
22 Inspection:
23 Terms of Payment:
a In accordance with our standard practice, payment against any order materializing out of your
offer, will be against presentation of documents through the State Bank of India………..(mention
HAL’s Banker), India.
b As a matter of policy HAL arrange payments to the extent of 80%, through SIGHT DRAFTS
presented through our Bankers. 20% after delivery and acceptance and fulfillment of all contract
obligations and on the submission of Performance Bank Guarantee for 10% of the order value to
cover the warranty period.
c If under unavoidable situations payment has to be made through Letter of Credit, the same can
be established for 80% of the order value before three months from the date of dispatch. All
bank charges are to be borne by the vendor. Balance 20% will be paid directly through bank
after delivery and acceptance and fulfillment of all contract obligations and on the submission of
Performance Bank Guarantee for 10% of the order value to cover the warranty period.
24 Export License:
Vendors should categorically confirm the availability of export license from their government for
exporting the system. Vendor shall be required to obtain and maintain all Export/Import licences
and permits etc., as the case may be, required for performing supplies against this tender. Obtaining
export licence shall be entire responsibility of the vendor.
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25 Settlement of Disputes and Arbitration:
All disputes arising out of the contract shall be settled as per Laws of India/ Rules of Arbitration of
ICA/ICADR.
26 Immunity to Government of India:
a It is understood and agreed that the Government of India is not a party to this agreement and
has no liabilities, obligations or rights hereunder. It is expressly understood and agreed that HAL
is an independent legal entity with power and authority to enter into contracts solely in its own
behalf under the applicable Laws of India and General Principles Contract Law. The vendor shall
agree, acknowledge and understand that HAL is not an agent, representative or delegate of the
Government of India. It is further understood and agreed that the Government of India is not and
shall not be liable for any acts, omissions, commissions, breaches or other wrongs arising out of
the contract. Accordingly, vendor expressly waives releases and foregoes any and all actions or
claims against the Government of India arising out of this contract, not to sue the Government of
India as to any manner, claim, and cause of action or thing whatsoever arising out of or under this
agreement.
27 Fall Clause:
a The price charged for the stores supplied under the contract shall be in no event exceed the
lowest price at which the contractor sells the stores or offers to sell stores of identical description
to any persons/organizations including the purchaser of any department of the Central Govt.
or any Dept. of the State Govt. or any statutory undertaking of the Central or State Govt., as
the case may be during the period till the performance of the supply order placed and during
currency of the contract is completed.
b If at any time during the said period, the contractor reduces the sales price, sells or offers to sell
such stores to any person/organization including the purchaser or any department of Central
Govt. or any Dept. of State Govt., or any statutory undertaking of the Central or State Govt., as
the case may be at a price lower than the price chargeable under the contract, he shall forthwith
notify such reduction/sale or offer to sale to the Hindustan Aeronautics Limited and the price
payable under the contract for the stores supplied after the date of coming into force of such
reduction or sale or offer to sale shall stand correspondingly reduced.
28 Agents/Agency Commission
The seller confirms and declares to the buyer that the seller is the original manufacturer or authorized
(applicable in case of countries where domestic laws do not permit direct export by OEMS) of the stores
referred to in this offer / contract / Purchase order and has not engaged any individual or firm, whether
Indian or Foreign whatsoever, to intercede, facilitate or in any way to recommend to Buyer or any of its
functionaries, whether officially or unofficially, to the award of the contract / purchase order to the Seller;
nor has any amount been paid, promised or intended to be paid to any such individual or firm in respect
of any such intercession, facilitation or recommendation. The Seller agrees that if it is established at
any time to the satisfaction of the Buyer that the present declaration is in any way incorrect or if at a
later stage it is discovered by the Buyer that the Seller has engaged any such individual / firm, and paid
or intended to pay any amount, gift, reward, fees, commission or consideration to such person, party,
firm or institution, whether before or after the signing of this contract / purchase order, the Seller will be
liable to refund that amount to the Buyer. The Seller will also be debarred from participating in any RFQ
/ Tender for new projects / program with Buyer for a minimum period of five years. The Buyer will also
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have a right to consider cancellation of the Contract / Purchase order either wholly or in part, without
any entitlement or compensation to the Seller who shall in such event be liable to refund all payments
made by the Buyer in terms of the Contract / Purchase order along with interest at the rate of 2% per
annum above LIBOR (London Inter Bank Offer Rate) (for foreign vendors) and Base Rate of SBI (State
Bank of India) plus 2% (for Indian vendors). The Buyer will also have the right to recover any such
amount from any contracts / Purchase order concluded earlier with Buyer.
HAL has not appointed / authorized any person / agent to deal with the vendors in respect of the said
contract. In case, if someone claims and interacts with the vendors it shall be duty of the vendors to
bring such instances to the notice of HAL Management
29 HAL conditions of contract will govern any resultant order arising out of the enquiry (copy on
application) and bidders quotation will be subject to the said conditions.
30 Bidder is required to send REGRET REPLY, in case the subject item is not covered in bidders range
of products.
31 CONFIDENTIALITY
32 In the development orders, where technical inputs/assistance is provided to the vendors, the
Intellectual Proprietary Rights (IPR) will rest with HAL. Vendor will not directly deal with HAL’s customer
for these items.
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ANNEXURE - 13
GUIDELINES FOR HIGH SEA SALES
1 High Sea Sales (HSS) is a sale carried out by the carrier document consignee to another buyer while
the goods are yet on high seas or after their dispatch from the port / airport of origin and before their
arrival at the port / airport of destination.
2 HSS contract /agreement should be signed after dispatch of goods from origin & prior to their arrival
at destination. The agreement should be on stamp paper.
3 On concluding the HSS agreement, the B/L should be endorsed in favour of the new buyer, in respect
of air shipment, HSS seller should write to the consol agent informing that a HSS agreement has been
established with the HSS buyer and that the carrier document should therefore be considered and
endorsed in favour of the HSS buyer and further the IGM should be filed by the carrier in the name of
the HSS buyer.
4 In HSS contracts the HSS seller may not like to disclose the import value to the HSS buyer. However,
HAL should insist to get the import value. In case the same is not agreed to HSS seller should take on
the responsibility of custom clearance and site delivery and the price quoted should be the CIF value.
5 HSS is considered as a sale carried out outside the territorial jurisdiction of India. Accordingly, no
sales tax is levied in respect of HSS. The customs documents (B/E) is either filed in the name of HSS
buyer or such B/E has an endorsement indicating HSS buyer’s name.
6 The title of goods transfers to HSS buyer prior to entry of goods in territorial Jurisdiction of India. The
delivery from customs is therefore on account of HSS buyer.
7 HSS goods are entitled to classification, rates of duty and all notification benefits as would be
applicable to similar import goods on normal sale.
8 HSS is also applicable to goods imported by air. As long as the sale is formalized after dispatch from
airport / port or origin and before arrival at the first port of discharge / airport at destination, such sale
is considered as HSS.
9 Sometime HSS buyers buy goods after their arrival, such sale are not HSS. The stamp paper on
which the HSS agreement is executed must not bear the stamp paper purchase date as being post
cargo arrival date.
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HIGH SEA SALE AGREEMENT FORMAT
Purchase Order reference :
Name of the foreign supplier / country :
Sales Tax : No sales tax will be charged as the goods are being delivered to the buyer on High Sea Sales
basis. But if at a later date the local sales tax authority assesses sales tax and other levies, such as interest if
any on this sale, the same shall be borne by the buyer.
Payment : As per purchase order.
Sales /Delivery : The goods are sold on the “High Seas Sale” basis and the above price is (incoterms) The
freight and freight clearing charges -------------------------- The buyer is responsible for payment of customs
duties and / licensing matter / provide exemption certificate for customs duties for the import, if any, by the
Government. (Optional)
The seller shall retain one copy each of the signed High Sea sales agreement, the exchange control copy of
the Bill of Entry / Bill of Lading / Airway bill and a copy of the clearing agent’s bill after customs clearance.
This is to enable the seller to complete RBI formalities for making foreign exchange / currency payment to
M/s......... (Name of the OEM/Source supplier) which is the supply source abroad.
IN WITNESS THEREOF Seller and Buyer hereto have set their respective hands on the mentioned above.
Dated:
Buyer: For Hindustan Aeronautics Limited
Seller: For (M/s...................................... .)
Witness:
1. 2.
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ANNEXURE - 13 A
TERMS AND CONDITIONS OF CONTRACT
(CANTEEN AND GROCERIES)
1 Duration of the agreement:
This agreement is valid for a period of ………..years with effect from ………to………………
2 Prices:
The rates quoted by the Supplier are for delivery at HAL premises and shall be valid for a period of
….. year/s and shall be maintained throughout the contract period. Under no circumstances request
for price increase will be entertained except in case of change in Govt. /Statutory levies against proof
of payment.
3 Taxes:
The prices are to be quoted at nett payable by HAL exclusive of all duties and taxes. Taxes/duties as
applicable should be indicated in the quote, and separately in the bill, which are payable extra.
4 Quantity:
Individual Divisions will place Purchase Orders directly on Monthly/Quarterly/Half Yearly/Annual basis
depending on their requirement. Items are to be delivered to various Divisions at places mentioned in
their order as per their Monthly requirement.
HAL does not assure any particular quantity for procurement against this agreement.
If required, the SUPPLIER shall agree to supply additional quantity at the same rate and terms &
conditions during the contract period.
5 Quality of supply:
The supplies shall be of Agmark quality wherever applicable, free from all impurities or of specified
quality wherever Agmark is not applicable. H.A.L. reserves the right to check the quality in any
approved laboratory at any time.
If the quality so supplied is found to be defective, the same should be replaced immediately at
Supplier’s cost including to and fro transportation and other charges. In case of repeated rejections
for the same reasons, HAL shall have the right to terminate the Contract and impound the EARNEST
MONEY DEPOSIT.
6 Delivery:
The supplies are to be effected to the respective Division against their orders at no extra cost.
No transportation charges or incidental charges are payable by HAL against this agreement. The
Divisions while placing the order will indicate the time for delivery and the Supplier has to ensure
timely supplies.
7 Inspection:
The supply made against respective orders will be subject to HAL inspection at Division’s stores.
The supplier shall remain owner of the supplies and responsible for items supplied till the same have
been inspected and accepted by HAL. HAL reserves the right to get the supplies examined by a Govt.
approved laboratory. The Supplier agrees to supply free of cost replacement of items not supplied
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in conformity with the Purchase Order, even if partially utilized and agrees to bear the cost of testing
such supplies.
8 Terms of payment:
The Division concerned who places order is responsible for arranging payment within 30 days from
the date of supply and acceptance. The Supplier will submit Invoices to the respective Divisions
against their orders and obtain payment directly from the concerned.
In case of items not supplied in conformity with the Purchase Order and detected so later, the Division
will have the right to deduct an amount equal to the cost of ordered items and will consider making
this payment after the supplier replaces the same.
9 Security Deposit:
The Supplier shall deposit 5% of the estimated value of this agreement as a Security Deposit which
amounts to Rs……………. by way of crossed Demand Draft in favour of HAL, …………… Division.
This amount will be returned without any interest only after the successful completion of the contract.
This amount is likely to be forfeited in the event of failure to execute the contract as per the terms and
conditions laid down in the agreement.
10 Risk purchases:
The Supplier will supply quality items as per approved sample and also the quantity intended by the
concerned Division in full as per terms and conditions of respective orders. In case the Supplier fails
to execute the order either in terms of quality or in quantity, HAL reserves the right to procure from
elsewhere at the risk and cost of the Supplier and any extra expenditure incurred due to this purchase
is payable by the Supplier.
11 Termination of contract:
HAL reserves the right to cancel the order with 15 days notice without any financial liability in the
event of any of the following –
a Repeated rejection for the same reasons/ grounds.
b Repeated delays in delivery of items as specified in the Purchase Order.
c Adulterated supplies as determined according to Prevention of Food Adulteration Act, 1954 and
Rules, 1955 as amended from time to time.
d Supplies inferior to the specified quality e.g. steamed rice or boiled rice in place of raw rice etc.
e Unbranded/ deceptively branded / spurious supplies against branded items in the Purchase
order.
f Time expired supplies
12 Parallel contract:
HAL shall reserve the right for entering into parallel contracts with the other firms/vendors for the
same item if it is found necessary
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13 Settlement of disputes:
In case of any dispute arising from this agreement, the final authority to decide the matter will be
Head of concerned Division or their authorized Officers.
In the event of disagreement with the decision of Head of respective Division, the courts in the City of
the Division alone shall have the jurisdiction to deal with and decide any matter or dispute whatsoever
arising out of this Contract including those arising under Arbitration Act.
14 Force Majeure: (For reference only, to be included only if insisted by Supplier)
Neither party will be liable to the other for any act done or prevented from so doing by virtue of the
occurrence of force majeure conditions such as war, general mobilization of troops, strikes, lockouts
in factories, fire, earthquakes and floods, embargoes or stoppage of deliveries by Government.
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ANNEXURE - 14
PROPRIETARY CERTIFICATE
1. Item Nomenclature
2. Part No./ Description/ Qty
3. To be Procured From
4. Previous ordering
Information (if available)
5. Project
6. Nature
7. Budget Reference
8. Sub-Clause under which the procurement is proposed
(Tick the applicable one and score out ones not applicable)
………………………………………………………………………………………………………………………………
a) OEM / Licensor Collaborator or sources listed by them
b) Product specifically developed by HAL from Vendors through limited / open tender.
c) Item standardized by HAL
d) Manufacturers retail outlet / authorised distributor for an item proprietary nature.
e) Procurement of spares compatible with the existing equipment from OEM.
f) Sources as per Design / Licensor documents.
9. Reasons for resorting to proprietary procurement
………………………………………………………………………………………………………………………………
(User Deptt) (Originating Deptt)

Signature Signature
Name Name
Designation Designation
Date Date
Approving Authority: Through:
Competent Provisioning Authority
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ANNEXURE - 15
RATE CONTRACT - DRAFT AGREEMENT
THIS AGREEMENT executed on the_____day of ______ 20__ BETWEEN M/S. HINDUSTAN AERONAUTICS
LIMITED, having its Registered Office at #15/1, Cubbon Road, Bangalore - 560 001, represented by Shri
______, ______ at Corporate Office, and hereinafter referred to as ‘HAL’ which term shall cover its successors
and assigns:
AND
M/S. _________________________________________________, a Company incorporated under the Companies

Act having its Registered Office at ____________________________________________________
represented for the present by Shri __________________ of _________
hereinafter referred to as ‘_______’ which terms shall cover its successors and assigns :
1. WHEREAS __________ have desired to enter into a Contract with HAL for supply of _______________
_____________________ manufactured at their works in _______________under the name of and HAL
are desirous of purchasing said items required by them for their various Divisions and the terms and
conditions of sale as herein contained have been agreed upon between the parties.
NOW THIS AGREEMENT WITNESSETH AS FOLLOWS :
1. The Agreement shall be designated by the Number HAL/CD/_____/20__ dated __________ 20__,
which will be referred to in all correspondence.
2. The duration of this Agreement shall be initially for a period of _______ years commencing from
_________ 20___ with an option to extend further periods on mutual consent. This Contract may be
terminated at any time by either of the parties by giving ____ months notice to the other in writing.
3 OBLIGATION TO SUPPLY:
3.1 During the continuance of this Agreement, ______ will sell to HAL, Standard and Special/Non-
Standard items of _______________________ in accordance with the indents placed by HAL from time
to time. No liability will arise on HAL in respect of indents placed by any one other than the authority
named herein OR any person duly authorised in writing by such authority. The indenting Authorities
are as follows:
i) Director (E and R&D), HAL, Design Complex, Bangalore
ii) CEO, HAL, Bangalore Complex, Bangalore
iii) CEO, HAL, MiG Complex, Nasik
iv) CEO, HAL, Accessories Complex.
v) CEO, HAL, Helicopter Complex
vi) Head of the Division, HAL, Aircraft Division, Bangalore
vii) Head of the Division, Engine Division, Bangalore
viii) Head of the Division, Helicopter Division, Bangalore
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ix) Head of the Division, MRO Helicopter, Bangalore
x) Head of the Division, CMD, Bangalore
xi) Head of the Division, HAL, Overhaul Division, Bangalore
xii) Head of the Division, HAL, Foundry & Forge Division, Bangalore
xiii) Head of the Division, HAL, Aerospace Division, Bangalore
xiv) Head of the Division, HAL, ARDC, Bangalore
xv) Head of the Division, HAL, AERDC Division, Bangalore
xvi) Head of the Division, HAL, RWR&DC, Bangalore
xvii) Head of the Division, HAL IMGT, Bangalore
xviii) Head of the Division, HAL, LCA Division, Bangalore
xix) Head of the Division, HAL, IJT Division, Bangalore
xx) Head of the Division, HAL, MMRCA Division, Bangalore
xxi) Head of the Division, HAL, MCSRDC Division, Bangalore
xxii) Head of the Division, HAL, Hyderabad Division, Hyderabad
xxiii) Head of the Division, HAL, SLRDC, Hyderabad
xxiv) Head of the Division, HAL, Lucknow Division, Lucknow
xxv) Head of the Division, HAL, Korwa Division, Korwa
xxvi) Head of the Division, HAL, TAD-Kanpur Division, Kanpur
xxvii) Head of the Division, HAL, AMD-Nasik Division, Nasik
xxviii) Head of the Division, HAL, AOD-Nasik Division, Nasik
xxix) Head of the Division, HAL, AURDC, Nasik
xxx) Head of the Division, HAL, ED-Koraput Division, Koraput
xxxi) Head of the Division, HAL, SED-Koraput Division, Koraput
xxxii) Head of the Division, HAL, Barrackpore Factory, Barrackpore
xxxiii) Head of the Division, (IMM), HAL, Corp. Office, Bangalore
xxxiv) Head of the Division, HAL, FMD, Bangalore
xxxv) Chief of Medical Services, HAL, Bangalore
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3.2 ‘_________’ shall make every endeavor to quote for Special/Non-Standard items required by HAL,
subject to feasibility for manufacture and availability of capacity.
3.3 For the purpose of this Agreement, the expression ‘Standard Items’ means various types of
_______________________________as detailed in the Price List attached as Annexure-I to this
Agreement.
3.4 All Standard Items supplied by ______ shall be as per specification in force at their ________ works at
the time of indenting.
3.5 The term ‘Special/Non-Standard’ items means ___________special products as per HAL drawings.
4 PRICES:
4.1 STANDARD ITEMS
4.1.1 The prices payable to _____ by HAL for Standard Items supplied to HAL shall be as per the Standard
Price List No. _______ dt. _______ 20__ attached at Annexure-I to this Agreement. The prices applicable
on the Price List for certain Special ________________are given at Annexure-II. The prices are FOR
Destination basis and are inclusive of Excise Duty at ______ %. The base price shall remain firm
and fixed for a period of _____ years from ___________ 20__. Thereafter, the price shall be mutually
discussed and agreed to. If no agreement is reached on prices, HAL reserves the right to terminate
the Contract.
4.1.2 The Standard/Special Items covered in the Price List kept at Annexure-I shall be subject to Discounts
as provided in Clause-12.
4.1.3 During the currency of this Agreement, if ______ enters into a Rate Contract with DGS&D for items
covered under this Agreement, the DGS&D prices for such items shall be made applicable to HAL
wherever they are lower. Copies of the Rate Contract with DGS&D shall be made available by ________
to all the indenting authorities of HAL mentioned in Clause-3.
4.2 The prices for the Special/Non-Standard _________shall be quoted by ____________ against specific
enquiry from HAL. The prices shall be on FOR Destination basis and are subject to Discounts as
provided in Clause-12.
5. TAXES:
The prices in Clause-4.1 & 4.2 are exclusive of Govt. (Central, State or Local) Taxes and Levies. Such
Taxes/Levies as applicable at the time of delivery shall be to HAL’s account. However, the prices in
Clause- 4.1 & 4.2 are inclusive of Excise Duty at ___%. Revision if any, in the rate of Excise Duty shall
be to HAL’s account.
6. CHARGES FOR PACKING, FREIGHT, INSURANCE & DELIVERY:
The charges for Packing, Freight & Delivery to the concerned HAL Division for which the items are
indented shall be borne and paid by _____. ________ shall insure the goods-in-transit at their own
cost.
7. DELIVERY:
7.1 Generally, for the Standard Items, the delivery shall be 12 to 18 weeks from the date of receipt of
indents from HAL. However, _______ will make every effort to supply as many stocked Standard Items
as possible from stock. For Special/Non-standard Items, the deliveries will be as per ________specific
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quotations submitted from time to time against HAL enquiries. The despatch shall be effected to the
Railhead/Road Transport Contractor’s Warehouse nearest destination, packed, insured and freight
prepaid to HAL Divisions a provided in each indent.
7.2 MINIMUM ORDERING VALUE:
7.2.1 For __________________, the minimum ordering should be for each size, whichever is higher.
7.3 QUANTITY TOLERANCE:
For Special Items as well as Non-Stocked Items, the quantity ordered shall be deemed to have been
completed, if supplied quantity is within minus 10% of the ordered quantity. ________ also reserves
the right to deliver and charge for up to a maximum of 10% over the ordered quantity.
8. INSPECTION:
Inspection of all goods shall be done by the Inspectors of HAL at HAL’s works and their decision as
to the acceptability shall be final. The Inspection Standard shall be based on IS/BS/DIN/American
Specification or any other specification as applicable.
9. PAYMENT:
9.1 As and when the goods are despatched, _______ shall draw on HAL, a Bill for 100% value of the
goods at the applicable prices and the same will be presented to HAL through State Bank of India, or
any other Bank specified by the indenting authority. Such Bills shall be accompanied by the Invoices
and Railway/ Lorry Receipt/Air Consignment Note/Postal Receipt/Other Documents for title to the
goods. ________ shall allow 2% Cash Discount to _______ on the nett Invoice value. If payment is
made by HAL within 15 days from the date of receipt of Bank intimation. The Bank charges shall be
borne by _____.
9.2 As and by way of security for the due performance of obligations towards HAL under this Contract
and as an insurance against the value of rejections or short receipts, _________ shall furnish a Bank
Guarantee for Rs.20,000/- in the form prescribed by HAL from a scheduled Bank which shall be valid
for the duration of this Contract.
10. WARRANTY:
10.1 ______ warrants that Design, Workmanship and quality of material of the Standard Items shall conform
to the IS/BS/DIN/American Standards or any other Specifications and be such as to ensure that they
are free from defects of manufactured and quality and are suitable for the purpose intended. Further,
for Special/Non-Standard items, _______ warrants that the workmanship and material shall conform
to HAL drawings and specifications and are suitable for the purpose intended. Any claim under
Warranty should be preferred within Twelve months from the date of despatch of stores from _____
factory. ______ shall replace, repair or recondition free of charge, the rejected or defective stores and
shall also bear the cost of transportation involved in the rejection/replacement.
10.2 This warranty shall not apply in case of improper handling or improper storage and in case of repairs
or alterations carried out without written instructions. This warranty shall not extend to normal wear
and tear.
11. REPLACEMENT TRANSIT DAMAGES:
Any claim on the ground of alleged shortage or damage or breakage of the stores in transit and
dimensional errors shall be made in writing not later than Thirty days from the date of arrival of stores
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at HAL’s end. _______ shall replace such damaged items on priority within the standard delivery
period from the date of receipt of written complaint thereof.
12. DISCOUNTS:
For Standard items, HAL shall be entitled to the following Trade Discounts in the prices chargeable by
______ as given in their Price List mentioned in Clause-4 and as amended from time to time:
Sl.No. Description of items Discount

1
2
3
13. FORCE MAJEURE: (For reference only, to be included only if insisted by supplier)
Neither party will be liable to the other for any act done or prevented from so doing by virtue of the
occurrence of Force Majeure Conditions such as but not restricted to any event or chain of events
which prevents either party from carrying out its engagements such as War, General Mobilisation
of Troops, Strikes, Lockouts in Factories, Fire, Earthquakes and Floods, Embargoes or stoppage of
deliveries by Government, refusal or non-receipt of Import Licence for Raw materials from suppliers.
14. DAMAGES FOR FAILURE TO SUPPLY:
14.1 In the event of ______ failing or neglecting to supply the items within the stipulated delivery period
(which expression does not include the grace period allowed by HAL) for any reason whatsoever as
mentioned in Clause-7 above, or any extension thereof granted by HAL, HAL at its discretion, shall
be entitled to impose Liquidated Damages and not by way of penalty a sum of ….% of the price of
any stores which has failed to deliver as aforesaid, for each week or part of a week during which
the delivery of such stores may be in arrears subject to a maximum of …….% of value of goods
undelivered against the supply order.
14.2 Notwithstanding anything contained in this Agreement, HAL is under no obligation to purchase
any ________________ Standard or Special/Non-Standard Items from _________. This is only a
Rate Contract and accordingly its terms apply only in respect of indents which HAL may place on
__________during the continuance of this Agreement.
15. PARALLEL AGREEMENTS:
Nothing in this Agreement shall debar HAL from entering into any agreement for supply of any kind of
______________________________ now or hereafter parallel with any other suppliers or manufacturers.
16. JURISDICTION:
The Courts in the city of _______ alone shall have Jurisdiction to deal with and decide any matter or
dispute whatsoever arising out of this agreement including those arising under the Arbitration Act.
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17. ARBITRATION:
All disputes or differences whatsoever arising between the parties out of or relating to the construction,
meaning and operation or effect of this Contract or the breach thereof shall be settled by Arbitration in
accordance with the Rules of Arbitration of the ICA/ICADR and the award made in pursuance thereof
shall be binding on the parties. The provisions of the Arbitration and conciliation Act 1996 or any
statutory modifications thereof shall apply to such conciliation.
IN WITNESS WHEREOF the parties hereto have executed these presents in the presence of the
Witnesses attesting hereunder:
For and on behalf of For and on behalf of

HINDUSTAN AERONAUTICS LTD.,
(-----------------) (-------------------)
------------------- --------------------
WITNESS: WITNESS:
1) 1)
2) 2)
Page 234
ANNEXURE-16
RECEIVING CUM DISCREPANCY REPORT
IMPREST PURCHASES
FORM P-7
FOR PURCHASES UPTO RS.5,000 ONLY Date: ...................................

No: ......................................
Indent Number Offer from M/s. Batch No: ...........................
Posted:
........................................... ............................................. Store

Posted:
Accounts
Rate: ....................................
Date: ..................................
Taxes: ..................................
NOMENCLATURE
SPECIFICATION OF ITEM Certified that the rates have been taken and recorded by the undersigned in person only, from the suppliers who have the stock on date.
It is decided to procure the item from M/s………………………......……………….against cash payment/30 days credit.
Page 235
Signature of the Officer.
Unit Qty.Accepted in Total Allocated
Qty Qty Qty Rate Purchase
QUANTITY REQUIRED Description Short Over Supplier Stock Value Value
Supplier Stock Advised Received Rejected Rs. Rate
Unit Unit Rs. Rs.
Estimated Cost
Past Purchase Price
Indenting Dept.
The purchase was made on the manufacturer’s Purchase approved

Price list/most economical terms available
User/Indenting Officer (Imprest Holder)

ANNEXURE - 17
Ministry of Micro, Small and Medium Enterprises
1 S.O.581(E).- Whereas, the Central Government Ministries, Departments and Public Sector
Undertakings shall procure minimum of 20 per cent of their annual value of goods or services from
Micro and Small Enterprises:
And whereas, the Public Procurement Policy shall apply to Micro and Small Enterprises registered
with District Industries Centers or Khadi and Village Industries Commission or Khadi and Village
Industries Board or Coir Board or National Small Industries Corporation or Directorate of Handicraft
and Handloom or any other body specified by Ministry or Micro, Small and Medium Enterprises:
And whereas, the Public Procurement Policy rests upon core principles of competitiveness, adhering
to sound procurement practices and execution of orders for supply of goods or services in accordance
with a system which is fair, equitable, transparent, competitive and cost effective; and
And whereas, for facilitating promotion and development of micro and small enterprises, the Central
Government or the state Government, as the case may be, by order notify from time to time, preference
policies in respect of procurement of goods and services, produced and provided by micro and small
enterprises, by its Ministries or Departments, as the case may be, or its aided institutions and public
sector enterprises.
Now, therefore, in exercise of the powers conferred in section 11 of the Micro, Small and Medium
Enterprises Development (MSMED) Act 2006, the Central Government, by Order, notifies the Public
Procurement Policy (hereinafter referred to as the Policy) in respect of procurement of goods and
services, produced and provided by micro and small enterprises, by its Ministries, Department and
Public Sector Undertakings.
2. Short title and commencement:-
(i) This Order is titled as ‘Public procurement Policy for Micro and Small Enterprises (MSEs) Order,
2012’.
(ii) It shall come into force with effect from 1st April 2012.
3. Mandatory procurement from Micro Small and Enterprises.-
(i) Every Central Ministry or Department or Public Sector Undertaking shall set an annual goal of
procurement from Micro and Small Enterprises from the financial year 2012-13 and onwards,
with the objective of achieving an overall procurement of minimum of 20 per cent, of total annual
purchases of products produced and services rendered by Micro and Small Enterprises in a
period of three years.
(ii) Annual goal of procurement also include sub-contracts to Micro and Small Enterprises by large
enterprises and consortia of Micro and Small Enterprises formed by National Small Industries
Corporation.
(iii) After a period of three years i.e. from 1st April 2015, overall procurement goal of minimum of 20
per cent shall be made mandatory.
(iv) The Central Ministries, Department and Public Sector Undertakings which fail to meet the annual
goal shall substantiate with reasons to the Review Committee headed by Secretary (Micro, Small and
Medium Enterprises), constituted in Ministry of Micro, Small and Medium Enterprises, under this Policy.
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4. Special provisions for Micro and Small Enterprises owned by Scheduled Castes or Schedules Tribes.
% Out of 20 per cent target of annual procurement from Micro and Small Enterprises, a sub-target
of 20 per cent (i.e. 4 per cent out of 20 per cent) shall be earmarked for procurement from Micro and
Small Enterprises owned by the Scheduled Caste or the Scheduled Tribe entrepreneurs. Provided
that, in event of failure of such Micro and Small Enterprises to participate in tender process or meet
tender requirements and L1 price, 4 per cent sub-target for procurement earmarked for Micro and
Small Enterprises owned by Scheduled Caste or Scheduled Tribe entrepreneurs shall be met from
other Micro and Small Enterprises.
5. Reporting of targets in Annual Report. %
(i) The data on Government procurements from Micro and Small Enterprises, is vital for strengthening
the Policy and for this purpose, every Central Ministry or Department or Public sector Undertaking
shall report goals set with respect to procurement to be met from Micro and Small Enterprises
and achievement made thereto in their respective Annual Reports.
(ii) The annual reporting shall facilitate in better understanding of support being provided by different
Ministries or Departments or Public Sector Undertakings to Micro and Small Enterprises.
6. Price quotation in tenders. %
(i) tender participating Micro and Small Enterprises quoting price within price band of L1+15 per
cent shall also be allowed to supply a portion of requirement by bringing down their price to L1
price in a situation where L1 price is from someone other than a Micro and Small Enterprises and
such Micro and Small Enterprises shall be allowed to supply up to 20 percent of total tendered
value.
(ii) In case of more than one such Micro and Small Enterprises, the supply shall be shared
proportionately (to tendered quantity).
7. Developing Micro and Small Enterprises vendors -The Central Ministries or Departments or Public
Sector Undertakings shall take necessary steps to develop appropriate vendors by organizing Vendor
Development Programmes or Buyer-seller Meets and entering into Rate Contract with Micro and
Small Enterprises for a specified period in respect of periodic requirements.
8. Annual Plan for Procurement from Micro and Small Enterprises on websites. – The Ministries or
Departments or Public Sector Undertakings shall also prepare Annual Procurement Plan for purchases
and upload the same on their official website so that Micro and Small Enterprises may get advance
information about requirement of procurement agencies.
9. Enhancing participations of Micro and Small Enterprises, including those owned by Scheduled Castes
or Scheduled Tribes in Government procurements. % For enhancing participation of Schedule Castes
or Scheduled Tribes in Government procurement, the Central Government Ministries. Department of
Public Sector Undertakings shall take following steps, namely:-
(a) Special Vendor Development Programmes or Buyer-Seller Meets shall be conducted by

Departments/Public Sector Undertakings for Scheduled Castes or Scheduled Tribes;
(b) Outreach programmes shall be conducted by National Small Industries Corporation to cover
more and more Micro and Small Enterprises from Scheduled Castes or Scheduled Tribes under
its schemes of consortia formation; and
(c) National Small Industries Corporation shall open a special window for Scheduled Castes or
Scheduled Tribes under its Single Point Registration Scheme (SPRS).
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10 Reduction in transaction cost. % To reduce transaction cost of doing business, Micro and Small
Enterprises shall be facilitated by providing them tender sets free of cost, exempting Micro and
Small Enterprises from payment of earnest money, adopting e-procurement to bring in transparency
in tendering process and setting up a Grievance Cell in the Ministry of Micro, Small and Medium
Enterprises.
11. Reservation of specific items for procurement. % To enable wider dispersal of enterprises in the
country, particularly in rural areas, the Central Government Ministries or Departments or Public Sector
Undertakings shall continue to procure 358 items (Appendix) from Micro and Small Enterprises, which
have been reserved for exclusive purchase from them. This will help in promotion and growth of Micro
and Small Enterprises, including Khadi and village industries, which play a critical role in fostering
inclusive growth in the country.
12. Review Committee:-
(i) A Review Committee has been constituted under the Chairmanship of Secretary, Ministry of
Micro, Small and Medium Enterprises for monitoring and review of Public Procurement Policy for
Micro and Small Enterprises vide order No.21(1)/2007-MA dated the 21st June 2010 (Annexure).
(ii) This Committee shall, inter alia, review list of 358 items reserved for exclusive purchase from
Micro and Small Enterprises on a continuous basis, consider requests of Central Ministries or
Departments or Public sector Undertakings for exemption from 20 per cent target on a case to
case basis and monitor achievements under the Policy.
13. Setting up of Grievance Cell. % In addition, a ‘Grievance Cell’ will be set up in Ministry of Micro, Small
and Medium Enterprises for redressing grievances of Micro and Small Enterprises in Government
procurement. This cell shall take up issues related to Government procurement raised by Micro and
Small Enterprises with Departments or agencies concerned, including imposition of unreasonable
conditions in tenders floated by Government Departments or agencies that put Micro and Small
Enterprises at a disadvantage.
14. Special Provisions for Defence Procurements. % Given their unique nature, defence armament
imports shall not be included in computing 20 per cent goal for Ministry of Defence. In addition,
defence equipments like weapon systems, missiles, etc. shall remain out of purview of such Policy of
reservation.
15. Monitoring of Goals. % The monitoring of goals set under the Policy shall be done, in so far as they
relate to the Defence sector, by Ministry of Defence itself in accordance with suitable procedure to be
established by them.
16. Removal of difficulty. % Any difficulties experienced during the course of implementation of the above
Policy shall be clarified by Ministry of Micro, Small and Medium Enterprises through suitable Press
releases which would be kept on the public domain.
(S.O.581(E) dtd. 23rd March 2012)
(List of 358 items is at Reference-7)
Page 238
ANNEXURE - 18
TIME FRAME FOR PROCUREMENT
[UNDER SINGLE AND TWO-BID SYSTEMS]
RECEIPT OF INDENT:
Sl. Under
Activity
No. Single Bid Two Bid
1 Vetting and Registration of Indent 1 week 1 week
2 Vendor Selection and preparation of RFP 1 week 1 week
3 Issuance of RFP 2 weeks 2 weeks
PROCUREMENT ACTION
4 Time allowed for submission of offers 3 weeks for 3 weeks for
indigenous / 4 indigenous / 4
weeks foreign weeks foreign
suppliers suppliers
5 Opening of technical bid and technical evaluation by TEC and NA 3 weeks
recommendation
5A Opening of commercial bids, preparation of CST and vetting 2 weeks 2 weeks
etc.
5B Technical recommendation if required 1 week -
6 Approval for holding negotiation if required 2 weeks 2 weeks
6A Preparation of brief for the PNC, issuing notice for the PNC 4 weeks 4 weeks
and actual conduct of PNC meeting
6B Preparation of the minutes of the PNC meeting and obtaining 1 week 1 week
of signatures of the members / chairman of the PNC
7 Approval of the purchase proposal –
For Division CFA 2 weeks + 2 weeks +
For Complex CFA 4 weeks + 4 weeks +
For Corp. Office CFA 6 weeks 6 weeks
8 Preparation and dispatch of the Purchase Order / signing of 1 week 1 week

the contract.
Total :
For Division CFA 13 to 20 weeks 15 to 23 weeks
For Complex CFA 17 to 24 weeks 19 to 26 weeks
For Corp. Office CFA 23 to 30 weeks 25 to 32 weeks
In case the proposal calls for PSC / Board approval at Corp. Office then additional 4 weeks are required.
This time frame indicated is only a guideline and could vary from case to case depending on the type of
procurement as well as the concerned CFA (i.e. PSC and Board).
Page 239
ANNEXURE - 19
PROJECT MATERIALS, PURCHASE PROPOSAL FORMAT
Purchase Format – A
PROPOSAL FOR APPROVAL

DIVISION/
FOR PROCUREMENT OF PROJECT:
COMPLEX
PROJECT MATERIALS
REF. NO: DATE:
1 Proposal - Proposal for Placement of Order on………………….for supply of ………………
for a total value (Foreign Currency – on FOB/Ex-works etc.)…………… (i.e.
Rs……….. on CIF basis @ exchange rate of……………, Freight & Insurance
@………., at EC ……. Level)
OR
- Proposal is for holding negotiation for ………….
OR
- Proposal is for issue of Order amendment for ………
2 Back ground Explain how the need for procurement has arisen in case of requirements for
other than approved projects / programmes.
3 Provisioning - Confirm that the quantities proposed are based on norms of consumption/
provisioning relating to the approved programme / task and that quantity in
stock / WIP / pipeline have been taken into account.
- Indicate year-wise Programme /Task considered :
Year Task
- Indicate feasibility of indigenisation
- Confirm if Long Term Agreement (LTA) has been considered
- If TOT/Co-Production is considered for the items, please provide details
- If items proposed to be ordered are within the production range of the
Division, reasons for procurement rather than production need to be justified.
4 Tendering Specify:
- Procedure followed for Sourcing / Vendor selection
- Mode of Tendering: Open /limited/single/proprietary - in case of proprietary
items, enclose Proprietary Certificate. Certificate to be signed by Head of
Division for proposals sent to Complex/Corp. Office.
- Authority approving Mode of Tendering
- Analysis of responses: No. of firms contacted/offers received, time given for
receiving offers etc.
- Whether two bid system followed (wherever required)
- Confirm that Commercial Bids of only technically acceptable offers have
been opened after completion of technical evaluation in case of 2 bid
system.
- Confirm that laid down tendering procedures have been followed and
compliance of CVC guidelines ensured.
Page 240
5 Technical Evaluation - Indicate summary of Technical Evaluation Committee Recommendation.

- Provide Technical Evaluation Statement of offers w.r.t. specifications as
per RFQ and recommendations / comments, duly vetted by technical
committee, wherever applicable in support of the recommendation as per
details at Encl-1.
6 Commercial - Indicate summary of Commercial Evaluation of Bids.
Evaluation - Provide Comparative Statement of Prices duly checked and verified by
Division, as per the format at Encl-2.
- Provide Commercial Evaluation of complete Terms and Conditions of the
Bids vis-a vis the RFQ, duly checked and verified by Division, as per the
format at Encl-3.
- Level prices correctly & confirm.
- Indicate whether the prices are firm & fixed or subject to escalation. If so
indicate details.
- Consider life cycle cost / operating cost also wherever necessary
7 Price Reasonability Price Justification Recommendation
In case of single / proprietary tender, Indicate acceptability of leveled prices
comparison of prices to be made with or negotiation
past procurement prices or on the ba-
sis of technical estimates. Details to be
placed at Encl-4
8 Negotiation - Provide points / agenda for negotiation w.r.t. comments in the technical/
If required commercial evaluation statements at Encl-5.
- Provide justification if negotiations are proposed with other than Technically
acceptable lowest Bid.
- Constitution of PNC as per DOP
9 PNC - Provide summary of recommendations of PNC
Recommendation - Enclose the Report of the PNC duly signed by all members and approved
by the chairman of PNC, clearly bringing out the improvements due to
negotiations and recommendations as per the format at Encl-6
10 Delivery / Lead Time - Indicate the delivery lead-time and confirm whether it meets programme
requirements.
- Confirm staggered delivery in case of procurement exceeding 12 months
requirement.
- If LD Clause is not provided, indicate reasons for same.
11 Payment Terms - Indicate payment terms.
- In case of advance payments, confirm that Bank Guarantee covering the
payment will be obtained.
12 Price Recoverability - Confirm that the proposed price is within the price projected in the quote to
the customer and is recoverable from the customer
- In case of new projects / D&D / Indigenisation programmes confirm that the
proposal is covered within the approval of the Govt. / Board / MC / DPC /
CMD/Divisional Head (as the case may be) in respect of material estimates
included in the approved Project Report/ sanction (as applicable) for the
relevant phase of production.
Page 241
13 Performance Budget Year To be Indicated

Reference Head/category To be Indicated
Budget Amt. Approved To be Indicated
Committed so far To be Indicated
Commitment now proposed To be Indicated
Balance after this To be Indicated
14 Validity of Offer - Indicate validity of offer.
- Send proposal to reach Corp. Office at least 3 weeks before expiry of the
validity of offer.
15 Reference to DOP - Indicate DOP reference correctly.
16 Recommendation - Indicate clear recommendations for which approval of CFA is requested.
- In case of LTA / TOT / Co-Production, enclose copy of Draft Purchase Order
/ Agreement at Encl-7
- If approval is sought for other than technically acceptable L1 offer, indicate
reasons for same.
Routing Dealing Officer Head of IMM Head of Finance Head of Division
DIVISION
Signature
Name/Designation
Date:
Routing Head of Complex Finance CEO
COMPLEX
Signature
Name/Designation
Date:
Routing Head of IMM Head of Planning Head of Finance
Signature
CORPORATE OFFICE
Name/Designation
Date:
Recommended Concurred Sanctioned
D (OPS) DF CMD
Date
Note : For addl information/comments, if any, please attach separate sheets
Page 242
ANNEXURE - 20
NON-PROJECT MATERIALS, PURCHASE PROPOSAL FORMAT
Purchase Format – B
PROPOSAL FOR APPROVAL CATEGORY:

DIVISION/
FOR PROCUREMENT OF Indicate material category viz. Maintenance items,
COMPLEX
NON-PROJECT MATERIALS Welfare items, Consumables, Tools etc.
REF. NO: DATE:
1 Proposal – Proposal for Placement of Order on…………………. for supply of ……..
……………… for a total value of(Foreign Currency – on FOB/Ex-Works
etc.)…………… (Rs…………… on CIF basis @ exchange rate of………., Freight &
Insurance @ …….., at EC .… level)
OR
– Proposal is for holding negotiation for ………….
– Proposal is for issue of Order amendment for ………
2 Back ground (if required).
3 Provisioning – Confirm that the quantities proposed are based on norms of consumption/
provisioning relating to the approved programme / task and quantities in stock/
WIP & pipeline have been considered.
– Indicate feasibility of indigenisation / import substitution
– Confirm if Long Term Agreement (LTA) has been considered
4 Tendering Specify
– Procedure followed for Sourcing / Vendor selection
– Mode of Tendering: Open /limited/single/proprietary - in case of proprietary items,
enclose Proprietary Certificate. Certificate to be signed by CPA
– Authority approving Mode of Tendering
– Analysis of responses: No. of firms contacted/offers received, time given for
receiving offers etc.
– Whether two bid system followed (wherever required)
– Confirm that Commercial bids of only technically acceptable offers have been
opened after completion of technical evaluation in case of 2 bid system.
– Confirm that laid down tendering procedures
5 Technical – Indicate summary of Technical Evaluation Committee Recommendation.
Evaluation – Provide Technical Evaluation Statement of offers w.r.t specifications as per RFQ
and recommendations / comments, duly vetted by Technical Committee, wherever
applicable, in support of the recommendation as per details at Encl-1.
6 Commercial – Indicate summary of Commercial Evaluation of Bids.
Evaluation – Provide Comparative statement of Prices duly checked and verified by Division,
as per the format at Encl-2.
– Provide Commercial Evaluation of complete Terms and Conditions of the Bids vis-
à-vis the RFQ, duly checked and verified by Division, as per the format at Encl-3.
– Level prices correctly and confirm.
– Indicate whether the prices are firm & fixed or subject to escalation. If so indicate
details.
Page 243
7 Price Price Justification Recommendation

Reasonability - In case of single / proprietary tender, comparison - Indicate acceptability of
of prices to be made with past procurement levelled prices or negotiation
prices or on the basis of technical estimates.
Details to be placed at Encl-4.
8 Negotiation (If - Provide points / agenda for negotiation w.r.t. comments in the technical./
required) commercial evaluation statements at Encl-5.
- Provide justification if negotiations are proposed with other than Technically
acceptable lowest Bid.
- Constitution of PNC as per DOP.
9 PNC - Provide summary of recommendations of PNC
Recommendation - Enclose the Report of the PNC duly signed by all members and approved by the
Chairman of PNC, clearly bringing out the improvements due to negotiations
and recommendations as per the format at Encl- 6.
10 Delivery / Lead - Indicate the delivery lead-time and confirm whether it meets programme
Time requirements.
- Confirm staggered delivery in case of procurement exceeding 12 months
requirement.
– If LD Clause is not provided, indicate reasons for same.
11 Payment Terms – Indicate payment terms.
– In case of advance payments, confirm that Bank Guarantee covering the –
12 Performance Year To be Indicated
Budget Reference Head/category To be Indicated
Budget Amt. Approved To be Indicated
Committed so far To be Indicated
Commitment now proposed To be Indicated
Balance after this To be Indicated
13 Validity of Offer - Indicate validity of offer.
– Send proposal to reach Corp.Office atleast 3 weeks before expiry of the validity of offer.
14 Reference to DOP Indicate DOP reference correctly.
Page 244
15 Recommendation - Indicate clear recommendations for which approval of CFA is requested.

– In case of LTA / TOT / Co-Production, enclose copy of Draft
Purchase Order / Agreement at ENCL-7
– If approval is sought for other than technically acceptable L1 offer, indicate
reasons for same.
Head of
Routing Dealing Officer Head of IMM Head of Finance
Division
DIVISION
Signature
Name/
Designation
Date :
Routing HEAD OF COMPLEX FINANCE CEO
COMPLEX
Signature
Name/Designation
Date :
Routing HEAD OF IMM HEAD OF PLANNING HEAD OF FINANCE
Signature
Name/
CORPORATE OFFICE
Designation
Date
D (OPS) DF CMD
Date
Page 245
ANNEXURE - 21
Purchase Format – C
CAPITAL ITEMS, PURCHASE PROPOSAL FORMAT

PROJECT
PROPOSAL FOR APPROVAL
DIVISION/ Indicate the Project for items other than those under,
FOR PROCUREMENT OF
COMPLEX Improvements/ replacements, welfare, Computers and
CAPITAL ITEMS
indigenisation as per approved Capital Budget
REF. NO: DATE:
1 Proposal – Proposal for Placement of Order on ..……. for supply of / Re- Conditioning
of……… for a total value of (Foreign Currency – on FOB/Ex-Works etc)… ….
(Rs……on CIF basis @ exchange rate of…….., Freight & Insurance @……, at EC
.……… level)
OR
– Proposal is for holding negotiation for ………….
OR
– Proposal is for issue of Order amendment for ……… – Indicate the price break-
up viz. cost of basic eqpt., Accessories, Maintenance Spares, Installation &
Commissioning charges, Duties & Taxes, Training/Technical Assistance etc. in the
Draft Purchase Order.
2 Back ground/ – Furnish how the need for procurement has arisen and also confirm that the
necessity for procurement of the item is re-assessed with reference to its expected utilization
requirement vis-à-vis programme/task on hand.
– For items under Replacement, confirm PRC’s recommendation and also disposal
off old equipment after commissioning of new equipment.
– Confirm that location, civil/mechanical/electrical facilities would be made ready
before the receipt of the equipment.
3 Finalisation of – Confirm that the Technical Committee has approved the specifications of the
Specifications for equipment for procurement.
the item
4 Tendering Specify :
– Procedure followed for Sourcing / Vendor selection – Mode of Tendering: Open
/limited/single/proprietary – in case of proprietary items, enclose proprietary
certificate. Certificate to be signed by CPA.
– Authority approving Mode of Tendering
– Analysis of responses: No. of firms contacted/offers received, time given for
receiving offers etc
– Whether two bid system followed– That Commercial bids of only technically
acceptable offers have been opened after completion of technical evaluation in
case of 2 bid system.
– Confirm that laid down tendering procedures have been followed and
compliance of CVC guidelines ensured.
5 Technical – Indicate summary of Technical Evaluation Committee’s Recommendation.
Evaluation – ProvideTechnical evaluation statement of offers w.r.t specifications as per
RFQ and recommendations / comments, duly vetted by Technical Evaluation
Committee wherever applicable, as per format at Encl-1.
Page 246
6 Commercial – Indicate summary of Commercial Evaluation of Bids

Evaluation – Provide Comparative statement of Prices duly checked and verified by Division,
as per the format at Encl-2.
– Provide Commercial Evaluation of complete terms and conditions of the Bids vis-
à-vis the RFQ, duly checked and verified by Division, as per the format at Encl-3.
– Level the Prices correctly and confirm.
– Consider Life cycle cost/operating cost wherever necessary.
7 Price Price Justification Recommendation
Reasonability – In case of single tender, indicate justification – Indicate acceptability of
for the prices. Details to be placed at Encl- levelled prices or negotiation
4.
8 Negotiation (If – Provide points / agenda for negotiation w.r.t. comments in the technical /
required) commercial evaluation statements at Encl-5.
– Propose constitution of PNC as per DOP
9 PNC – Indicate summary of recommendations of PNC
Recommendation – Report of the PNC duly signed by all members and approved by the chairman
of PNC, clearly bringing out the improvements due to negotiations and
recommendations to be placed as per the format at Encl-6
10 Delivery / Lead – Indicate the delivery lead-time and confirm whether it meets programme
Time requirements.
– Whether LD Clause is provided, if not reasons thereof.
11 Payment Terms – Indicate payment terms.
– In case of advance payments, confirm that Bank Guarantee covering the
– Confirm that Performance Bank Guarantee will be obtained before final payment
12 Recoverability for – Confirm that receipt of funds from Customers will be as per the expected cash
Customer Funded flow indicated at Sl.No:13 below
items
13 Capital Budget Year RE___________ BE____________FC____________
Reference Indicate the following w.r.t approved Capital Budget :
Budget Head/ Category New/Existing Projects/ Improvements/ Replacement/
Welfare/ Computers/ D & D/ Indegenisation/ Customer
Financed items
Item Sl.No:
Commitment Approved
Commitment proposed
Expenditure Approved
Expenditure proposed
14 Re-appropriations – Indicate re-appropriation if any.
of Capital Budget
sanctions, if any
15 Validity of Offer – Indicate validity.
– Send Proposal to reach Corp.Office at least 3 weeks before expiry of the validity
of offer.
16 Reference to DOP – Indicate DOP reference correctly
Page 247
17 Recommendation – Indicate clear recommendations for which approval of CFA is requested

– Enclose copy of Draft Purchase Order with complete terms & conditions Encl-7.
– If approval is sought for other than technically acceptable L1 offer, indicate
reasons for same.
Routing Dealing Officer Head of IMM Head of Finance Head of Divn.
DIVISION
Signature
Name/Designation
Date :
Routing HEAD OF COMPLEX FINANCE CEO
COMPLEX
Signature
Name/Designation
Date :
Routing HEAD OF IMM HEAD OF PLANNING HEAD OF FINANCE
Signature
CORPORATE OFFICE
Name/Designation
Date :
D (OPS) DF CMD
Date
Page 248
(Annexure 21A to 21F are Common to Annexure 19, 20 and 21)
ANNEXURE - 21 A
TECHNICAL EVALUATION STATEMENT & RECOMMENDATION
Enclosure-1
SL. AS PER RFQ VENDOR-1 VENDOR-2 VENDOR-3 VENDOR-4 REMARKS
A SPECIFICATION
-
B) TECHNICAL
RECOMMENDATION:
I) REJECTED OFFERS :
Page 249
VENDOR
REASONS
II) ACCEPTED OFFERS:
VENDOR
Confirmation whether
the Vendor meets
all RFQ specs ?
(Highlight exceptions)
Signatures of Members Signature
of Technical Evaluation Designation
Committee Date
ANNEXURE – 21 B
COMPARATIVE STATEMENT OF PRICES
(price comparison of Technically acceptable offers)
Enclosure- 2
SL. DETAILS QUANTITY VENDOR-1 VENDOR-2 VENDOR-3 VENDOR-4 REMARKS
1 PRICING :
Quoted Price :
(in Foreign Currency)

Less discount if any.
Exchange Rate:
Rs.
Loadings for Price Levelling :
- For price variation (Escalation)
- Packing
- Forwarding
- Freight & Insurance
- Financing charge for payment
Page 250
terms -
Others - specify
Evaluated Price :
Vendor’s relative price position
L1, L2, L3 etc.
2 TERMS & CONDITIONS :
- Pricing Terms (FOB/Ex-Works
etc)
- Firm / variable
- Escalation formula
- Payment Terms
(Bank Guarantee if required)
- Delivery
- Liquidated Damages
- Warranty
Signature
Designation
Date
IMM Finance
ANNEXURE - 21 C
Enclosure-3
COMMERCIAL EVALUATION STATEMENT

(RFQ Clauses)
CLAUSES AS PER
SL. No VENDOR-1 VENDOR-2 VENDOR-3 VENDOR-4 REMARKS
RFQ
CLAUSES
-
-
-
-
-
-
-
Page 251
Signature :
Designation :
Date :
Prepared by : Checked by:
ANNEXURE - 21 D
Enclosure -4
PRICE JUSTIFICATION
LAST PURCHASE CURRENT PURCHASE NO. OF YEARS
DESCRIP-
BETWEEN
TION
SL. PRICE PRICE LAST % INCREASE
OF ITEMS QTY LAST YEAR OF YEAR OF % INCREASE
NO. P.O. & DATE BEFORE AFTER PURCHASE PER YEAR
WITH PART PRICE* DELIVERY DELIVERY
NEGOTIATION* NEGOTIATION* & CURRENT

NO.
PURCHASE
TOTAL
Signature
Name/Designation
Page 252
Date : IMM Finance
NOTE:
1. (*) INDICATE THE TOTAL VALUE FOR THE PRESENT QUANTITY.
2. INCASE PREVIOUS ORDER IS NOT AVAILABLE & ITEM IS BEING PROCURED FOR THE FIRST TIME, COMPARISON TO BE MADE WITH THE
ESTIMATES.
3. FOR CAPITAL ITEMS, JUSTIFICATION TO BE GIVENBASED ON BUDGETARY ESTIMATES/MARKET INFORMATION/ COST OF SIMILAR
EQUIPMENT PROCURED AT HAL . (IF REQUIRED BY CONTACTING OTHER DIVISIONS)
4. TO BE SIGNED BY HEAD OF IMM / FINANCE WHERE CFA OF THE PROPOSAL IS CEO/CMD/PSC/BOARD.

ANNEXURE - 21 E
Enclosure -5
AGENDA FOR NEGOTIATION

TERMS & CONDITIONS AS PER VENDOR’S
SL. NO. TERMS & CONDITIONS AS PER RFQ COMMENTS OF DIVISION
OFFER
Page 253
Signature
Name/Designation
Date :
IMM Finance
ANNEXURE - 21 F
Enclosure -6
PNC RECOMMENDATION
PROJECT / NON-PROJECT:
SL. NO. DIVISION / COMPLEX
TYPE OF ITEM
1 Item Description
2 Approval reference of PNC

and Members
3 Background of Proposal /
Analysis of quoted price
4 Progresses of Negotiation
(various rounds)
5 Final Offer after

Negotiation
6 Observations on final offer/

reasons for acceptance of
Proposal
7 Savings/achievements of
Negotiations
8 Recommendation of PNC
(clear and pointed)
Signature
Designation
Date:
PNC MEMBER MEMBER MEMBER CHAIRMAN
Page 254
ANNEXURE - 21 G
INFORMATION CHECK LIST FOR PURCHASE PROPOSALS
CAPITAL ITEMS
Proposal Ref: Validity
For Purchase / PO Amendment
Vendor…………………………………………………
Item/s………………………………………………….
Value (FE)…………………………..FOB/ Ex-works
Duties & Taxes: Rs. Lakhs …………………………………
Value Rs. Lakhs……………..@CIF……..% &Ex. Rate…….(Prevailing on the date of bid opening

stipulated in the RFQ)
Mark Yes or No, if following is given in the Proposal ✓Yes x No
1a Confirmation of need for procurement
1b Confirmation of PRC’s recommendations for replacement proposals
2 Confirmation of availability of site and facilities for installation on receipt
3. Approval of Specifications by the Technical Committee.
4a. Procedure followed for Sourcing / Vendor selection given
4b Mode of Tendering: Open / limited/ single
Specific reasons in case of procurement from a single source without calling for
4c
tenders recorded.
In cases of procurement from Customer nominated sources, availability of specific
4d
request from Customer suggesting single source
4e In case of more than Rs.100 lakhs & limited tender, approval of CFA is taken or not
Whether Analysis of responses, given or not

4f
(No. of firms contacted, offers received, Time given for receiving offers etc.)
Confirm that Commercial bids of only technically acceptable offers have been
4g opened after completion of technical evaluation in case 2 bid system has been
followed.
Confirmation that laid down tendering procedures / CVC guidelines have been
4h
followed is provided.
Page 255
5a Whether summary of Technical Evaluation Committee Recommendation provided
Availability of Technical evaluation statement in support of recommendation as per

5b
format enclosed to DOP duly approved by Head of Division
Availability of Comparative statement of Prices duly checked and verified by Divi-

6
sion, as per format enclosed to DOP
Availability of Commercial Evaluation of complete terms and conditions of the Bids

7 vis-a vis the RFQ, duly checked and verified by Division, as per format enclosed to
DOP
In case of single offer, comparison of prices with technical estimates Indicated as
8a
per format enclosed to DOP
8b Has clear recommendation been made for placement of order?
PNC recommendation duly signed by all members and approved by the chairman
9
of PNC as per format enclosed to DOP
10 Are the reasons recorded if LD Clause is not provided?
11a Are payment terms indicated?
In case of advance payments, is the clause for Bank Guarantee covering the pay-
11b
ment been included?
11c Clause on Performance Bank Guarantee before final payment included.
Where payment is through LC whether the terms for LC opening, validity and
11d whether Vendor will bear the cost of LC charges both in India and elsewhere and its
subsequent amendments if any etc. are clearly spelt out.
11e Whether terms include installation and commissioning by the Vendor
Whether time frame has been indicated for installation and commissioning and
11f
penalty for delays attributable to the Vendor
Commitment from the Vendor for training of HAL employees at HAL. Details should
11g
also include areas covered and their duration
11h In case of multiple deliveries / Services, pattern of payments specified.
Whether the scope of supply includes supply of spares to be ordered along with
11i
main equipment
11j Whether the scope of supply includes supply of tooling and accessories
Whether terms of includes HAL participation in pre-dispatch inspection / machine

11k proving. (Details should also indicate number of employees and duration of the
stay)
11l Are there any other special terms/conditions specified by the vendor?
Whether status of availability of funds sanctioned by the customer for customer

12
funded procurement recorded.
Page 256
Whether the relevant Capital Budget information has been duly filled-in for both
13
commitment and expenditure.
14 Whether re-appropriation of Capital Budget is required. If so, has it been recorded?
Is there a minimum of 3 weeks before expiry of the validity of offer on the date of
15
forwarding the proposal to CO
16a Is the DOP reference correctly indicated?
16b Does this (DOP) corresponds to the mode of tendering followed
16c Availability of brief agenda, if the proposal is to be cleared by PSC / Board
17 Is the recommendation for which approval of CFA is requested, clear and pointed?
Confirmation is required whether following documents are enclosed with the proposal
18 Copy of RFQ / Tender and finally agreed L1 offer
Technical evaluation statement where applicable, duly approved by Head of Divi-

19
sion
20 If PNC is held, PNC recommendation duly approved by Chairman of PNC
Comparative statement of RFQ terms and conditions vis-à-vis proposed terms

21
and conditions
22 Comparative statement of prices
23 Price reasonability analysis worksheets
24 Draft PO with proposed terms and conditions
In cases of procurement from Customer nominated sources, Specific request from

25
Customer suggesting single source
Page 257
ANNEXURE - 21 H
INFORMATION CHECK LIST FOR PURCHASE PROPOSALS
PROJECT / NON-PROJECT
DIVISION:
Proposal Ref: ………………………… Validity
Vendor…………………………………………………
Items………………………………………………….
Value (FE)…………………………..FOB/ Ex-works
Value Rs. Lakhs……………..@CIF……..% &Ex. Rate…………..(Prevailing on the date of tender

opening i.e. Bid opening date for single bid tender and technical bid opening date in case of two bid)
Mark Yes or No, if following is given in the Proposal Yes No
Need for procurement, in case of requirements for other than approved projects/
1.
program, explained.
Confirmation that the quantities proposed are based on norms of consumption/
2a provisioning relating to the approved programme / task and that quantity in stock
/ WIP / Pipeline have been taken into account..
2b Considered year-wise Programme /Task(Project)
2c Availability of firm order from customer for sales requirements
2d Feasibility of indigenisation
2e Confirmation if Long Term Agreement (LTA) has been considered
2f Details, If TOT/ Co-Production is considered for the items (Project)
Reasons for procurement rather than production, If items are within the produc-
2g
tion range of the Division (Project) / other Divisions of HAL.
Availability of a brief for reporting to the Board if the procurement covers more
3
than 24 month’s requirements.
4a. Procedure followed for Sourcing / Vendor selection given
4b Mode of Tendering: Open /limited/single/proprietary
Specific reasons in case of procurement from a single source without calling for
4c
tenders recorded.
4d In case of more than Rs.5 Crs. & limited tender, approval of CFA is taken or not
Page 258
4e Proprietary Certificate enclosed, in case of proprietary tendering
4f Is prescribed format signed by Head of Division for proprietary tendering
In cases of procurement from Customer nominated sources, availability of spe-

4g
cific request from Customer suggesting single source
Whether Analysis of responses, given or not
4h
(No. of firms contacted, offers received, Time given for receiving offers etc.)
Confirmation that Commercial bids of only technically acceptable offers have

4i been opened after completion of technical evaluation in case 2 bid system has
been followed..
Confirmation that laid down tendering procedures/CVC guidelines have been

4J
followed is provided.
Whether reasons for procurement of project material from other than OEM /
4i
Licensor / Proprietary source, stated
Whether summary of Technical Evaluation Committee Recommendation pro-
5a
vided
Availability of Technical evaluation statement in support of recommendation as
5b
per format enclosed to DOP duly approved by Head of Division
Availability of Comparative statement of Prices duly checked and verified by

6a
Division, as per format enclosed to DOP
Availability of Commercial Evaluation of complete terms and conditions of the

6b
Bids vis-a vis the RFQ, duly checked and verified by Division, as per format
enclosed to DOP.
7 Has escalation/formula been included in proposal, if prices are not firm & fixed
In case of single / proprietary tender, comparison of prices with past procure-

8 ment prices of at least two immediate preceding procurements / technical
estimates Indicated as per format enclosed to DOP.
PNC recommendation duly signed by all members and approved by the chair-
9
man of PNC as per format enclosed to DOP where PNC was held.
10a Are payment terms indicated?
In case of advance payments, is the clause for Bank Guarantee covering the
10b
payment been included?
Where payment is through LC whether the terms for LC opening, validity and
10c whether Vendor will bear the cost of LC charges both in India and elsewhere
and its subsequent amendments if any etc. are clearly spelt out.
Has staggered delivery been indicated in case of procurement exceeds 12 months
11a
requirement.
11b Whether the delivery schedule is commensurate with the task requirement.
11c Are the reasons recorded if LD Clause is not provided?
Whether stipulated Warranty / Shelf life is available covering the last delivery by
11d
HAL to its Customers.
Page 259
Details of documents such as release notes, manuals etc to be supplied along

11e
with material
11f Are there any other special terms/conditions specified by the vendor.
Recoverability of price in full from the customer w.r.t agreed price/FPQ /RMSO
12a
value / Price catalogue confirmed or not
In other cases, are the prices confirmed to be within the material estimates
12b
included in the approved Project Report/sanction.
Whether status of availability of funds sanctioned by the customer for customer
12c
funded procurement recorded.
Whether the relevant Performance Budget information has been duly filled-in w.r.t
13
purchase commitments
Is there a minimum of 3 weeks before expiry of the validity of offer on the date of
14
forwarding the proposal to CO
15a Is the DOP reference correctly indicated
15b Does this (DOP) corresponds to the mode of tendering followed
15c Availability of brief agenda if the proposal is to be cleared by PSC/Board
Is the recommendation for which approval of CFA is requested, clear and

16
pointed
Confirmation is required whether following documents are enclosed with the proposal
17 Approved MPR
18 Copy of RFQ / Tender and finally agreed L1 offer
19 Proprietary certificate in case of proprietary tendering
Technical evaluation statement where applicable, duly approved by Head of

20
Division
21 If PNC is held, PNC recommendation duly approved by Chairman of PNC
Comparative statement of RFQ terms and conditions vis-à-vis proposed terms

22
and conditions
23 Comparative statement of prices
24 Price reasonability analysis worksheets
25 Draft PO with proposed terms and conditions
In cases of procurement from Customer nominated sources, Specific request

26
from Customer suggesting single source
Page 260
ANNEXURE - 22
BRIEF SUMMARY OF THE PROPOSAL FOR APPROVAL
BY PROCUREMENT SUB-COMMITTEE / BOARD OF DIRECTORS
DIVISION : PROJECT :
1 Introduction
2 Provisioning & year of requirement
Name of vendor & Value of the proposal

country
Value in FE:
Incoterm :
3 Vendor / Value
CIF Value :
Ex. Rate :
EC :
Tendering
4 (Open / Limited / Proprietary/ Cus-
tomer nominated / Licensor/ Single)
(Rs. in Crs.)
Price before negotiation:

5 Negotiation if done
Price after negotiation :
Savings achieved : (________%age)

Previous procurement price / :
HAL estimate price
6 Price reasonability Proposed procurement price :
%age of increase :
Justification for price increase :
Justification for under recovery, if any.
7 Price recoverability
8 Payment terms
9 Delivery / Lead time
10 Integrity Pact (Fully Compliant)
Other major terms & conditions
11
including escalation (if any).
12 Remarks, if any
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ANNEXURE - 22 A
CHRONOLOGY OF PROGRESSION OF PURCHASE PROPOSAL
Division :
Proposal:
Sl. No. of days
Activity Date Remarks
No. taken
1 MPR Initiated -
2 MPR approved
3 RFQ issued
4 RFQ due date
5 Technical Bid opened
6 TEC Recommendation
7 Price bid opened
8 PNC proposal initiation
9 PNC held
10 PNC recommendation initiation
11 PNC recommendation approved
12 Purchase proposal initiated
13 Purchase proposal signed by Head of IMM
14 Purchase proposal pre-audited by Divisional SYA

15 Purchase proposal concurred by Divisional Finance
16 Purchase proposal cleared by cleared by GM/ED
17 Purchase proposal sent to Complex Office
18 Purchase proposal received at Complex office
19 Purchase proposal cleared by Complex Finance
20 Purchase proposal cleared by MD/FD
21 Purchase proposal sent to CO
22 Purchase proposal received at CO
23 Query sent from Proposal Cell
24 Query received from Complex Office
25 Purchase proposal initiated by Proposal Cell
26 Purchase proposal cleared by Head of IMM
27 Purchase proposal cleared by Head of Planning
28 Purchase proposal pre-audited by GM (F) - A&A
29 Purchase proposal concurred by GM(F)
30 Purchase proposal cleared by D (OPS)
31 Purchase proposal cleared by DF
32 Purchase proposal cleared by CMD
33 Purchase proposal sanction date
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ANNEXURE - 23 A
IMM DEPARTMENT
GENERAL TERMS & CONDITIONS OF CONTRACT
QUALITY & WORKMANSHIP
1 Generally the stores shall be of the best quality and workmanship. Contractor shall comply with the
contract in all respects be to the satisfaction of HAL. Where tenders are called for in accordance
with ‘particulars’, the contractor’s tenders to supply in accordance with such `particulars’ shall be
deemed to be an admission on his part that he has fully acquainted himself with the details thereof
and no claim on his part which may arise on account of non-examination or insufficient examination
of the ‘particulars’ will in any circumstances be considered. The contractor shall supply the stores
in accordance with the ‘particulars’ unless any deviation is authorised as an exception expressly
specified in the Purchase Order.
The Stores/ Goods supplied shall conform to the standards, if mentioned in the Technical Specifications,
or, where no applicable standard is mentioned, to the authoritative standards appropriate to the
Goods’ country of origin. Such standards shall be the latest issued by the concerned institution.
SHELF LIFE
2. Where stores offered have a limited shelf life, kindly indicate the life and confirm that such stores
shall have a minimum of _____% (to be specified by the Division) of shelf life at the time of despatch.
In respect of rubber items such as Seals etc. having cure date, the item should not have been
manufactured earlier than 6 months of despatch
WARRANTY
3. For a period of twelve calendar months, after the goods have been taken over by HAL, the contractor
shall be responsible for any defects that may develop due to faulty materials, design or workmanship
and shall remedy such defects at his own cost when called upon to do so by HAL who shall state
in writing in what respect the portion is faulty. If it becomes necessary for the contractor to replace
or renew any defective portion of the goods the contractor shall make such replacement or renewal
without any extra cost to HAL.
During warranty minimum uptime of 95% shall be ensured failing which warranty period shall deem
to be proportionately extended. During warranty period equipment shall be replaced/ repaired free
of cost including any to & fro freight/insurance involved. Supplier shall attend to warranty calls within
48 hours notice.
SUPPLY OF SAMPLES
6. Samples submitted for any reasons shall be supplied without charge and freight paid and without
any obligation on the Purchaser as regards safe custody. All samples submitted must be clearly
labeled with the contractor’s name and address and tender number. If the contractor submits the
samples with his tender the same shall not govern the standard of supply except when it has been
specifically stated in the Purchase Order that it is accepted instead of any sealed pattern. Should
certified samples be lent to a contractor by HAL the contractor is responsible for the return in perfect
order of all certified samples with the labels intact.
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PACKING
5. The contractor will be held responsible for the stores being sufficiently 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 injury on
arrival at their destination. The packing and marking of packages shall be done by and at the expense
of the Contractor. Each package shall contain a Packing Note quoting Purchase Order number and date
showing its contents in detail. Each shall be properly marked with Purchase Order No., Consignee’s
name & address, package-handling instructions etc. The package shall have adequate provision for
handling during transit.
RECEIPT & DESPATCH
6. The Contractor is responsible for obtaining a clear receipt from the Transport Authorities specifying the
goods dispatched. He will not book any consignment on a said to contain’ basis. If he does so, he does
it on his own responsibility. HAL will take no responsibility for short deliveries or wrong supply of goods
when the same are booked on said to contain’ basis. HAL shall pay for only such stores as are actually
received by them in accordance with the contract.
FIRM PRICES
7 The contract prices will be firm as fixed as per contract terms till execution of contract and exclude
subsequent claims or price increases of any kind.
SALES TAX & EXCISE DUTY
8. Sales Tax, Local or Central Excise Duties, wherever leviable and intended to be claimed from HAL should
be distinctly shown along with the prices quoted. Where this is not done, no claim for Sales Tax/Excise
Duty will be admitted at a later stage on any ground whatsoever. Sales Tax is payable only when sales
tax registration number is given in your bill with certificate that the sales tax charges from us shall be paid
to authorities concerned.
DELIVERIES, CONSEQUENCES OF BREACH
9 The date of delivery stipulated in the Purchase Order shall be deemed to be the essence of the Contract,
and delivery must be completed on or by the dates mentioned in the Purchase Order or the tender.
Should the contractor fail to deliver the stores or any consignment thereof within the period prescribed
for such delivery, HAL shall be entitled at their option:
a To recover from the Contractor as per liquidated damages, and not by way of penalty, a sum of
0.5% of the price of any stores which the contractor has failed to deliver as aforesaid, for each
week or part thereof during which the delivery or such stores may be in arrears subject to a
maximum of 10% of the price of the stores in default.
OR
b To purchase elsewhere, without notice to the Contractor on the account and at the risk of
the contractor, the stores not delivered or others of a similar description (where other exactly
complying with the particulars are not available), HAL’s decision in this respect will be final,
OR
c To terminate the contract
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10 In the event of action being taken under para-a & b above, the Contractor shall be liable for any loss which
HAL may sustain on the account but the Contractor shall not be entitled to any gain on repurchases
made against default.
EXTENSION OF TIME
11 If an extension is desired by the supplier, contractor shall apply for extension of time to HAL at least 15
days prior to the date of delivery without prejudice to the rights of HAL, mentioned in Clause-9, then HAL
may grant extension of time for any cause which HAL may deem proper and the decision of HAL in this
respect to be final and binding and cannot be questioned in any manner whatsoever.
INSPECTION, CONSEQUENCES OF REJECTION
12 The goods on receipt in HAL will be subject to inspection and tests, if necessary and HAL inspector’s
decision as regards acceptance/rejection of goods shall be final and binding on the parties. (In case of
Plant & Machinery, goods shall be finally inspected & accepted only after successful commissioning)
If any stores are rejected, HAL shall be at liberty to:
a Now the contractor to re-submit stores in replacement of those rejected within a time specified
by HAL, the contractor bearing the cost of freight in such replacement without being entitled to
any extra payment,
OR
b Buy the quantity of stores rejected or other of a similar nature elsewhere at the risk and cost
of the contractor without effecting the contractor's liability as regards the supply of any further
consignments due under the contract,
OR
c Terminate the contract and recover from the contractor the loss HAL may thereby incur. The
contractor shall not be entitled to any gain on the repurchase,
OR
d Any stores rejected by HAL’s Inspector must be removed by the contractor within 14 days from
the date of receipt of intimation of rejection and at his own cost, failing which the contractor shall
be liable to pay storage charges at 1% for each day of delay on the invoice value of the stores. If
the stores are not removed within a month from the date of intimation of rejection, the stores will
be liable, to be sold by HAL at the contractor’s risk and responsibility and the proceeds adjusted
towards storage charges.
c In case any payment is made against delivery and it is found that the supplied item is rejected
during inspection/commissioning, contractor will be required to choose any one of the following
options to collect the rejected item for replacement:
Refund the amount paid and collect the item for replacement.
Submit a Bank Guarantee for the amount already paid and collect the item for replacement.
Bring the replacement item to HAL and collect the rejected item.
PLANT AND MACHINERY SUPPLIES
13 In case of contracts for Plant and Machinery, requiring inspection and test after erection at site if the
completed plant or any portion thereof before it is taken over is defective or fail to ful fill the requirements
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of the contract, HAL shall give the contractor notice setting from details of such defects or failures and
the contractor shall forthwith make the defective plant good to make it comply with the requirements of
the contract. Should he fail to do so within a reasonable time, HAL may reject and replace at the cost of
the contractor the whole or any portion of the plant, as per the requirements of the contract. replacement
shall be carried out by HAL, within a reasonable time, at reasonable price and where reasonably possible,
to the same particulars under competitive conditions.
APPROPRIATION
14 Whenever under this contract any sum of money is recoverable from any payable by the contractor, HAL
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 contractor in this or any other contract entered
by HAL as a whole its Divisions and Branch Offices etc., held by him alone or in partnership with others.
Should this sum be not sufficient to cover the full amount recoverable, the contractor shall pay to HAL
on demand the remaining balance due.
PAYMENT FOR STORES
15 Unless otherwise agreed to between the parties, HAL will effect payment for the delivery of the stores by
Electronic Bank Transfer (ECE/RTGS) to the suppliers bank account as notified to HAL on submission of
bills in triplicate. Payment for the stores on each delivery will be made to the contractor after goods are
received and passed by inspection. Normally 30 days will be allowed for inspection after receipt of goods.
PAYMENT FOR PLANT AND MACHINERY
16 In case of contracts, for Plant and Machinery requiring inspection and test after erection at site
only 80% of the contract price of each consignment delivered to HAL will be made after preliminary
inspection. The balance 20% of the contract price plus the cost of erection (if the erection is
undertaken by the contractor) will be paid on final inspection and test and furnishing of Performance
Bank Guarantee. Test will be carried out within one month of the completion of erection. Should the
result of these tests not come up within the margin specified the tests shall, if required, be repeated
within one month from the date the plant is ready for retest.
TERRITORY
17 This contract shall be governed by and subject to and interpreted and construed in accordance with
the Laws of Republic of India, as may be in force from time to time.
INDEMNITY
18 The contractor shall at all times indemnify HAL against all claims which may be made in respect of the
stores for infringement of any right protected by patent, registration of design or trade mark.
BRIBES AND GIFTS
19 Any bribe, commission, gift or advantage given, promised or offered by or on behalf of the contractor
or his parties, agent or servant or any one on his or their behalf to any officer, servant, representative
of HAL or any person on his or their behalf in relation to the obtaining or to the execution of this or
any other contract with HAL shall in addition to any criminal liability which the contractor may incur,
subject the contractor to the cancellation of this and all other contracts with HAL and also to payment
of any loss or damage resulting from any such cancellation under clauses-8 and 10 thereof. Any
question or dispute as to the commission of any offence under the present clause shall be settled by
HAL in such manner and on such evidence or information as they may think fit and sufficient and their
decision shall be final and conclusive.
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SUB-CONTRACT
20 Neither of the parties of this contract shall be entitled without the other party’s consent to assign or
transfer to a third party all or part of the benefits or obligations of this contract.
ARBITRATION
21 All disputes or differences whatsoever arising between the parties out of or relating to the construction
meaning and operating or effect of this contract or the breach thereof shall be settled by arbitration in
accordance with the rules of arbitration of the ICA/ICADR and the award made in pursuance thereof
shall be binding on the parties.
WORK AND PAYMENT DURING ARBITRATION
22 Work under the contract shall if reasonably possible continue by mutual agreement during the
arbitration proceedings and no payment due to or payable by HAL will be withheld without reasonable
cause and merely on account of the pendency of such proceedings.
JURISDICTION
23 The Court at__________ only shall have jurisdiction to deal with and to decide any legal matter
whatsoever arising out of this contract.
SECURITY DEPOSIT
24. Security Deposit:
a) The successful vendor, shall have to deposit 5% of the value of the order as Security Deposit
within 15 days of receipt of the purchase order, by demand draft or bank guarantee in a prescribed
format of H.A.L. from a schedule bank in India/Bank of International repute (for foreign vendors)
valid up to 60 days after the completion of contract period/last supply. This Security Deposit will
bear no interest and will be returned only after the contract is completed to the entire satisfaction
of H.A.L.
b) In case the contract is not executed to the entire satisfaction of H.A.L, the security deposit shall
be forfeited, besides initiation of risk purchase action.
PERFORMANCE BANK GUARANTEE
25. Vendor shall furnish a Performance Bank Guarantee as per HAL’s format (enclosed) for 10% of order
value valid till end of the guarantee / warranty period from a scheduled bank in India / Bank of
international repute (for foreign vendors) from the date of acceptance.
POST-WARRANTY SERVICE
26. The supplier shall supply spare parts to HAL under reasonable conditions throughout the period
of the usual technical lifetime, but in any case for a period of ten years after the last delivery. If the
supplier discontinues the delivery of goods after expiration of the period set forth above or during that
period, he shall provide HAL with the opportunity for a last order under reasonable conditions.
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Arrangements for after sales service and maintenance in India (authorized service centre) on site
during warranty & post warranty period should be clearly indicated providing with name, address,
phone, fax, contact person, infrastructure along with spare parts inventory held by your Authorized
Technical Service Center. Supplier to indicate the validity period of authorization for the technical
service centre.
TRAINING / FACTORY ACCEPTANCE TEST :
27. Vendor shall impart free training to HAL’s Personal in the area of programming, operation, mechanical
maintenance and electronic/electric maintenance at Vendor’s work and also during commissioning.
Boarding, lodging & travel of HAL’s personnel shall be borne by HAL.
FALL CLAUSE
28. The price quoted shall be in no event exceed the lowest price at which you sell the stores or offer
to sell stores of identical description to any person(s) / organization including the purchases by any
department of the Govt. of India, the State Govt. or any statutory undertaking of the Govt. of India /
State Govt., as the case may be during the period till the completion of the performance of the order
placed and during currency of the order.
If at any time during the said period, the contractor reduces the sales price, sells or offers to sell such
stores to any person/organization including the purchaser or any department of Central Govt. or any
Dept. of State Govt., or any statutory undertaking of the Central or State Govt., as the case may be
at a price lower than the price chargeable under the contract, he shall forthwith notify such reduction/
sale or offer to sale to the Hindustan Aeronautics Limited and the price payable under the contract for
the stores supplied after the date of coming into force of such reduction or sale or offer to sale shall
stand correspondingly reduced.
EXPORT LICENSE
29. Foreign Vendors making proposals should ensure availability of export licence as per their Govt.
regulations for export to India. Vendor shall be required to obtain and maintain all Export/Import
licences and permits etc., as the case may be, required for performing supplies against this tender.
Obtaining export licence shall be entire responsibility of the vendor.
AGENTS/AGENCY COMMISSION
30. The seller confirms and declares to the buyer that the seller is the original manufacturer or authorized
(applicable in case of countries where domestic laws do not permit direct export by OEMS) of the stores
referred to in this offer / contract / Purchase order and has not engaged any individual or firm, whether
Indian or Foreign whatsoever, to intercede, facilitate or in any way to recommend to Buyer or any of its
functionaries, whether officially or unofficially, to the award of the contract / purchase order to the Seller;
nor has any amount been paid, promised or intended to be paid to any such individual or firm in respect
of any such intercession, facilitation or recommendation. The Seller agrees that if it is established at
any time to the satisfaction of the Buyer that the present declaration is in any way incorrect or if at a
later stage it is discovered by the Buyer that the Seller has engaged any such individual / firm, and paid
or intended to pay any amount, gift, reward, fees, commission or consideration to such person, party,
firm or institution, whether before or after the signing of this contract / purchase order, the Seller will be
liable to refund that amount to the Buyer. The Seller will also be debarred from participating in any RFQ
/ Tender for new projects / program with Buyer for a minimum period of five years. The Buyer will also
have a right to consider cancellation of the Contract / Purchase order either wholly or in part, without
any entitlement or compensation to the Seller who shall in such event be liable to refund all payments
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made by the Buyer in terms of the Contract / Purchase order along with interest at the rate of 2% per
annum above LIBOR (London Inter Bank Offer Rate) (for foreign vendors) and Base Rate of SBI (State
Bank of India) plus 2% (for Indian vendors). The Buyer will also have the right to recover any such
amount from any contracts / Purchase order concluded earlier with Buyer.
HAL has not appointed / authorized any person / agent to deal with the vendors in respect of the said
contract. In case, if someone claims and interacts with the vendors it shall be duty of the vendors to
bring such instances to the notice of HAL Management.
IMMUNITY TO GOVERNMENT OF INDIA:
31. It is expressly understood and agreed by and between supplier & purchaser that purchaser is entering
into this contact solely on its own behalf and not on behalf any other person or entity. In particular, it
is expressly understood and agreed that Government of India is not a party to this contract and has
no liabilities, obligations or right hereunder. It is expressly understood and agreed that purchaser is
an independent legal entity with power and authority to enter into contracts solely on its own behalf
under the applicable laws of India and general principles contract law. Supplier expressly agreed
acknowledges and understand that purchaser is not an agent, representative or delegate to the
Government of India. It is further agreed and understood that Government of India is not and shall
not be liable for any acts, omissions, commissions, breaches or other wrongs arising out of the
contract. Accordingly, supplier hereby expressly waives releases and foregoes any and all actions,
including counterclaims, impleader claims or counter claims against the Government of India arising
out of this contract and covenants as to any manner, claim cause or action or this whatsoever arising
out of or under this contract.
CONFIDENTIALITY
32. The Supplier shall hold confidential technical data and information supplied by the Purchaser or on
33. In the development orders, where technical inputs/assistance is provided to the vendors, the Intellectual
Proprietary Rights (IPR) will rest with HAL. Vendor will not directly deal with HAL’s customer for these items.
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ANNEXURE - 23 B
Format of Bank Guarantee for Advance Payment
1. In consideration of the HINDUSTAN AERONAUTICS LTD.,______________ Division (hereinafter
called as “HAL”) having agreed to make advance payment to ____________ [hereinafter called “the
said Contractor/ Supplier(s)”], under Agreement/ Contract/ Order No.________dated_________
(hereinafter called “the said Agreement the said Contract said Order”), made between ____________
and ______________for___________ (indicate the scope of supply), for the due fulfillment of the
terms and conditions contained in the said Agreement/Contract/Order, on production of a bank
Guarantee for _______________(indicate the amount in Rs / Foreign Currency) (____________Only),
We, ______________, (hereinafter referred (indicate the name of the bank) to as “the Bank”) at the
request of ______________ [Contractor/supplier(s)] do hereby undertake to pay to HAL an amount not
exceeding._____________ (indicate the amount in Rs / Foreign Currency) against any loss or damage,
costs, charges and expenses, claims caused tot suffered or would be caused tot suffered by HAL by
reason of any breach by the said Contractor/supplier(s) of any of the terms or conditions contained in
the said Agreement / Contract/ Order.
2. We,________________________ (indicate the name of the bank) do hereby unreservedly, irrevocably

undertake to pay the amounts due and payable under this guarantee without any demur, merely on
demand from HAL within fifteen (15) days of such demand stating that the amount claimed is due by
way of loss or damage caused to or would be caused to or suffered by HAL by reason of breach by
the said Contractor/Supplier(s) of any of the terms or conditions contained in the said Agreement/
Contract/Order or by reason of the contractor/Supplier(s)’ failure to perform the said Agreement/
Contract/Order. Any such demand made on the bank shall be conclusive as regards the amount due
and payable by the Bank under this guarantee. However, our liability under this guarantee shall be
restricted to an amount not exceeding________________________ (indicate the amount in Rs / Foreign
Currency).
3. We undertake to pay to HAL an amount not exceeding________________ (indicate the amount in Rs /

Foreign Currency)so demanded notwithstanding any dispute or disputes raised by the contractor(s)/
supplier(s) in any suit or proceeding pending before any Court or Tribunal relating thereto, Our liability
under this guarantee being absolute and unequivocal.
4. We, _____________________(indicate the name of bank) further agree with HAL that HAL shall have
the fullest liberty without our consent and without affecting in any manner our obligations hereunder
to vary any of the terms and conditions of the said Agreement/Contract/Order or to extend time
of performance by the said Contractor/Supplier(s) from time to time or to postpone for any time
or from time to time any of the powers exercisable by HAL against the said contractor/Supplier(s)
and to forbear or enforce any of the terms and conditions relating to the said Agreement/Contract/
Order and we shall not be relieved from our liability by reason of any such variation, or extension
being granted to the said Contractor/Supplier(s) or for any forbearance, act or omission on the part
of HAL or any indulgence by HAL to the said Contractor/ Supplier(s) or by any such matter or thing
whatsoever which under the law relating to sureties would, but for this provision, have effect of so
relieving us.
5. We,_____________________________ (indicate the name of bank) lastly undertake not to revoke this
guarantee during its currency except with the previous consent of HAL in writing and agree that any
change in the constitution of the said contactor(s)/Supplier(s) or Bank shall not discharge the Bank of
its liability under this deed.
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6. The validity of Bank Guarantee shall be up to _________(dd/mm/yy) and such date shall be 60
days after the last delivery/Services against the contract. The Bank Guarantee shall continue to be
enforceable till all the dues of HAL under or by virtue of the said Agreement / Contract/Order have
been fully paid and its claims satisfied or discharged or till HAL certifies that the terms and conditions
of the said Agreement/Contract/Order have been fully and properly carried out by the said contractor/
supplier(s) and accordingly discharges this guarantee.
7. This Bank Guarantee shall be governed by and constitute in accordance with Indian Law and shall be
subject to exclusive Jurisdiction of Indian Courts.
8. Dated the __________day of_________for __________________(indicate the name of the Bank).
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ANNEXURE - 23 C
Format of Bank Guarantee for Security Deposit
1. In consideration of the HINDUSTAN AERONAUTICS LTD.,________________ Division (hereinafter called
as “HAL”) having agreed to exempt____________________ [hereinafter called “the said Contractor/
Supplier(s)”] from the demand, under Agreement/Contract/Order No.___________ dated __________
(hereinafter called “the said Agreement” said Contract/ said Order), made between _________________
and ____________________for _______________(indicate the scope of supply) of security deposit for
the due fulfillment by the said Contractor/Supplier(s) of the terms and conditions contained in the
said Agreement/ Contract/ Order, on production of a bank Guarantee for_____________ (indicate
the amount in Rs / Foreign Currency)( , Only), We, _____________ , (hereinafter referred (indicate the
name of the bank) to as “the Bank”) at the request of _________________ [contractor/supplier(s)] do
hereby undertake to pay to HAL an amount not exceeding ______________ (indicate the amount in
Rs / Foreign Currency) against any loss or damage, costs, charges and expenses, claims caused
tol suffered or would be caused to suffered by HAL by reason of any breach by the said Contractor/
supplier(s) of any of the terms or conditions contained in the said Agreement/ Contract/ Order.
2. We,_____________________ (indicate the name of the bank) do hereby unreservedly, irrevocably

undertake to pay the amounts due and payable under this guarantee without any demur, merely
on demand from HAL within fifteen (15) days of such demand stating that the amount claimed is
due by way of loss or damage caused to or would be caused to or suffered by HAL by reason of
breach by the said contractor(s)/supplier of any of the terms or conditions contained in the said
Agreement./Contract/Order or by reason of the contractor(s)’ failure to perform the said Agreement/
Contract/ Order. Any such demand made on the bank shall be conclusive as regards the amount due
and payable by the Bank under this guarantee. However, our liability under this guarantee shall be
restricted to an amount not exceeding______________________ (indicate the amount in Rs / Foreign
Currency)
3. We undertake to pay to HAL an amount not exceeding_________________ (indicate the amount in Rs /

Foreign Currency) so demanded notwithstanding any dispute or disputes raised by the contractor(s)/
supplier(s) in any suit or proceeding pending before any Court or Tribunal relating thereto, Our liability
under this guarantee being absolute and unequivocal.
4. We,__________________ (indicate the name of bank)further agree with HAL that HAL shall have the
fullest liberty without our consent and without affecting in any manner our obligations hereunder to
vary any of the terms and conditions of the said Agreement/ Contract/ Order or to extend time of
performance by the said contractor/supplier(s) from time to time or to postpone for any time or from
time to time any of the powers exercisable by HAL against the said Contractor(s)/supplier and to
forbear or enforce any of the terms and conditions relating to the said agreement/contact/order and
we shall not be relieved from our liability by reason of any such variation, or extension being granted
to the said Contractor/supplier(s) or for any forbearance, act or omission on the part of HAL or any
indulgence by HAL to the said Contractor/supplier(s) or by any such matter or thing whatsoever
which under the law relating to sureties would, but for this provision, have effect of so relieving us.
5. We,______________________ (indicate the name of bank) lastly undertake not to revoke this guarantee
during its currency except with the previous consent of HAL in writing and agree that any change in
the constitution of the said contactor(s)/Supplier(s) or Bank shall not discharge the Bank of its liability
under this deed.
6. The validity of Bank Guarantee shall be up to____________ (dd/mm/yy) and such date shall be 60
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days after the last delivery/Services against the contract. The Bank Guarantee shall continue to be
enforceable till all the dues of HAL under or by virtue of the said Agreement/contact/order have been
fully paid and its claims satisfied or discharged or till HAL certifies that the terms and conditions of
the said Agreement/contact/order have been fully and properly carried out by the said contractor(s)/
supplier and accordingly discharges this guarantee.
8. Dated the ___________day of_________for___________ (indicate the name of the Bank)
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ANNEXURE - 23 D
FORMAT OF PERFORMANCE BANK GUARANTEE
1. HINDUSTAN AERONAUTICS LTD.,______________ Division (hereinafter called as “HAL”) have entered
into Agreement/Contract/Order____________ (hereinafter called “the said Agreement/ the said
Contract/ the said Order’/), with ______________[hereinafter called “the said Contractor / Supplier(s)”],
for _____ (indicate the scope of supply).
2. Where as under the terms of the said Agreement/ Contact/ Order, the contractor/ Supplier is required
to furnish a Performance Bank Guarantee for_____________ (indicate the amount in Rs / Foreign
Currency) _______________ (Only) towards the due fulfillment of the terms and conditions during the
agreed time period or extension thereof, and also satisfactory performance of the items supplied to
HAL during warranty period as per the warranty terms stipulated in the Agreement/ Contract/Order.
3. Accordingly We,_______________ , (hereinafter referred (indicate the name of the bank) to as “the
Bank”) at the request of__________________ [Contractor/supplier(s)] do hereby undertake to pay to
HAL an amount not exceeding_____________ (indicate the amount in Rs / Foreign Currency) on the
failure of Contractor/Supplier in performance of their obligations as per the terms and conditions of
the Agreement/Contract/Order including the satisfactory performance of the item during warranty
period as per the warranty terms stipulated in the Agreement/ Contract/Order.
4. We,_______________________ (indicate the name of the bank) do hereby unreservedly, irrevocably

undertake to pay the amounts due and payable under this guarantee without any demur, merely on
demand from HAL within 10 days of such demand stating that the amount claimed is due by way of non
performance / unsatisfactory performance by the contractor with respect to the terms and conditions
of the Agreement / Contract/ Order including failure in satisfactory performance of the items supplied
/ services rendered under the warranty terms stipulated in the Agreement/ Contract /Order. Any such
demand made on the bank shall be conclusive as regards the amount due and payable by the Bank
under this guarantee. However, our liability under this guarantee shall be restricted to an amount not
exceeding______________ (indicate the amount in Rs / Foreign Currency).
5. We undertake to pay to HAL an amount not exceeding___________ (indicate the amount in

Rs / Foreign Currency) so demanded notwithstanding any dispute or disputes raised by the
contractor(s)/supplier(s) in any suit or proceeding pending before any Court or Tribunal relating
thereto our liability under this guarantee being absolute and unequivocal.
6. We, _______________________(indicate the name of bank) further agree that the guarantee herein
contained shall remain in full force and effect, during the period that would be taken for the
performance of the said Agreement/Contract / Order and that it shall continue to be enforceable
till all the dues of HAL under or by virtue of the said Agreement / Contract/Order have been
fully paid and its claims satisfied or discharged or till HAL certifies that the terms and conditions
of the said Agreement/Contract/Order have been fully and properly carried out by the said
Contractor/supplier(s) and accordingly discharges this guarantee.
7. We,_______________________ (indicate the name of bank) further agree with HAL that HAL shall
have the fullest liberty without our consent and without affecting in any manner our obligations
hereunder to vary any of the terms and conditions of the said Agreement or to extend time of
performance by the said contractor/Supplier(s) from time to time or to postpone for any time or
from time to time any of the powers exercisable by HAL against the said contractor/Supplier(s)
and to forbear or enforce any of the terms and conditions relating to the said Agreement/
Contract/Order and we shall not be relieved from our liability by reason of any such variation, or
Page 274
extension being granted to the said Contractor/Supplier(s) or for any forbearance, act or omission on
the part of HAL or any indulgence by HAL to the said Contractor/Supplier(s) or by any such matter
or thing whatsoever which under the law relating to sureties would, but for this provision, have effect
of so relieving us.
8. We,______________________ (indicate the name of bank) lastly undertake not to revoke this guarantee
during its currency except with the previous consent of HAL in writing and agree that any change in
the constitution of the said contactor(s)/Supplier(s) or the said Bank shall not discharge the Bank of
its liability under this deed.
9. The validity of Bank Guarantee shall be up to________ (dd/mm/yy) and such date shall cover the
period of warranty of all the supplies and also the period of defect liability/ warranty period for last
batch of supplies. The validity of Bank Guarantee will be for a period up to which the contractor is
obliged for due performance of the said Agreement/Contract/Order including the warranty period.
11. Dated the ____________day of ______________for ___________ (indicate the name of the Bank)
Page 275
ANNEXURE - 23 E
Format of Bank Guarantee towards Earnest Money
1 In consideration of the HIDUSTAN AERONAUTICS LIMITED___________________Division (hereinafter
called as “HAL”) on the first part and M/s_____________________of_____________________(hereinafter
referred to as “Bidder”) on the Second part, having agreed to accept the Earnest Money Deposit
of Rs_______(Rupees___________)in the form of Bank Guarantee for the Request for Proposal for
procurement of ___________________
2. We ____________________ (Name of the Bank), (hereinafter referred to as the “Bank”), do hereby

undertake to pay to HAL on demand within 3 (three) working days without any demur and without
seeking any reasons whatsoever, an amount not exceeding___________ (Rupees________________)
and the guarantee will remain valid upto a period ____________. It will, however, be open to HAL to
return the Guarantee earlier than this period to the Bidder(s), in case the Bidder (s) does not/do not
qualify for the negotiation by the Price Negotiation Committee (PNC) as constituted by HAL.
3. In the event of the Bidder withdrawing the tender before the completion of the stages prior to the
Price negotiations or during the Price negotiation or during validity of offer, as the case may be, the
Guarantee deposited by the Bidder stands forfeited to HAL. We also undertake not to revoke this
guarantee during this period except with the previous consent of HAL in writing and we further agree
that our liability under the Guarantee shall not be discharged by any variation in the term of the said
tender and we shall be deemed to have agreed to any such variation.
No interest shall be payable by HAL to the Bidder (s) on the guarantee for the period of its currency.
Dated this _________________________day of _________________20
For the Bank of ________________
(Agent /Manager)
Page 276
ANNEXURE - 24
Tender Ref. No.:………………………………….
Integrity Pact
Whereas Hindustan Aeronautics Ltd. (“HAL”) having its registered office at 15/1, Cubbon Road, Bangalore
– 560 001, India, acting through its ……………..Division, represented by General Manager / Executive
Director hereinafter referred to as the Buyer and the first party, proposes to procure (Name or category of the
Equipment, like Aircraft Parts/ Avionic Items/ Accessories etc),hereinafter referred to as Stores.
And
M/s………………………….., represented by……………………… , Chief Executive Officer (which term, unless

expressly indicated by the contract, shall be deemed to include its successors and its assignee), hereinafter
referred to as the Bidder/ Seller and the second party, is willing to offer/ has offered the stores.
2. Whereas the Bidder / Seller is a private company/public company /partnership/ registered export
agency, constituted in accordance with the relevant law in the matter and the Buyer is a Public Sector
Undertaking and registered under Companies Act 1956.
3. Preamble
The Buyer has called for tenders under laid down organizational procedures intending to enter into
contract/s for supply / purchase / etc of……………………………………………………and the Bidder /
Seller is one amongst several bidders/Proprietary Vendor/Customer Nominated Source/Licensor who
has indicated a desire to bid/supply in such tendering process. The Buyer values and takes primary
responsibility for values full compliance with all relevant laws of the land, rules, regulations, economic
use of resources and of fairness / transparency in its relations with its Bidder(s) and / or Seller(s).
In order to achieve these goals, the Buyer will appoint Independent External Monitor(s) (IEM)
in consultation with Central Vigilance Commission, who will monitor the tender process and the
execution of the contract for compliance with the principles mentioned above.
4. Commitments of the Buyer.
4.1 The Buyer commits itself to take all measures necessary to prevent corruption and to observe the
following principles:-
i) No employee of the Buyer, personally or through family members, will in connection with the
tender, or the execution of a contract demand, take a promise for or accept, for self or third
person, any material or immaterial benefit which the person is not legally entitled to.
ii) The Buyer will during the tender process treat all Bidder(s) / Seller(s) with equity and reason. The
Buyer will in particular, before and during the tender process, provide to all Bidder(s) / Seller(s)
the same information and will not provide to any Bidder(s) / Seller(s) confidential / additional
information through which the Bidder(s) / Seller(s) could obtain an advantage in relation to the
process or the contract execution.
iii) The Buyer will exclude from the process all known prejudiced persons.
4.2 If the Buyer obtains information on the conduct of any of its employees which is a criminal offence
under the Prevention of Corruption Act 1988 or if there be a substantive suspicion in this regard, the
Page 277
Buyer will inform to its Chief Vigilance Officer and in addition can initiate disciplinary action.
5. Commitments of the Bidder(s) / Seller(s).
5.1 The Bidder(s)/ Seller(s) commit himself to take necessary measures to prevent corruption. He commits
himself to observe the following principles during his participation in the tender process and during
the contract execution.
i) The Bidder(s)/ Seller(s) will not, directly or through any other persons or firm, offer promise
or give to any of the Buyer’s employees involved in the tender process or the execution of
the contract or to any third person any material or other benefit which he / she is not legally
entitled to, in order to obtain in exchange any advantage during the tendering or qualification
process or during the execution of the contract.
ii) The Bidder(s)/ Seller(s) will not enter with other Bidders / Sellers into any undisclosed
agreement or understanding, whether formal or informal. This applies in particular to prices,
specifications, certifications, subsidiary contracts, submission or non submission of bids
or any other actions to restrict competitiveness or to introduce cartelization in the bidding
process.
iii) The Bidder(s)/ Seller(s) will not commit any offence under the Prevention of Corruption Act
1988: further the Bidder(s)/ Seller(s) will not use improperly, for purposes of competition or
personal gain, or pass on to others, any information or document provided by the Buyer as
part of the business relationship, regarding plans, technical proposals and business details,
including information contained or transmitted electronically.
5.2 The Bidder(s)/ Seller(s) will not instigate third persons to commit offences outlined above or be an
accessory to such offences.
5.3 Agents / Agency Commission:
The seller confirms and declares to the buyer that the seller is the original manufacturer or authorized
(applicable in case of countries where domestic laws do not permit direct export by OEMS) of the
stores referred to in this offer / contract / Purchase order and has not engaged any individual or firm,
whether Indian or Foreign whatsoever, to intercede, facilitate or in any way to recommend to Buyer or
any of its functionaries, whether officially or unofficially, to the award of the contract / purchase order
to the Seller; nor has any amount been paid, promised or intended to be paid to any such individual
or firm in respect of any such intercession, facilitation or recommendation. The Seller agrees that
if it is established at any time to the satisfaction of the Buyer that the present declaration is in any
way incorrect or if at a later stage it is discovered by the Buyer that the Seller has engaged any
such individual / firm, and paid or intended to pay any amount, gift, reward, fees, commission or
consideration to such person, party, firm or institution, whether before or after the signing of this
contract / purchase order, the Seller will be liable to refund that amount to the Buyer. The Seller
will also be debarred from participating in any RFQ / Tender for new projects / program with Buyer
for a minimum period of five years. The Buyer will also have a right to consider cancellation of the
Contract / Purchase order either wholly or in part, without any entitlement or compensation to the
Seller who shall in such event be liable to refund all payments made by the Buyer in terms of the
Contract / Purchase order along with interest at the rate of 2% per annum above LIBOR (London
Inter Bank Offer Rate) (for foreign vendors) and Base Rate of SBI (State Bank of India) plus 2% (for
Indian vendors). The Buyer will also have the right to recover any such amount from any contracts /
Purchase order concluded earlier with Buyer.
Page 278
6. Previous Transgression
6.1 The Bidder /Seller declares that no previous transgressions have occurred in the last three years with
any other company in any country conforming to the anti corruption approach or with any other Public
Sector Enterprise in India that could justify bidder’s/ Sellers’ exclusion from the tender process.
6.2 If the Bidder / Seller makes incorrect statement on this subject, Bidder / Seller can be disqualified
from the tender process or the contract, if already awarded, can be terminated for such reason
without any liability whatsoever on the Buyer.
7. Company Code of Conduct
Bidders / Sellers are also advised to have a company code of conduct (clearly rejecting the use of
bribes and other unethical behavior) and a compliance program for the implementation of the code of
conduct throughout the company.
8. Sanctions for Violation (Disqualification from tender process & exclusion from future contracts
and Criminal charges against violation by Bidders / Sellers)
8.1 If the Bidder(s)/ Seller(s), before award or during execution has committed a transgression through a
violation of Clause 5, above or in any other form such as to put his reliability or credibility in question,
the Buyer is entitled to disqualify the Bidder(s)/ Seller(s) from the tender process or take action as per
the procedure mentioned herein below:
i) To disqualify the Bidder / Seller with the tender process.
ii) To debar the Bidder / Seller from entering into any bid from Buyer for a period of five years.
iii) To immediately cancel the contract, if already signed / awarded without any liability on the Buyer
to compensate the Bidder /Seller for damages, if any. However, any lawful payment due to the
Bidder/Seller for supplies effected till date of termination would be made in normal course.
iv) To encash EMD / Advance Bank Guarantees/ Performance Bonds / Warranty Bonds, etc. which
may have been furnished by the Bidder / Seller to the extent of the undelivered stores.
8.2 If the Buyer obtains knowledge of conduct of a Bidder/ Seller or of an employee or a representative
or an associate of a Bidder / Seller which constitutes corruption, or if the Buyer has substantive
suspicion in this regard, the Buyer will inform to its Chief Vigilance Officer.
9. Compensation for Damages
9.1 If the Buyer has disqualified the Bidder(s) / Seller(s) from the tender process prior to the award
according to Clause 8, the Buyer is entitled to demand and recover the damages equivalent to
Earnest Money Deposit in case of open tendering.
9.2 If the Buyer has terminated the contract according to Clause 8, or if the Buyer is entitled to terminate
the contract according to Clause 8, the Buyer shall be entitled to encash the advance bank guarantee
and performance bond/ warranty bond, if furnished by the Bidder / Seller, in order to recover the
payments, already made by the Buyer for undelivered stores.
Page 279
10. Independent External Monitor(s)
10.1 The Buyer has appointed Independent External Monitors for this Pact in consultation with the Central
Vigilance Commission (Names and Addresses of the Monitors to be given in RFQ).
10.2 As soon as the Integrity Pact is signed, the Buyer shall provide a copy thereof, along with a brief
background of the case to the Independent External Monitors.
10.3 The bidder(s) / seller (s), if they deem it necessary, may furnish any information as relevant to their bid
to the Independent External Monitors.
10.4 If any complaint with regard to violation of the IP is received by the buyer in a procurement case, the
buyer shall refer the complaint to the Independent External Monitors for their comments / enquiry.
10.5 If the Independent External Monitors need to peruse the records of the buyer in connection with the
complaint sent to them by the buyer, the buyer shall make arrangement for such perusal of records
by the Independent External Monitors.
10.6 The report of enquiry, if any, made by the Independent External Monitors shall be submitted to CMD,
HAL for a final and appropriate decision in the matter keeping in view the provision of this pact.
11. Law and Place of Jurisdiction
This pact is subject to Indian Law, The Place of performance and Jurisdiction is Bangalore
12. Other Legal Actions
The actions stipulated in this Integrity Pact are without prejudice to any other legal action that may
follow in accordance with the provisions of the extant law in force relating to any civil or criminal
proceedings.
13 Pact Duration
13.1 This pact begins when both parties have legally signed it. It expires for the successful Bidder / Seller
10 months after the last payment under the contract, and for all other Bidders / Sellers within 6
months from date of placement of order / finalization of contract.
13.2 If any claim is made / lodged during this time, the same shall be binding and continue to be valid
despite the lapse of this pact as specified above, unless it is discharged / determined by CMD, HAL.
13.3 Should one or several provisions of this pact turn out to be invalid, The remainder of this Pact remains
valid. In this case, the parties will strive to come to an agreement to their original intentions.
14. Other Provisions
14.1 Changes and supplements need to be made in writing. Side agreements have not been made.
14.2 In case vendor has already signed any IP with MoD for any of their Contracts, the same shall be
disclosed and shall sign the Integrity Pact in the same format with HAL also.
14.3 In view of the nature of this Pact, this Pact shall not be terminated by any party and will subsist
throughout its stated period.
14.4 Nothing contained in this Pact shall be deemed to assure the Bidder/Seller of any success or otherwise
in the tendering process.
Page 280
15. This Integrity Pact is signed with HAL exclusively and hence shall not be treated as precedence for
signing of IP with MoD or any other Organization.
16. The Parties hereby sign this Integrity Pact at______________on________
BUYER BIDDER / SELLER
Signature: Signature:
Executive Director/General Manager

Chief Executive Officer
Hindustan Aeronautics Ltd.,
…………………………Division
Date: Date:
Stamp: Stamp:
Witness Witness
1._____________________ 1.__________________
2._____________________ 2.__________________
(Note: All pages to be initialed by Buyer and Bidder/Seller)
Page 281
ANNEXURE - 25
PURCHASE ORDER RETURNS FOR THE MONTH OF ………….. 20
Sl. Mode of Project/ Payment Payment Due
Division Purchase Order Details Planning Data
No Tendering Nonproject Terms MM/YY
Material Delivery Reqd. Reqd. for
DoP Description Value in INR Category
PO No Date Group Value in FE Supplier/Vendor Due for Production
Reference of Item (Rs.in Lakhs) of Vendor
Code MM/YY Project Year
Name &
Currency Value Country
Address
Page 282
Code
Manufacturing Task Repair & Overhaul Task Upgrade Programs Trade of Tendering Category of Vendor
Material Type Code Material Type Code Material Type Code Type of Tender Code Category Code
Limited Tender Out-
Raw Materials 11 Raw Materials 21 Raw Materials 31 (Competitive LT sourcing (including 1
Tendering) Sub-Contracting)
Customer Nominated
Consumables 12 Consumables 22 Consumables 32 CN Foreign 1(a)
(including OEM)
Licensor / License
BOI / BOF / LRU 13 BOI / BOF / LRU 23 BOI / BOF / LRU 33 LA Indian 1(b)
Agreement
Standard Parts 14 Standard Parts 24 Standard Parts 34 Joint Venture JV Prop. 2
Tools & Test Equipment (Specific Tools & Test Equipment (Specific Tools & Test Equipment (Specific Proprietary Tender PT Foreign 2(a)
15 25 35
to Project & part of DRE) to Project & part of DRE) to Project & part of DRE) Single Tender ST Indian 2(b)
GSE/GHE/SACL GSE/GHE/SACL GSE/GHE/SACL Open Tender
(forming part of end 16 (forming part of end 26 (forming part of end 36 (including Global OT HAL-JV 3
delivery) delivery) delivery) Tender)
MSME 4
Govt./PSU 5
Others 6
ANNEXURE - 26
FORMAT FOR PURCHASE PROGRESSION
Code
Purchase Order Vendor Revised
Type of Material Payment Delivery Date
Sl. No. Order ack Reminder Delivery Despatch Payment
Full Country Vendor Group Terms Due Date of Remarks
No No. Date of Value Date Date Date mm/ Date Details
Name Code Code Code Code mm/yy Receipt
Items yy
Page 283
ANNEXURE - 27
Compliance Reference of CVC’s Circulars
Sl. CVC Circular Office Purchase Manual

File No. Date of Issue Subject Remarks
No. Sl.No Order No. Reference
Covered under MARKET

Banning of EXPLORATION AND SOURCE
Para 3.13.3 and
1 36 18‐03‐2005 000/VGL/161 24‐03‐2005 business dealing SELECTION
para 3.13.8
with firms (Banning of Business Dealings with

Firms)
Prequalification Covered under vendor registration Para 3.2 & 3.3 &
2 3 No 12-02-1-CTE-6 17.12.2002
criteria (PQ). and Tender evaluation Para 7.10
Pre‐qualification Covered under vendor registration Para 3.2, 3.3 &
3 2 No 12-02-1-CTE-6 07.05.2002
Criteria (PQ). and Tender evaluation Para 7.10
Covered under PURCHASE

Transparency in
ENQUIRY AND SELECTION OF
4 78 19‐05‐2010 005/CRD/019 19‐05‐2010 works/purchase/ Para 5.9.5
Page 284
APPROPRIATE PURCHASE MODE
consultancy
(Single Tender (Nomination basis)
Transparency in
Works/Purchase/
Consultancy Covered under DoP and PURCHASE
contracts ENQUIRY AND SELECTION OF
5 55 23‐07‐2007 005/CRD/19 05‐07‐2007 Para 5.9.5
awarded on APPROPRIATE PURCHASE MODE
nomination basis (Single Tender /Nomination basis)
(Office Order No
23‐7‐07)
Transparency Covered under DoP and PURCHASE

in Contracts ENQUIRY AND SELECTION OF
6 47 15‐05‐2006 005/CRD/19 09‐05‐2006 Para 5.9.5
awarded on APPROPRIATE PURCHASE MODE
Nomination Basis (Single Tender /Nomination basis)
Increasing Covered under Purchase enquiry and
7 23 10/2/2004 98/ORD/1 11.02.2004 transparency selection of appropriate purchase Para 5.4.1
(Tender process) mode (Open Tender)
Increasing Covered under Purchase enquiry and
8 22 9/2/2004 98/ORD/1 09.02.2004 transparency selection of appropriate purchase Para 5.4.1
(Sale) mode (Open Tender)
Improving
Vigilance
Administration: Covered under Purchase enquiry and
9 21 ----- 98/ORD/1 18.12.2003 Increasing selection of appropriate purchase Para 5.4.1

Transparency in mode (Open Tender)
Procurement/
Sale etc.
Improving
vigilance Covered under PURCHASE Para 5.15,Format
10 54 13‐04‐2007 006/VGL/117 13‐06‐2007 administration ENQUIRY AND SELECTION OF as per
by leveraging APPROPRIATE PURCHASE MODE Reference-3
technology
Covered under PURCHASE
Use of products
ENQUIRY AND SELECTION OF
Page 285
11 53 14‐04‐2007 98/VGL/25 with standard Para 5.2 l(c)
APPROPRIATE PURCHASE MODE
Specifications
(Specifications)
Commission’s
Covered under Purchase enquiry and
Directives on
12 29 47/7/04 98/ORD/1 13.07.2004 selection of appropriate purchase Para 5.4.1
use of Website in
mode (Open Tender)
Public Tenders
Covered under E-procurement and

Improving Para 5.4.1,
Purchase enquiry and selection of
13 28 43/7/04 98/ord/1 02.07.2004 Vigilance Chapter XXII
appropriate purchase mode (Open
Administration: Section-1
Tender)

Tender sample Para 5.2 section
14 19 ----- 2EE-1-CTE-3 15.10.2003 selection of appropriate purchase
Clause I(e)
mode (purchase specification)
Irregularities in
selection of appropriate purchase Para 5.2 & Para
15 17 44/9/03 98/ORD/1 04.09.2003 the award of
mode (purchase specification and 6.8
contracts
Purchase without tendering)

Short‐comings in Para 5.2 & Para
16 16 33/7/03 98/ORD/1 09.07.2003 selection of appropriate purchase
bid documents 5.5
mode(purchase specification)
Use of web‐
Para 5.4.1
site in Govt.
17 14 ----- 98/ORD/1(Pt.IV) 12.03.2003 Covered under Modes of Tendering (a),5.4.1(d) & para
procurement or
5.4.7
tender process
Posting of details
on award of Para 5.15,
18 71 17‐07‐2009 005/VGL/4 14‐07‐2009 selection of appropriate purchase
tenders/contracts Reference 3A
mode
on websites
Posting of details
Superceded by circular dtd:17.07.09.
on award of
Page 286
Covered under Purchase enquiry and Para 5.15,
19 48 31/09/06 005/vgl/004 01‐09‐2006 tenders/contracts
selection of appropriate purchase Reference 3A
on websites/
mode References
bulletins
Supereceded by circular
dtd:17.07.09.Covered under
Details on award Para 5.15,
20 42 57/09/05 005/VGL/4 20‐09‐2005 Purchase enquiry and selection
of tender Reference 3A
of appropriate purchase mod
References
Details on award
dtd:17.07.09.Covered under
of tenders/ Para 5.15,
21 41 46/07/05 005/VGL/4 28‐07‐2005 Purchase enquiry and selection
contracts Reference 3A
of appropriate purchase mod
Publishing
References
Details on award dtd:17.07.09.Covered under
Para 5.15,
22 37 13‐03‐2005 005/VGL/4 16‐03‐2005 of tenders/ Purchase enquiry and selection
Reference 3A
contracts... of appropriate purchase mod
References
Covered under tender receipt,

Transparency in
23 83 01‐02‐2011 011/VGL/014 01‐02‐2011 opening and evaluation (Tender Para 7.10.1(b)
Tendering System
Evaluation of Capital Equipment)
Transparency
in tendering
24 32 72/12/04 004/ORD/9 10.12.04 system‐ Para 7.3.6
opening and evaluation (tender box)
Guidelines
regarding
Tendering
Process Para 7.17.1 and
25 80 01‐01‐2010 005/CRD/012 20‐01‐2010 opening and evaluation
Negotiations with 7.17.2
(Negotiations)
L1
Page 287
Time bound Covered under Tender Receipt, Para 7.15 &
26 67 31/11/08 008/VGL/083 06‐11‐2008 processing of Opening and Evaluation (Validity Para 7.19 and
procurement Extension) Annexure 18
Tendering
Covered under tender receipt, Para 7.17.1 and
process ‐
27 51 04‐03‐2007 005/CRD/12 03‐03‐2007 opening and evaluation 7.17.2, para
negotiations with
(Negotiations) 7.18.1 (f)
L‐1
Tendering
Process Para 7.19,
28 43 68/10/05 005/CRD/12 25‐10‐2005 opening and evaluation
negotiation with Annexure -18
(Negotiations)
L‐1
Improving
Vigilance
29 9 ----- 8(1)(h)/98(1) 18.11.1998 opening and evaluation Para 7.17.1
Administration
(Negotiations)
(L1) (L1)
Improving
Vigilance
30 11 ----- 98/ORD/1 24.08.2000 opening and evaluation (Re- Para 7.18.1(f)
Administration‐
tendering)
Tenders
Improving
vigilance
31 7 No.98/ORD/1 15.03.1999 opening and evaluation (Quantity Para 7.14.5, 7.16
administration‐
distribution)
Tenders
Undertaking
Covered under TENDER RECEIPT,
by Members
32 45 71/12/05 005/VGL/66 09‐12‐2005 OPENING AND EVALUATION Para 7.3.8

of Tender
(Opening of Tender)
Committee
Covered under TENDER RECEIPT,

Notice inviting
33 35 15‐03‐2005 OFF‐1‐CTE‐1(Pt)V 24‐03‐2005 OPENING AND EVALUATION Para 7.9.11
tenders
(Tender Evaluation)
Receipt and
34 26 ----- 05-04-1-CTE-8 08.06.2004 Opening of Para 7.2.1 & 7.2.4
opening and evaluation (tender box)
Tenders
Page 288
HAL does not deal with agents.
Same is covered under purchase
12‐02‐6‐CTE- Consideration of
35 88 03‐01‐2012 13‐01‐2012 proposal, order and order Para 8.8.7.5
SPI(1) Indian Agents
amendments (Advance Payment
(Non-Involvement of Indian Agents)

12‐02‐6‐ Consideration of
36 25 25‐04‐2004 21.04.2004 proposal, order and order Para 8.8.7.5
CTESPI(1)2 Indian Agents
12‐02‐6‐ Consideration of
37 13 ‐‐‐‐‐ 07.01.2003 proposal, order and order Para 8.8.7.5
CTESPI(1)2 Indian Agents
Adoption
of Integrity
Para 8.8.10,
38 70 10‐05‐2009 008/CRD/013 18‐05‐2009 Pact‐Standard Covered under IP format
Annexure 24
Operating
Procedure‐reg‐
Adoption
of Integrity Covered under purchase proposal,
39 66 24‐08‐2008 007/VGL/033 05‐08‐2008 Pact in major order and order amendments Para 8.8.10
Government (Integrity Pact)
procurement
Adoption of
Integrity Pact Covered under purchase proposal,
40 58 41/12/07 007/VGL/033 04‐12‐2007 in major Govt. order and order amendments Para 8.8.10
Procurement (Integrity Pact)
Page 289
Activities
Modified Integrity Para 8.8.10,
41 57 Covered under HAL IP
Pact Annexure 24
Covered under purchase proposal,

Mobilisation
42 61 05‐02‐2008 4CC‐1‐CTE‐2 05‐02‐2008 order and order amendments Para 8.8.3.10
advance
(Advance Payment)
Covered under purchase proposal, Para 8.8.3.

Mobilization
43 52 10‐04‐2007 4CC‐1‐CTE‐2 10‐04‐2007 order and order amendments points 8.8.3.1 to
advance
(Advance Payment) 8.8.3.11,
Covered under purchase proposal, Para 8.8.3.1,

Mobilization
44 27 ----- 4CC-1-CTE-2 08.06.2004 order and order amendments 8.8.3.7, 8.8.3.8,
Advance
(Advance Payment) 8.8.3.9
Grant of interest Covered under purchase proposal, Para 8.8.3.1,
45 8 No.UU/POL/19 08.10.1997 free mobilization order and order amendments 8.8.3.7, 8.8.3.8,
advance. (Advance Payment) 8.8.3.9
Purchase of
Computers Covered under purchase enquiry and
46 15 ----- 98/ORD/1 05.05.2003 by Govt selection of appropriate purchase Para 5.2 (I) d
.Departments/ mode.
Organisations
Improving
vigilance Para 22.4,

Covered under e-procurement and
47 50 40/11/06 006/VGL/117 22‐11‐2006 administration 5.4.1(a), 3.2,
mode of tendering
by leveraging 3.3(a)
technology
Leveraging
Covered under GENERAL TERMS &
Technology ‐ e‐ Para 8.8,
48 30 68/10/04 98/ORD/1 20.10.2004 CONDITIONS OF CONTRACT
payment and Annexure23A
(payment of Stores)
e-receipt
Cutting Delays
Page 290
by e‐payments Covered under GENERAL TERMS &
Para 8.8,
49 24 20-04-2004 98/ORD/1 06.04.2004 and e‐receipt CONDITIONS OF CONTRACT
Annexure23A
by Govt. (payment of Stores)
Organisations
Tendering
process – Covered under INTERPRETATION OF
50 49 37/10/06 005/crd/012 03‐10‐2006 Para 18.2.1
negotiation PURCHASE PROCEDURES
with L1.
Guidelines on
Covered under E-procurement
51 89 01‐01‐2012 010/VGL/035 12‐01‐2012 e-Procurement
Systems
Linked Document
Implementation
52 76 18‐04‐2010 009/VGL/002 26‐04‐2010 Covered in E-procurement Systems
of e‐tendering
Implementation
Chapter XXII
53 73 29‐09‐2009 009/VGL/002 17‐09‐2009 of e‐tendering Covered in E-procurement
section 1
solutions....
E‐procurement/ Chapter XXII
54 18 46/9/03 98/ORD/1 11.09.2003 Covered in E-procurement
Reverse Auction section V
Intensive
Examination of
works by CTE’s
MIS information being provided
55 1 No. 98/VGL/25 16.05.2005 Organization‐
separately
Submission
of Quarterly
Progress Report
Intensive
Examination of MIS information being provided
56 44 98/VGL/25 10‐11‐2005
works by CTE’s separately
Organisation
Appointment of Covered vide Personnel circular no.
57 4 No. 3L – IRC 1 10.01.1983
Consultants. 685 dtd 04.02.2010
Irregularities/
lapses
observed in the
construction Covered vide Personnel circular no.
58 5 No.3L PRC 1 12.11.1982
works undertaken 685 dtd 04.02.2010
by Public sector
undertakings/
banks.
Page 291
Appointment of Covered vide Personnel circular no.
59 6 No.OFF1 CTE1 25.11.2002
Consultants 685 dtd 04.02.2010
Applicability of
CVC’s instruction
No.8(1)(h)/98(1)
dated 18/11/98
on post-tender
Related to World Bank Projects and
60 10 ----- 3(v)/99/9 01.10.1999 negotiations
International Funding
to Projects
of the World
Bank & other
international
funding agencies
Improving
Vigilance
61 12 ----- 98/ORD/1 03.08.2001 Related to tender for sale
Administration‐
Tenders (H1)
Back to back tie
62 20 ----- 06-03-02-CTE-34 20.10.2003 Related to works
up by PSUs
Specific for turnkey projects.
Turnkey contracts
Specification in general is
for net‐working
63 31 69/11/04 004/ORD/8 03.11.2004 covered. This circulars to be used Para-5.2(I)
of Computer
as additional reference while
Systems
procurement turnkey project.
Participation of
Covered vide Personnel circular no.
64 33 98/DSP/3 24-12-2004 consultants in
685 dtd 04.02.2010
tender
Common
irregularities/
General Instructions on Purchase
65 56 lapses observed
Procedure
in stores/
purchase …
Acceptance Covered under separate circular

66 60 01‐01‐2008 02‐07‐01‐CTE‐30 31‐12‐2007 of Bank issued by Finance ref.no. HAL/FIN/ Reference 5
guarantees... BG/2012-13 dtd: Oct10,2012
Specific for IT products.
Page 292
Specification in general is covered.
Measures to curb
67 62 07‐02‐2008 007/CRD/008 15‐02‐2008 This circular to be used as additional Para-5.2(I)
the menace of
reference while procuring IT
products.
ANNEXURE - 28
DISCOUNTED CASH FLOW METHOD
1. Evaluation of bids by DCF technique (Note – This clause is be included only if there is different cash
outflows in successive years)
1.1. Net Present Value (NPV) is a variant of DCF method, which will be used by the Buyer for evaluation
of Bids. The Net Present Value of a Bid will be equal to the sum of the present values of all the
cash flows associated with it. The following formula will be used for calculating NPV of a bid -
n
NPVn = Σ At/(1+r)t
t=0
Where,
NPV = Net Present Value
At = Expected cash flow occurring in year ‘t’ as mentioned in the Payment schedule of Bid
n = Duration of cash flow stream
r = Discounting Rate
t = The period after which payment is done
The bid with the lowest NPV would be selected.
1.2. The Discounting rate will be ---%”. (Note-This will be State Bank of India Prime Lending Rate
(PLR) at the beginning of the bid opening month).
1.3. Structuring Cash Flows for Tenders/ Bids Received in the Same Currency – The cash outflows as
shown in price bids will be taken into consideration. NPV of different bids will be calculated using
the formula given above and the one having lowest NPV will be selected as L-1.
1.4. Structuring Cash Flows for Tenders/ Bids Received in Different Currencies - Where bids are
received in different currencies/combination of currencies, the cash outflow will be brought to a
common denomination in rupees by converting foreign currency bids into rupees as defined in
para 7.9.9 (XIV) on Commercial Evaluation of the Purchase Manual. Thereafter, the procedure as
described above in Para 1.3 will be applied to arrive at NPV.
1.5. All bidders are required to indicate year-wise and currency-wise amount required as per their
price bid in format given below. In case a bidder does not provide year-wise cash flow details in
price bid, the amount quoted in their price bid will not be discounted for comparison purposes.
Year Dollars Euros Pound Sterlings Rupees Total Cash-Flow
Page 293
ANNEXURE - 29
LETTER OF INTENT
Dear sir/s,
We refer to,
Our tender no. : dtd;
and
Your quotation no. : dtd:
This letter is to advise you that it is our intention to place an order on you for supply of items/
service as mentioned below :
Item/Service :
Specification/Detail :
Quantity required :
Price/Cost per unit :
Total Price/Cost (including Taxes) :
Delivery Term :
i) Ex-works / F.O.R(HAL__________________ Division)
ii) Delivery date :
Payment Method :
Purchase Order will follow in due course of time.
Authorised Signatory: _______________
(IMM)
Page 294
ANNEXURE_A
Project Name: e-Procurement
Form No: Name of The Form : User information Sheet
Division Name:
Location :
Department Name:
Head of the Division:
Whether
Sub-Division If Yes, select e-Tender Roles
Name of Department / Digital Remarks,

Sl.No. Designation e-mail Id / Section / type of (refer activities
officials PB No Signature if any
Group, if any certificate table to your right)
available
1
2
3
Coordinating officers of Finance during Tender Opening (Tender Opening Committee member)
Whether
Sub-Division If Yes, select e-Tender Roles
Name of Department / Digital Remarks,
Sl.No. Designation e-mail Id / Section / type of (refer activities
Page 295
officials PB No Signature if any
Group, if any certificate table to your right)
available
1
2
3
Coordinating officers of Methods during Tender Opening (Tender Opening Committee member)
Whether e-Tender Roles
Sub-Division If Yes, select
Name of Department / Digital (refer Remarks,
Sl.No. Designation e-mail Id / Section / type of
officials PB No Signature activities table to if any
Group, if any certificate
available your right)
1
2
3
Activities Table
Role Name Activities
Create Tender, Upload Documents, Vendor Selection (for Limited ten-
Tender Initiator der only), Tender details Modification, Tender Document authorization
level 1 and tender Authorize Level 1, Create corrigendum.
Create Tender, Upload Documents, Vendor Selection (for Limited
Tender Authorization tender only) and Tender Document Authorization 2, Authorize tender 2
(final), corrigendum Authorization, Qualify / Disqualify vendors.
Tender opening Level 1 Note: this person DSC is used for encryption
Tender opening Authority
so this person should have mandatorily Signing & encryption DSC.
Tender Opening Committee
Tender opening Level 2, Form Fee & EMD Authorization.
member- Finance
Page 296
REFERENCE - 1
LIST OF RECORDS/DOCUMENTS TO BE RETAINED
AND THE PERIOD OF THEIR RETENTION
Sl.
NATURE OF RECORD PERIOD OF RETENTION
No.
Files relating to policy matters, contracts, Licence Agreements, replies
to the Questionnaires issued by the recommendations of the Committee
1. Permanent
on Public Sector Undertakings. Administrative Reforms Commissions,
National Commission on Labour and Parliamentary Committees.
2. Stock registers, stock reports, stock journals and ledgers Twelve Years
Until Audit check is com-
3. Copies of Telegrams and Overtime request pleted and six months
thereafter.
4. Files, Registers, Issue Registers, Receipt Registers Three Years
Periodical Returns to Government and Reports under the Management
5. Three Years
Reporting system
Spare Copies of correspondence and telex messages etc., attendance
6. One Year
registers, delivery books and other routine Registers.
7. Stock-taking note-rough sheets (Stock Verification Notes). Eight Years.
8. Timber Statements Two Years
9. Requisitions(Material Requisitions) Twelve Years
10. A.R.M.(Stores Credits) Twelve Years
11. HAL Way Bills Twelve Years
12. Statement showing the disposal to salvage stores Twelve Years
13. Auction Sale Lists Twelve Years
14. Ordinary correspondence Five Years
15. Personal cases of Contractors (Stores) Ten Years
16. Receiving Reports Twelve Years
17. Circulation Memoranda One Year
18. Correspondence regarding supply of stationery One Year
19. Forwarding memos, reminders and acknowledgements One Year
20. Register of sale accounts including correspondence of customers Twelve Years
21. Register of sale vouchers Twelve Years
22. Gate, Leave and Material Passes Five Years
Page 297
23. Purchase Orders and connected correspondence/records Twelve Years

Twelve Years or till final
24. Sales orders and connected correspondence/records
claims are settled
25. Register of approved vendors Permanent
26. M.P.R. Registers Three Years
27. Tender Registers Three Years

Register maintained in Mail Receipt and Dispatching Branch of
28. One Year
purchasing Department for receipt and disposal of Bank Advices
29. M.P.R./indent Files Three Years
30. I.S.M. Contract Files Three Years
31. Tender Committee and material Purchase Three Years
32. Purchase Order Master Files One Year
33. IAF Records(Receiving Department) Five Years
34. Overseas P.Os and Contracts in Receipt Department Three Years
35. Local P.O.s after completion One Year
36. Bills of Entry Five Years

Till settlement in full final
37. Records pertaining to HAL’s claims outstanding payments
claims
38. CVC-1, CVC-2,CVC-3 Registers of furnishing returns to M of D Permanent
39. Telephone Call Entry Register One Year
40. Material Gate Pass Register Five Years
41. Material Gate Pass sent to ‘M’ Five Years
42. Visitors Register Five Years
43. Railway Empty Wagon Register One Year
44. Key Register Five Years
45. Inventory Register Permanent
Note: Number of years for retention to be reckoned from the date on which last action on the respective files
has been/completed. The periods mentioned above are subjected to change as per statutory regulations/
orders issued by govt/management from time to time respectively.
Page 298
Page 299
Sl. NO.
Tender Ref. No. & date
Vendor details
Mode (DD /
Cheque, BG with
Bank details, etc)
Instruments No. &
Date
Amount
Details of EMD submitted
Validity
Reference of intimation
forwarded to Finance for
refund of EMD (letter no. &
date)
Mode (DD /
Cheque, etc)
Instruments No. &
Date
RETURN OF EARNEST MONEY DEPOSIT (EMD) RECEIVED AGAINST OPEN TENDER.
Detail of EMD refunded
Amount
Remarks
REFERENCE - 2
REFERENCE - 3
Format – 1(A)
Summary of Enquiries Released during a Month (Rs. 10 Lakhs and above)
Division Complex Month & year
General Last date for

Enquiry No. Mode of Number of Whether
Sl. No. Description submission of Remarks
and Date Enquiry * items Single / Two Bid

of item (s) offers
1
2
3
4
5
*Open / Limited Enquiry
Page 300
REFERENCE - 3 A
Format – 3(A)
Summary of Purchase Orders Released during a Month

Value of
Purchase General Name of
Enquiry No. Basis for Purchase Scheduled
Sl. No. Order No. No. of items Description Supplier / Remarks

and Date ordering * order Delivery Date
and Date of item (s) Vendor
(Rs. Lakhs)
1
2
3
4
5
*L1 / Technically Acceptable (Single Party)
Page 301
REFERENCE - 3 B
Format – 5(A)
Summary of Payments made during a month - Against Purchase Orders
Purchase Order Details No. of items Invoice Details (Rs.) Amount Paid Remarks /
Reasons for
Recd up to
Accepted Recd during Non-payment
Sl. No. No. & Date Value Involved beginning of During Month Cumulative
(Cum) the month of balance
the month
Amount
Page 302
REFERENCE - 4
Sample Templates (PRICE BID FORMAT)
Commercial Bid
Tender No:
PRICE SHEET FORMAT
A) Cost of Equipment including warranty period of 12 months :

CURRENCY OF QUOTE :
Sl No. Description
Qty Unit of Meas. Unit Rate Delivery Schedule Total Amount Remark
A1.1 Basic Equipment
A1.2 Standard Accessories
Mandatory Spares/ Spares of
consumable nature not covered
A1.3 under warranty BUT required for
normal operation of equipment
during the warranty period
Taxes & Duties on (A1.1 + A1.2
Page 303
+ A1.3)
A1.4
(every tax elements to be shown
separately)
Sub-Total A1(= A1.1 +A1. 2 +
A1
A1.3 + A1.4)
A2.1 Erection & Commissioning
Service Taxes & Duties on (A2.1)
A2.2 (every tax elements to be shown
separately)
A2 Sub-Total A2(=A2.1 + A2.2)
A3.1 Training (if not Free of Cost)
A3.2 Taxes & Duties on A3.1
A3.3 Freight, if any
A3.4 Packing Charge, if any
A3.5 Forwarding Charge, if any
Sub-Total A3(=A3.1 + A3.2+ A
A3
3.3+A3.4+A3.5)
A4 Total Cost (A = A1 + A2 + A3)
B) Cost of CAMC for 04 years after expiry of Warranty period (if applicable):
CURRENCY OF QUOTE:
Sl No. Description 1st year 2nd Year 3rd Year 4th Year Total Amount REMARK
Rate Rate Rate Rate
CAMC including spares cov-
B1.1 ered under this
B1.2 Taxes & Duties on CAMC - Services
B1.3 Taxes & Duties on CAMC - Spares

B1 Sub-Total B1(= B1.1 +B1. 2 + B1.3)

Mandatory Spares/ Spares

of consumable nature not
B2.1 covered under CAMC BUT
required for normal operation
Taxes & Duties on Mandatory
B2.2 Spares
B2 Sub-Total B2(= B2.1 +B2. 2)

B3 Sub-Total (B = B1 + B2)

C) Total Cost = (A + B)

Page 304
TO BE WORKED OUT BY HAL (only for internal use - not be part of the tender document)
LOADING FACTORS
D) (Please refer attached
sheet for loading factors).
D1 DT FACTOR
D2 PT FACTOR
D3 DL FACTOR
D4 LD FACTOR
D5 SD FACTOR
D6 WA FACTOR
TOTAL FACTOR
D7
(D1+D2+D3+D4+D5+D6)
LANDED COST TO HAL
E
(C+D)
Notes:
1. ADDITIONAL SHEET may be used for giving detailed break-up for taxes, spares, accessories etc.
Loading Factors Details
(If required for evaluation appropriately to be included in the tender documents)
PROPOSED FACTORS FOR LOADING IN COMPARATIVE PRICE STATEMENT
ITEM WEIGHTAGE AMOUNT TO BE ADDED ON BASIC PRICE REMARK

FACTOR
BASIC PRICE ACTUALS
(DT FACTOR) ACTUALS Q* a/100+ Q*0.5/100+ a % OF QUOTED PRICE
DELIVERY TERM(FOR HAL) Q* a/100=0.03*Q Q*1.5/100+Q*1.5/100=0.045 *Q CONSIDERED AS PACKING
CHARGE. FACTOR TO BE
(EX-WORKS (INLAND) QUOTED (EX-WORKS (FOREIGN) REDUCED IF PACKING IS

WITHOUT PACKING) QUOTED WITHOUT PACKING) QUOTED
(PT FACTOR) 2% ((X/100)*Q*R/12)*0.02 ((X/100)*Q*R/12)*0.02+ (%BC [(Y/100)*Q*((R+2)/12)*T]*
PAYMENT TERM OR LC/100*(X/100)*Q .02+((X/100)*Q*R/12)*0.02+
100% WITHIN 30 DAYS OF RECEIPT (X% AGAINST DELIVERY) (%BC OR LC)/100*((X+Y)/100)*Q
AND ACCEPTANCE OF MATERIAL (X% AGAINST DELIVERY (Y% ADVANCE+ X%AGAISNT
THROUGH BANK/LC/SIGHT DELIVERY)
DRAFT)
(DL FACTOR) 1% Q*(TQ-TR)*0.01/12
DELIVERY LEAD TIME
(AS PER RFQ)
(L.D. FACTOR) 2% 0.02(10- L)*Q/10
(L.D. @ 0.5% PER WEEK OF DELAY
Page 305
MAXIMUM UPTO 10% OF PO VALUE)
(SD FACTOR) 5% of quoted 5% OF QUOTED VALUE
SBG (5% OF PO VALUE VALID UPTO 60 value (SBG NOT AGREED)
DAYS FROM LAST DELIVERY)
WA FACTOR (WARRANTY) 2% 0.02*Q*(WR-WO)/12
Abbreviations
QUOTED PRICE Q Note:
PLR/LIBOR PER ANNUM R 1) MONTHLY PLR/ LIBOR RATE TO BE CONFIRMED BY DIVISIONAL
FINANCE.
AMOUNT TO BE PAID AGAINST X
DELIVERY 2). BANK CHARGES/LC CHARGES TO BE CONFIRMED BY DIVISIONAL
AMOUNT TO PAID IN ADVANCE Y FINANCE.
DELIVERY TIME IN MONTHS AS PER PO T
MAXIMUM RATE OF LD AGREED L
DELIVERY REQUIRED AS PER RFQ TR
DELIVERY QUOTED TQ
WARRANTY IN MONTHS AS PER RFQ WR
WARRANTY OFFERED IN MONTHS WQ
% BANK CHARGES BC
% LC CHARGES LC
REFERENCE - 5
Material Management Circulars / Guidelines
Circular No. /
Si.No. Reference No. and date Description
Guidelines
Material CD/957/455 Inventory Accounting and Reporting

1 Management
dated 20th February 1991
Circular No.1
CD/957/466 Inventory Control Instructions for Implementation
of Materials Management Circular No.1 dated
2 dated 21st February 1991
20th February 1991 on Inventory Accounting and
Reporting in Accessories Complex Divisions.
dated 22nd February 1991
3. 20th February 1991 on Inventory Accounting and
Reporting in MiG Complex Divisions / Soviet Projects
of Accessories Complex.
4. dated 23rd February 1991
20th February 1991 on Inventory Accounting and
Reporting in Bangalore Complex Divisions.
Material CD/1111/643 Guidelines for Completing single shot at a Glance –

5 Management Monthly Inventory Report.
dated 22nd April 1991
Circular No.2
Material CD/617/96/03 Arbitration Clause in Commercial Contracts.
6 Management
Dated 04 May 1996
Circular No.13
Material AGM(SYA)/GENL/13/2000-01/100 Bank Charges
7 Management
Dated 10th January 2001
Circular No.17
Material SYA/GENL/006/227 Inventory Management – Monitoring / Accounting of
8 Management Receiving Reports (RRs) / Material Requisitions (MRs)
Dated 27th December 1999
Circular No.18
HAL/CD/499/2005 Advance Payment – Bank Guarantee
9
Dated 19th Oct 2005
HAL/CD/617/2007 Signing of Custom Duty Exemption Certificate.

(Under Notification 39/96 dtd. 23rd July 1996).
Dated 21st April 2007 and
Letter No.HAL/CD/508/2011
10
dtd. 10thJanuay 2011
Letter NO.HAL/CD/617 (DEC)/2012
Dtd. 11th Oct 2012
Page 306
HAL/CD/951/2008 Cost Reduction by effective Inventory Control

11
Dated 7th May 2008
HAL/CD/616(F)/2008 Acceptance of Quotations Through Fax/E-mail etc.

12
Dated 10th November 2008
No.HAL/CD/617(single Purchase contracts awarded on nomination/single

tender)/2012 tender basis - Reporting to the Board for information
13
Dt. 07 February 2012
No. HAL/CD/617 (Advance Advance payment
Payment)/2010
Dated 05 May 2010,
Amendments on :
14
Dated 03 Aug 2010
Dated 30 Jun 2010
Dated 14 May 2010
Dated 01 Sept 2010
Issue of Revised HAL/FIN/BG/2012-13 Guidelines on Bank Guarantees

15 Bank Guarantee
Dt. 19.10.2012
format
Page 307
REFERENCE - 6
Reference Web sites for Custom Notifications,
Exchange Rates, Labour and Material Indices etc
http://www.cbec.gov.in/ Customs Deptt
http://www.cbec.gov.in/cae/custo Customs Acts
http://www.cbec.gov.in/cae/customs/cs-tariff/cst-note.htm Customs Tariff
http://www.cbec.gov.in/cae/customs/forms_pdf/forms_idx_final.htm Customs Forms (BE etc)
http://www.cbec.gov.in/cae/customs/cs-notfns-main.htm Customs Notifications
http://www.cbec.gov.in/cae/customs/cs-manual/manual_idx.htm Customs Manual
http://www.statistics.gov.uk/statbase/Product.asp?vlnk=2207&More=N Price indices in UK
USA, Bureau of Labor Sta-

http://www.bls.gov/home.htm
tistics Data
http://www.bls.gov/ppi/ USA, Producer Price In-
dexes
http://www.insee.fr/en/home/home_page.asp
French Indices
http://europa.eu.int/comm/eurostat/Public/datashop/print-catalogue/
EN?catalogue=Eurostat Euro Statistics
http://www.wadaviation.com/index.html World Aviation Directory and

Buyer’s Guide
Worldwide business pur-
http://www.kompass.com/
chasing and marketing
directory
Inventory Locater Service
www.ilsmart.com (id: ay6zu01 Pwd: csrfay6z)
(subscription necessary)
Search by part number,
www.partsbase.com (id: nmyadav Pwd: nmyadav)
NSN, NIIN and keyword
http://www.iccwbo.org/home/menu_incoterms.asp INCOTERMS
http://cvc.nic.in/rajins.htm
CVC Instructions
http://www.dti.gov.uk/exportcontrol
UK Export Control
www.hmce.gov.uk for UK Customs & Excise

Tariff
Defence Procurement Pro-
http://mod.nic.in
cedure
Page 308
REFERENCE - 7
LIST OF ITEMS RESERVED FOR PURCHASE FROM SMALL SCALE INDUSTRIAL
UNITS INCLUDING HANDICRAFT SECTOR
1. AAC/and ACSR Conductor up to 19 strands.
2. Agricultural Implements a) Hand Operated tools and implements b) Animal driven implements
3. Air/Room Coolers
4. Aluminum builder’s hardware
5. Ambulance stretcher
6. Ammeters/ohm meter/Volt meter (Electro magnetic up to Class 1 accuracy)
7. Anklets Web Khaki
8. Augur (Carpenters)
9. Automobile Head Lights Assembly
10. Badges cloth embroidered and metals
11. Bags of all types i.e. made of leather, cotton, canvas and jute etc, including kit bags, mail bags,
sleeping bags and water-proof bag.
12. Bandage cloth
13. Barbed Wire
14. Basket cane (Procurement can also be made from State Forest Corpn. And State Handicrafts
Corporation)
15. Bath tubs
16. Battery Charger
17. Battery Eliminator
18. Beam Scales (up to 1.5 tons)
19. Belt leather and straps
20. Bench Vices
21. Bituminous Paints
22. Blotting Paper
23. Bolts and Nuts
24. Bolts Sliding
25. Bone Meal
26. Boot Polish
27. Boots and Shoes of all types including canvas shoes
Page 309
28. Bowls
29. Boxes Leather
30. Boxes made of metal
31. Braces
32. Brackets other than those used in Railways
33. Brass Wire
34. Brief Cases (other than moulded luggage)
35. Brooms
36. Brushes of all types
37. Buckets of all types
38. Button of all types
39. Candle Wax Carriage
40. Cane Valves/stock valves (for water fittings only)
41. Cans metallic (for milk and measuring)
42. Canvas Products: a) Water Proof Deliver, Bags to spec. No. IS-1422/70 b) Bonnet Covers and
Radiators Muff. To spec. Drg. Lv7/NSN/IA/130295
43. Capes Cotton and Woolen
44. Capes Waterproof
45. Castor Oil
46. Ceiling roses up to 15 amps
47. Centrifugal steel plate blowers
48. Centrifugal Pumps suction and delivery 150 mm x 150 mm
49. Chaff Cutter Blade
50. Chains lashing
51. Chappals and sandals
52. Chamois Leather
53. Chokes for light fitting
54. Chrome Tanned leather (Semi-finished Buffalo and Cow)
55. Circlips
56. Claw Bars and wires
57. Cleaning Powder
Page 310
58. Clinical Thermometers
59. Cloth Covers
60. Cloth Jaconet
61. Cloth Sponge
62. Coir fibre and Coir yarn
63. Coir mattress cushions and matting
64. Coir rope hawserlaid
65. Community Radio Receivers
66. Conduit pipes
67. Copper nail
68. Copper Naphtenate
69. Copper sulphate
70. Cord Twine Maker
71. Cordage Others
72. Corrugated Paper Board and Boxes
73. Cotton Absorbent
74. Cotton Belts
75. Cotton Carriers
76. Cotton Cases
77. Cotton Cord Twine
78. Cotton Hosiery
79. Cotton Packs
80. Cotton Pouches
81. Cotton Ropes
82. Cotton Singlets
83. Cotton Sling
84. Cotton Straps
85. Cotton tapes and laces
86. Cotton Wool (Non absorbent)
87. Crates Wooden and plastic
88. a) Crucibles up to No. 200 b) Crucibles Graphite up to No. 500 c) Other Crucibles up to 30 kgs.
Page 311
89. Cumblies and blankets
90. Curtains mosquito
91. Cutters
92. Dibutyl phthalate
93. Diesel engines up to 15 H.P
94. Dimethyl Phthalate
95. Disinfectant Fluids
96. Distribution Board up to 15 amps
97. Domestic Electric appliances as per BIS Specifications: -Toaster Electric, Elect. Iron, Hot Plates,
Elect. Mixer, Grinders, Room heaters and convectors and ovens
98. Domestic (House Wiring) P.V.C Cables and Wires (Aluminum) Conforming to the prescribed BIS
Specifications and up to 10.00 mm sq. nominal cross section
99. Drawing and Mathematical Instruments
100. Drums and Barrels
101. Dust Bins
102. Dust Shield leather
103. Dusters Cotton all types except the items required in Khadi
104. Dyes: a) Azo Dyes (Direct and Acid) b)Basic Dyes
105. Electric Call bells/buzzers/door bells
106. Electric Soldering Iron
107. Electric Transmission Line Hardware items like steel cross bars, cross arms clamps arching horn,
brackets, etc
108. Electronic door bell
109. Emergency Light (Rechargeable type)
110. Enamel Wares and Enamel Utensils
111. Equipment camouflage Bamboo support
112. Exhaust Muffler
113. Expanded Metal
114. Eyelets
115. Film Polythene - including wide width film
116. Film spools and cans
117. Fire Extinguishers (wall type)
Page 312
118. Foot Powder
119. French polish
120. Funnels
121. Fuse Cut outs
122. Fuse Unit
123. Garments (excluding supply from Indian Ordnance Factories)
124. Gas mantels
125. Gauze cloth
126. Gauze surgical all types
127. Ghamellas (Tasllas)
128. Glass Ampules
129. Glass and Pressed Wares
130. Glue
131. Grease Nipples and Grease guns
132. Gun cases
133. Gun Metal Bushes
134. Gum tape
135. Hand drawn carts of all types
136. Hand gloves of all types
137. Hand Lamps Railways
138. Hand numbering machine
139. Hand pounded Rice (polished and unpolished)
140. Hand presses
141. Hand Pump
142. Hand Tools of all types
143. Handles wooden and bamboo (Procurement can also be made from State Forest Corpn. and State
Handicrafts Corporation)
144. Harness Leather
145. Hasps and Staples
146. Haver Sacks
147. Helmet Non-Metallic
Page 313
148. Hide and country leather of all types
149. Hinges
150. Hob nails
151. Holdall
152. Honey
153. Horse and Mule Shoes
154. Hydraulic Jacks below 30 ton capacity
155. Insecticides Dust and Sprayers (Manual only)
156. Invalid wheeled chairs
157. Invertor domestic type up to 5 KVA
158. Iron (dhobi)
159. Key board wooden
160. Kit Boxes
161. Kodali
162. Lace leather
163. Lamp holders
164. Lamp signal
165. Lanterns Posts and bodies
166. Lanyard
167. Latex foam sponge
168. Lathies
169. Letter Boxes
170. Lighting Arresters - up to 22 kv
171. Link Clip
172. Linseed Oil
173. Lint Plain
174. Lockers
175. Lubricators
176. L.T. Porcelain KITKAT and Fuse Grips
177. Machine Screws
178. Magnesium Sulphate
Page 314
179. Mallet Wooden
180. Manhole covers
181. Measuring Tapes and Sticks
182. Metal clad switches (up to 30 Amps)
183. Metal Polish
184. Metallic containers and drums other than N.E.C. (Not elsewhere classified)
185. Metric weights
186. Microscope for normal medical use
187. Miniature bulbs (for torches only)
188. M.S. Tie Bars
189. Nail Cutters
190. Naphthalcne Balls
191. Newar
192. Nickel Sulphate
193. Nylon Stocking
194. Nylon Tapes and Laces
195. Oil Bound Distemper
196. Oil Stoves (Wick stoves only)
197. Pad locks of all types
198. Paint remover
199. Palma Rosa Oil
200. Palmgur
201. Pans Lavatory Flush
202. Paper conversion products- paper bags, envelops, Ice-cream cup, paper cup and saucers and paper
Plates
203. Paper Tapes (Gummed)
204. Pappads
205. Pickles and Chutney
206. Piles fabric
207. Pillows
208. Plaster of Paris
Page 315
209. Plastic Blow Moulded Containers up to 20 litre excluding Poly Ethylene Terphthalate (PET) Containers
210. Plastic cane
211. Playing Cards
212. Plugs and Sockets electric up to 15 Amp
213. Polythene bags
214. Polythene Pipes
215. Post Picket (Wooden)
216. Postal Lead seals
217. Potassium Nitrate
218. Pouches
219. Pressure Die Casting up to 0.75 kg
220. Privy Pans
221. Pulley Wire
222. PVC footwears
223. PVC pipes up to 110 mm
224. PVC Insulated Aluminium Cables (up to 120sq. mm) (ISS:694)
225. Quilts, Razais
226. Rags
227. Railway Carriage light fittings
228. Rakes Ballast
229. Razors
230. RCC Pipes up to 1200 mm. dia
231. RCC Poles Prestressed
232. Rivets of all types
233. Rolling Shutters
234. Roof light Fittings
235. Rubber Balloons
236. Rubber Cord
237. Rubber Hoses (Unbranded)
238. Rubber Tubing (Excluding braided tubing)
239. Rubberised Garments Cap and Caps etc
Page 316
240. Rust/Scale Removing composition
241. Safe meat and milk
242. Safety matches
243. Safety Pins (and other similar products like paper pins. staples pins etc.)
244. Sanitary Plumbing fittings
245. Sanitary Towels
246. Scientific Laboratory glass wares (Barring sophisticated items)
247. Scissors cutting (ordinary)
248. Screws of all types including High Tensile
249. Sheep skin all types
250. Shellac
251. Shoe laces
252. Shovels
253. Sign Boards painted
254. Silk ribbon
255. Silk Webbing
256. Skiboots and shoes
257. Sluice Valves
258. Snapfastner (Excluding 4 pcs. ones)
259. Soap Carbolic
260. Soap Curd
261. Soap Liquid
262. Soap Soft
263. Soap washing or laundary soap
264. Soap Yellow
265. Socket/pipes
266. Sodium Nitrate
267. Sodium Silicate
268. Sole leather
269. Spectacle frames
270. Spiked boot
Page 317
271. Sports shoes made out of leather (for all sports games)
272. Squirrel Cage Induction Motors up to and including 100 K W 440 volts 3 phase
273. Stapling machine
274. Steel Almirah
275. Steel beds stead
276. Steel Chair
277. Steel desks
278. Steel racks/shelf
279. Steels stools
280. Steel trunks
281. Steel wool
282. Steel and aluminum windows and ventilators
283. Stockinet
284. Stone and stone quarry rollers
285. Stoneware jars
286. Stranded Wire
287. Street light fittings
288. Student Microscope
289. Studs (excluding high tensile)
290. Surgical Gloves (Except Plastic)
291. Table knives (Excluding Cutlery)
292. Tack Metallic
293. Taps
294. Tarpaulins
295. Teak fabricated round blocks
296. Tent poles
297. Tentage Civil/Military and Salitah Jute for Tentage
298. Textiles manufactures other than N.E.C, (not elsewhere classified)
299. Tiles
300. Tin Boxes for postage stamp
301. Tin can unprinted up to 4 gallons capacity (other than can O.T.S.)
Page 318
302. Tin Mess
303. Tip Boots
304. Toggle Switches
305. Toilet Rolls
306. Transformer type welding sets conforming to IS:1291/75 (up to 600 amps)
307. Transistor Radio up to 3 band
308. Transistorised Insulation - Testers
309. Trays
310. Trays for postal use
311. Trolley
312. Trollies – drinking water
313. Tubular poles
314. Tyres and Tubes (Cycles)
315. Umbrellas
316. Utensils all types
317. Valves Metallic
318. Varnish Black Japan
319. Voltage Stablisers including C.V.T’s
320. Washers all types
321. Water Proof Covers
322. Water Proof Paper
323. Water tanks up to 15,000 litres Capacity
324. Wax Sealing
325. Waxed paper
326. Weighing Scale
327. Welded Wiremash
328. Wheel barrows
329. Whistle
330. Wicks cotton
331. Wind Shield Wipers (Arms and Blades only)
332. Wire brushes and Fibre Brushes
Page 319
333. Wire Fencing and Fittings
334. Wire nails and Horse shoe nails
335. Wire nettings of gauze thicker than 100 mesh size
336. Wood Wool
337. Wooden ammunition boxes
338. Wooden Boards
339. Wooden Box for Stamps
340. Wooden Boxes and Cases N.E.C. (Not elsewhere classified)
341. Wooden Chairs
342. Wooden Flush Door Shutters
343. Wooden packing cases all sizes
344. Wooden Pins
345. Wooden Plugs
346. Wooden Shelves
347. Wooden Veneers
348. Woolen hosiery
349. Zine Sulphate
350. Zip Fasteners
Handicraft Items
Sl. No. Item Description Source of Supply

351. Cane furniture Handloom - North Eastern Handicrafts and Development
Corporation Assam Govt. marketing Corpn. Craft
Society of Manipur Nagaland Handicrafts and
Handlooms Development Corpn.
352. Bamboo file tray, Baskets, Pencil stand, - do-
Racks etc. -
353. Artistic Wooden Furniture - Rajasthan Small Industries Corpn., U.P. Export
Corporation.
354. Wooden paper weight, racks etc. - - do-
355. Glass covers made and grass jute of - do-

wood -
356. Jute furniture - West Bengal Handicrafts Dev. Corpn. Jute Mfg.
Development Corporation Orissa State Handicrafts
Dev. Corpn.
357. Jute bags, file cover - - do-
358. Woolen and silk carpets - U.P. Export Corporation J and K Sale Export
Corporation.
Page 320
REFERENCE - 8
ARBITRATION
1 Arbitration is a procedure wherein a dispute is submitted by an agreement between parties, to one or
more arbitrators who make a binding decision on the dispute. In choosing arbitration, parties opt for
a private settlement procedure instead of going to court directly. It is governed by the Arbitration and
Conciliation Act,1996.
The principal characteristics of arbitration are:
• Arbitration is consensual - Arbitration can only take place if both parties have agreed to it. In case
a dispute arises, parties can incorporate an arbitration clause in the relevant contract. An existing
dispute can be referred to arbitration by means of a submission agreement between the parties.
• The parties choose an arbitrator - The parties appoint a sole arbitrator together. In choosing a
three member arbitral tribunal, each party appoints one arbitrator, and the two arbitrators will
appoint a presiding arbitrator.
• Arbitration is neutral - In addition to appointment of arbitrators, parties are also free to choose
important elements like applicable law, language and venue of the arbitration.
• The decision of arbitral tribunal is final and binding upon both parties.
2 Arbitration and Conciliation is a widely recognized alternative dispute mechanism. It is an alternative

to litigation before Courts of law and is given binding sanctity by statutory enactments. The process
of arbitration exists as a parallel system of dispute resolution with the established judicial process. It
is squarely based on consent and written agreement between parties. The object of arbitration is to
provide fair and impartial resolution of disputes without causing unnecessary delay. With due regard
to advantages of arbitration, it is considered as an ideal method for speedy disposal of cases and has
proved to be effective in commercial disputes. It is pertinent to mention that arbitrators in principle
have more flexible schedules than judges and have greater control over the process and schedule.
As a result of this, arbitrators are expected to spend more time on a case than judges.
This is valuable in complex matters and will result in better decisions. In addition to this, arbitration is a
less formal dispute resolution as opposed to litigation which is more adversarial and time consuming.
Therefore, in terms of convenience, arbitration has proved to be an useful tool for settling disputes in
an amicable manner.
3 Arbitration can be classified into two categories :
i) Ad Hoc Arbitration:
In this category of arbitration, parties agree upon a form of arbitration that is specific to a particular
contract or dispute, without referring to an arbitral tribunal. In other words, when parties agree to
arbitrate but do not refer to institutional rules, they have an ad hoc arbitration clause.
ii) Institutional Arbitration:
In institutional arbitration, proceedings are conducted according to the rules of an arbitral

institution like ICA/ICADR.
4 An arbitration agreement may be in the form of an arbitration clause in the form of a contract or in
the form of a separate agreement and it shall be done in writing. It should be simple and effective.
There should not be any ambiguity. It has to demonstrate a consensus between parties to refer the
Page 321
dispute to arbitration. An arbitration clause that is present in a contract will be viewed as a separate
and distinct agreement between parties.
5 The following factors have to be borne in mind while drafting an arbitration clause:-
a) Manner of appointment of arbitrators.
b) Place of arbitration.
c) Applicable law and language.
d) Procedure agreed upon between parties to the contract.
6 In case the parties want to invoke an ad hoc arbitration clause, the following procedure can be
mutually agreed upon between parties.
a) For appointment of sole arbitrator:
“In case a dispute arises between parties in connection with the agreement and all/any terms and
conditions hereof, the matter should be resolved through mutual discussion and negotiations.”
However, if the parties are not able to resolve their dispute through mutual discussion and
negotiations, such dispute should be resolved through arbitration by a sole arbitrator. The
provisions of the Arbitration and Conciliation Act, 1996 shall apply to such dispute, The Place of
arbitration shall be _____ . The language of arbitration shall be English.
b) For appointment of 3 arbitrators:
negotiations, such dispute should be resolved through arbitration by a panel of three arbitrators,
Each party shall appoint one arbitrator, and the two appointed arbitrators shall in turn appoint
a presiding arbitrator, The provisions of the Arbitration and Conciliation Act, 1996 shall apply to
such dispute, The Place of arbitration shall be _____ .The language of arbitration shall be English.
In the event it is desirous of invoking an institutional arbitration clause, the following procedure
can be followed:
negotiations, the dispute can be resolved amicably through arbitration. The provisions of
Arbitration and Conciliation, 1996 shall apply to such dispute.
The appointing authority will be ______________________
[Name of Institution/arbitrator}.
The place of arbitration will be _______________________
The language agreed upon parties will be ________________
The award passed by the arbitral tribunal will be final and binding upon both parties.
7 Settlement of disputes between Public Sector enterprises and or Government department will be as
per Government guidelines issued from time to time.
Page 322
- NOTES -
Page 323
- NOTES -
Page 324

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What are the main revisions made in the new Purchase Manual?

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Purchase Manual

HINDUSTAN AERONAUTICS LIMITED

Dr. R.K. Tyagi

3.16 Review of Suspension / Banning Order 35

5.2.4 Mode of Dispatch of Enquiry 42

Annex-15 Format of Draft Agreement for Rate Contract 229

8.8.3 Advance Payment 74

10.23 Custom Duty Exemption Certificate 86

21B Format for comparative statement of prices 250

36 Off-line EMD payment 22.6.4.g

a) Timely provisioning of materials and raise demands in appropriate proforma (MPR/PRs)

b) Follow up for progression of MPRs.

d) Authorise issue of materials

f) Inventory Control and analysis

a) Preparation of RFQ and tendering

b) Receiving quotations/Tender opening, commercial, vetting, evaluation of quotes and compilation

c) Convening and coordinating PC/MPC meetings.

d) Arrange for negotiations if any,

e) Arrange for Long Term Business Agreement/Rate Contract if any.

g) Purchase order progression for ensuring availability of material in time.

h) Ensure prompt payment to supplier after receipt of material.

i) Follow up of replacement /rectification against any rejections and warranty claims.

j) Vendor evaluations and directory.

k) Coordinate with regards to contract management, licence agreement, co-production agreement

l) Resolve commercial dispute / arbitration.

m) Preparation of Purchase Budget

a) Identification of Stock items

c) Rationalization and variety reduction

d) Arrange for custom clearance and collection of goods.

e) Prefer claim on vendor/Insurance as the case may be in case of rejection/damage.

j) Proper storage / preservation of materials, issue against authorized material requisitions.

k) Carry out perpetual stock/physical verifications.

l) Review of slow-moving / non-moving lists and take appropriate disposal action.

n) Proper storage / preservation of tools, issue against token.

a) M.I.S. to various agencies

1.1 The fundamental principle of procurement function is to ensure

a) Efficiency, economy and transparency

b) Competition wherever it is non-proprietary, non-licensor procurement and non-customer

e) To serve as information center on materials knowledge prices, sources of supply, specifications

g) Training of purchase personnel in the latest techniques of Materials Management.

h) To keep management appraised of the likely shortfalls in purchase performance by introducing

i) To adhere to commercial procedures & maintain cannons of financial propriety to safeguard

b) Maintenance of vendor evaluation and rating records.

d) Analysing bids / offers for decision-making by the Competent Authority.

e) Arranging negotiations with Vendors, when necessary.

f) Issue of Purchase Orders in time.

j) Maintaining a library of product catalogues and manufacturers/Distributor’s price lists etc.

l) Submit MIS reports and other periodic returns.

m) Entering into service contracts in line with the DoP.

n) Entering into Transit Insurance agreements for goods in transit.

p) To ensure that objectives of purchase are realized.

r) Ensure timely payments to suppliers.

1.4 PURCHASE ORGANISATION

Project Materials - Non- Project Allied Services Contracts relating to

2.2 Capital Equipment