Legal & Procedural Framework
Legal & Procedural Framework
• Constitution of India
• Indian Contract Act
• Sale of Goods Act
• Indian Arbitration & Conciliation Act
• Procurement Rules contained in GFR, if applicable
• Procurement Guidelines formulated by CVC
• Procurement Guidelines of the Department/PSU
concerned
GFR 2017
AN
OVERVIEW
GFR JOURNEY
• GFR 1947
• GFR 1963
• GFR
2005
•
Basic Learning Rationale
PERSONAL
PURCHASE V/S
GOVT
PURCHASE
Working under GoI norms & policy
framework
FACTS OF PROCESS
Financer determines the Process – GoI
• Prescription, policy & rules of GoI
• Lawful process
• Power – Delegation of authority
• Open competition – Opportunity to all
• Need based purchase – No speculation
Contract is the basis for procurement
Needs time, knowledge and Planning
WHY GFR
• Rules and orders of Government of India while
dealing with matters involving public finances
• Principles of accountability
• Procedures of financial discipline and
administrative due diligence
• Manage business in a financially prudent
manner without compromising flexibility to deal
with varied situations
• Promoting simplicity and transparency in the
government financial system and procedures
REGULATORY PRINCIPLES
• Public Procurements of Govt of India
are governed by the General Financial
Rules 2017 (GFR 2017)
• While dealing with matters involving
public finances, these have to be
followed
• Issued by Dept of Expenditure, Ministry
of Finance, Government of India
GFR FOR PROCUREMENT OF
GOODS
Chapter 2 General System of Financial
Management
Chapter 6 Procurement of Goods and
Services
I. Procurement of Goods
II. Procurement of Services
Chapter 7 Inventory Management
Chapter 8 Contract Management
Appendix 11 Formula
for PVC
Form GFR 10 Report of Surplus, Obsolete
and Unserviceable Stores for Disposal
GFR 2017: Rule 21 - Standards of financial propriety
In summary
For expenditure from public moneys
To Ensure that financial rules and
regulations are observed
Apply ordinary prudence as for
own money
Not more than the occasion
demands
No self sanction for own advantage
Not for benefit of particular person/section
unless:
Claim can be enforced in a Court of Law
GFR 2017: RULE 21 - STANDARDS OF FINANCIAL
PROPRIETY
Every officer incurring or authorizing expenditure from public moneys
should be guided by high standards of financial propriety.
Every officer should also enforce financial order and strict economy
and see that all relevant financial rules and regulations are
observed, by his own office and by subordinate disbursing officers.
Among the principles on which emphasis is generally laid are the following
:-
(i)Every officer is expected to exercise the same vigilance in respect
of expenditure incurred from public moneys as a person of ordinary
prudence would exercise in respect of expenditure of his own money.
(ii)The expenditure should not be prima facie more than the occasion
demands.
(iii)No authority should exercise its powers of sanctioning expenditure to
pass an order which will be directly or indirectly to its own advantage.
(iv) Expenditure from public moneys should not be incurred for the
benefit of a particular person or a section of the people, unless –
(a) a claim for the amount could be enforced in a Court of Law, or
(b) the expenditure is in pursuance of a recognized policy or custom.
Rule 144 Fundamental principles of public buying
• Rule 174
Efficiency, Economy and Accountability
in Public Procurement System
• Rule 176
Buy-Back Offer
CVC Guidelines
Meaning of Vigilance Angle
• Demanding / accepting gratification other than
legal remuneration in respect of an official act
• Obtaining valuable things without consideration
from a person with whom has or likely to
have official dealings
• Possession of assets disproportionate to
known sources of income
• Obtaining any valuable things by corrupt or
illegal means by abusing his official
position
CVC Guidelines
• Applicable to all Central entities
• Issue of guidelines by CVC either
Sue Moto or on review / examination
of various complaints
• Guidelines focuses on integrity
of public servants
Causes of Corruption
Santhanam Committee identified
four major causes of corruption:
• Administrative delays
• Personal discretion in the exercise of
power
• Cumbersome procedure
• Lack of knowledge with regard to rules &
guidelines
CVC GUIDELINES- MODE
OF PROC
• In order to generate enough competition and
to
avoid favoritism, issue of
tender inquiries should advertised/global be
resorted to
published in journals and national
newspapers giving adequate timeand
to the
prospective bidders.
Integrity Pact
Integrity Pact
Principal Vendor
CVC Guidelines on Procurement/
Contract Management
Mobilization advance
Contd…
CVC Guidelines on Procurement/
Contract Management
Undertaking by members of tender
committee
Contd…
CVC Guidelines on Procurement/
Contract Management
• No. of trailers & handling equipment in numbers less than the contract
provides
• Deployed trailers/equipment not meeting vintage year criteria
• Original registration certificate of the vehicles not available
• Breakdown register for the trailers/equipment not maintained in
proper
format
• Failure to issue job orders
• Permits not issued through computerized system (gate in & gate out passes)
• Equipment utilized for movement in another contract
• Contract on adhoc basis
Corrective Action
Detailed guidelines issued on these inspection points of vigilance
TO MINIMIZE CORRUPTION
Personal purchase
v/s
Govt Purchase
Working under GoI norms & policy
framework
Facts of Process
Financer determines the Process – GoI
• Prescription, policy & rules of GoI
• Lawful process
• Power – Delegation of authority
• Open competition – Opportunity to all
• Need based purchase – No speculation
Contract is the basis for procurement
Needs time, knowledge and Planning
Why GFR
• Rules and orders of Government of India while
dealing with matters involving public finances
• Principles of accountability
• Procedures of financial discipline and
administrative due diligence
• Manage business in a financially prudent
manner without compromising flexibility to deal
with varied situations
• Promoting simplicity and transparency in the
government financial system and procedures
Regulatory Principles
• Public Procurements of Govt of India
are governed by the General Financial
Rules 2017 (GFR 2017)
• While dealing with matters involving
public finances, these have to be
followed
• Issued by Dept of Expenditure, Ministry
of Finance, Government of India
GFR for Procurement of Goods
Chapter 2 General System of Financial
Management
Chapter 6 Procurement of Goods and
Services
I. Procurement of Goods
II. Procurement of Services
Chapter 7 Inventory Management
Chapter 8 Contract Management
Appendix 11 Formula
for PVC
Form GFR 10 Report of Surplus, Obsolete
and Unserviceable Stores for Disposal
GFR 2017: Rule 21 - Standards of financial propriety
In summary
For expenditure from public moneys
To Ensure that financial rules and
regulations are observed
Apply ordinary prudence as for
own money
Not more than the occasion
demands
No self sanction for own advantage
Not for benefit of particular person/section
unless:
Claim can be enforced in a Court of Law
GFR 2017: Rule 21 - Standards of financial propriety
Every officer incurring or authorizing expenditure from public moneys
should be guided by high standards of financial propriety.
Every officer should also enforce financial order and strict economy
and see that all relevant financial rules and regulations are
observed, by his own office and by subordinate disbursing officers.
Among the principles on which emphasis is generally laid are the following
:-
(i)Every officer is expected to exercise the same vigilance in respect
of expenditure incurred from public moneys as a person of ordinary
prudence would exercise in respect of expenditure of his own money.
(ii)The expenditure should not be prima facie more than the occasion
demands.
(iii)No authority should exercise its powers of sanctioning expenditure to
pass an order which will be directly or indirectly to its own advantage.
(iv) Expenditure from public moneys should not be incurred for the
benefit of a particular person or a section of the people, unless –
(a) a claim for the amount could be enforced in a Court of Law, or
(b) the expenditure is in pursuance of a recognized policy or custom.
Every
Rule 144authority delegated
Fundamental principles of public buying
• Rule 174
Efficiency, Economy and Accountability
in Public Procurement System
• Rule 176
Buy-Back Offer
CVC Guidelines
Meaning of Vigilance Angle
• Demanding / accepting gratification other than
legal remuneration in respect of an official act
• Obtaining valuable things without consideration
from a person with whom has or likely to
have official dealings
• Possession of assets disproportionate to
known sources of income
• Obtaining any valuable things by corrupt or
illegal means by abusing his official
position
CVC Guidelines
• Applicable to all Central entities
• Issue of guidelines by CVC either
Sue Moto or on review / examination
of various complaints
• Guidelines focuses on integrity
of public servants
Causes of Corruption
Santhanam Committee identified
four major causes of corruption:
• Administrative delays
• Personal discretion in the exercise of
power
• Cumbersome procedure
• Lack of knowledge with regard to rules &
guidelines
CVC guidelines- Mode
of Proc
• In order to generate enough competition and
to
avoid favoritism, issue of
tender inquiries should advertised/global be
resorted to
published in journals and national
newspapers giving adequate timeand
to the
prospective bidders.
Integrity Pact
Principal Vendor
CVC Guidelines on Procurement/
Contract Management
Mobilization advance
Contd…
CVC Guidelines on Procurement/
Contract Management
Undertaking by members of tender
committee
Contd…
CVC Guidelines on Procurement/
Contract Management
• No. of trailers & handling equipment in numbers less than the contract
provides
• Deployed trailers/equipment not meeting vintage year criteria
• Original registration certificate of the vehicles not available
• Breakdown register for the trailers/equipment not maintained in
proper
format
• Failure to issue job orders
• Permits not issued through computerized system (gate in & gate out passes)
• Equipment utilized for movement in another contract
• Contract on adhoc basis
Corrective Action
Detailed guidelines issued on these inspection points of vigilance
To Minimize Corruption
• Reduce Monopoly & Discretionary powers
• Increase Accountability, Transparency,
Efficiency
C = M + D – (A+T+E)