STANDARD OPERATIONAL PROCEDURE FOR …

1 STANDARD OPERATIONAL PROCEDURE FOR purchasing FUNCTION AT NAC AND ITS CONSTITUENT UNITS N A T I O N A L A C A D E M Y O F C O N S T R U C T I O N H Y D E R A B A D NATIONAL ACADEMY OF CONSTRUCTION A ROLE MODELDISPLAY CENTRE & AUDITORIUM P R E F A C E Place : Dated : Director General, NAC CONTENTS PARAGRAPH NO SUBJECT PAGE NO 1 . 0 I n t r o d u c t i o n 2 . 0 P u r p o s e 3 . 0 O b j e c t i v e 4 . 0 S c o p e 5 . 0 E x c e p t i o n s 6 . 0 P o l i c i e s 7 . 0 P u r c h a s e r e q u i s i t i o n s / I n d e n t s 8 . 0 S c r u t i n y o f p u r c h a s e r e q u i s i t i o n s / I n d e n t s 9.

2 0 F l o a t i n g o f e n q u i r e s 1 0 . 0 R e c e i p t o f q u o t a t i o n s a n d a l l o c a t i o n o f o r d e r s 1 1 . 0 R e l e a s e o f p u r c h a s e o r d e r 1 2 . 0 P r o c u r e m e n t o f g o v e r n m e n t c o n t r o l l e d m a t e r i a l s 1 3 . 0 R e j e c t e d m a t e r i a l s 1 4 . 0 D e v e l o p m e n t o f a l t e r n a t e m a t e r i a l s / s o u r c e s o f s u p p l y 1 5 . 0 S o u r c e s o f I n f o r m a t i o n 1 6 . 0 V e n d o r c o n t a c t 1 7 . 0 R e l a t i o n s w i t h s u p p l i e r s 1 8 . 0 V e n d o r s e v a l u a t i o n s y s t e m 1 9 . 0 D i s p o s a l o f s c r a p / s u r p l u s / o l d n e w s p a p e r s / c a r d b o a r d c a r t o n s e t c.

3 2 0 . 0 A p p e n d i c e s 2 1 . 0 C o n c l u s i o n INTRODUCTION purchasing IS A CHALLENGING NEVER ENDING JOB WITH A SIGNIFICANT FINANCIAL GAIN FOR EFFECTIVE WORK purchasing function is described as the business activity directed to securing the materials, supplies and equipment required in the operations of an organisation. It has a long range objective of ensuring continuity of cost effective supplies of materials and services. purchasing function operates within a framework determined by the management. No other function has greater inter-relationships not only within the organisation but also with outside supplier organisations.

4 It is a managerial activity that includes planning and policy activities covering a very wide range of related and complimentary activities such as: Market research for new materials and development of new sources of supply. Follow up to ensure proper delivery Inspection of materials for quality and compliance with specifications. Development of proper systems and procedures to enable the purchase function to be carried out efficiently. Coordination with other activities within the materials department like transportation, receiving, storekeeping, inventory control, accounting, disposal of scrap and surplus etc. Considering that the purchasing rupee forms a significant percent of total expenses, the importance of the purchasing function need not be overemphasized in todays economic environment.

5 PURPOSE To provide a framework for managing the purchasing function in an ethical, effective and uniform manner by : Defining the Objectives and Scope of the purchasing function. Establishing the purchasing Policies. Describing the procedures to be followed in the implementation of the policies. Issuing Authority Level / Limits / and Guidelines to purchasing officials. OBJECTIVES Make purchase commitments for materials, equipment and services at the lowest possible price, consistent with quality and delivery requirements. Ensure deliveries of purchase materials are available to meet Training, OPERATIONAL and Maintenance requirements and that equipment is delivered and services are performed as required and agreed to by user, buyer and supplier.

6 Explore and capitalize on all legally permissible opportunities for cost reduction on purchase of materials. Ensure suppliers adhere strictly to brand or make and test specifications and that materials and equipment received meet specified quality standards and all stated performance criteria. Develop local suppliers. Establish and maintain good relations with suppliers. Implement buyer rotation plan. SCOPE This STANDARD OPERATIONAL PROCEDURE covers all the purchasing activities of the following: All materials required for tradesmen training at Hyderabad and outstation training centers, tradesmen tool kits, personnel protective equipment. Construction materials and machinery including spares, parts, tools and equipment.

7 All capital equipment / items. All project purchases including tenders for civil and electrical work. Office equipment and stationery. House keeping materials. Uniforms for staff / trainees Fire fighting equipment All other items of purchase of goods and / or services not specifically included under Exceptions at Para EXCEPTIONS Published materials including books, periodicals etc. Professional fees / services. Personnel services. Advertising services. Data processing software services. Administrative services including travel, hotel and hiring of cars. Canteen services including cooking gas, crockery, cutlery etc. Mementos, souvenirs and gifts to employees. Hiring office space. POLICIES Except as otherwise specified under Exceptions entire purchasing for NAC and its constituent units shall be made by the designated purchasing officials only.

8 The purchasing official is empowered to act on the basis of an approved Expenditure Sanction or Indent. Sample pro forma for Expenditure Sanction and Indent as applicable to are placed at Appendix A and Appendix B respectively. In an emergency situation, there must be documentation on file explaining the emergency and why the normal purchasing process was not followed. purchasing official will have the following responsibilities:- Identify suppliers, obtain appropriate information, such as quality, delivery, pricing etc. and make all purchasing commitments after obtaining approval from purchase committee of HQ NAC. A purchase committee has been appointed by the DG to oversee local purchase / and proposals of NAC / its constituent units for procurement proposals beyond @ Solicit quotations only from suppliers who are qualified or can be qualified to meet all requirements.

9 An approved suppliers list as per Appendix C must be maintained for all purchases of repetitive nature. Examination of the financial status of a company, facilities, its ability to perform timely, meet commitments should be part of the criteria considered to select a supplier. The user and purchasing officials shall be jointly responsible for identifying acceptable suppliers with the user responsible for the technical evaluation and purchasing officials responsible for financial and service evaluation. Once acceptable suppliers have been identified, purchasing official will recommend to purchase committee for the selection of a supplier who can best respond to the organizational requirements.

10 The materials specifications shall take into consideration the price and availability factors without compromising on quality. The quality standards shall not be unnecessarily rigid to preclude competition or economic purchasing . All items and service purchases must be properly covered by an appropriate and duly authorized purchase requisition or indent setting forth all the required information including date, specifications, delivery instructions and available budget provisions. Items of regular consumption shall be bought on a contract basis by sending annual enquiries every year. Other items shall be purchased by inviting quotations as and when the indents are received. Enquiries shall indicate the approximate quantity likely to be purchased to take advantage of bulk purchases.