CHAPTER VI 

CONTRACTS ESTIMATES 

601.    Estimates for Procurement.—The Controller of Stores has to estimate in advance the requirement of each item he holds in stock with a view to make timely procurement.   The actual procurement may be through a Central Agency (DGS&D, Railway Board etc.) or directly by the Controller of Stores. 

For items procured through a Central Agency the estimate should be prepared on annual requirement basis to be submitted to the Central Agency as per the schedule fixed by them. 

The 12 months period for which the requirement is estimated is called "Contract Period". The period between the date of preparation of the Estimate Sheet and the beginning of the contract period is called "Interim Period". Estimate of requirement is made simultaneously for the contract period as well as Interim Period. 

For items procured by the Controller of Stores directly, the estimate may be on annual basis or on maximum/minimum basis as decided by Controller of Stores. 

ANNUAL PROCUREMENT SYSTEM 

602.     Time Table.—Before the Controller of Stores can estimate the quantities required for the interim period and contract period for the entire railway, he has: 

(i) to obtain detailed information from the Depots of their estimated requirements. (S-603 to 608 &615). 

(ii) to consolidate the information thus obtained so as to arrive at the total estimated requirement forth Railway.(S610,611&616). 

(iii) to review the current contracts for supplies of stores in light of the actual balances of requirement known from these estimates and with a view to modify the scope of supplies under these contracts. (S 618). 

For efficient working of the procedure a total time table laying down the dates by which the several stages of the working of preparation, scrutiny and consolidation of the estimates should be completed should be framed by each railway. The time table will ensure that requirement of various depots is simultaneously received in COS' office. 

For convenience of work, this time table should be arranged groupwise and should ensure that the work is distributed uniformally over the year. 

602 (A). Depending upon the time table fixed by the Controller of Stores, the Depots in turn should decide upon their own time table to ensure timely submission of their contract estimates to the Controller of Stores. 

603.    Contract Estimates of Depots.—The basic purpose of the annual estimate sheet is to advise the requirement of Depot for the contract as well as interim period.   It should also contain adequate data so that checking is possible in COS' office.    A typical coverage of data may be as indicated below:— 

Depot 

PL No. 

Unit 

Nomenclature 

Contract Period 

Consumption during last 3 years 

During current year 

Average rate of consumption 

Estimated rate of consumption 

(Reasons for variations, if any, between average consumption and estimated consumption should be recorded). 

Stock on hand 

Covered dues 

Uncovered dues 

Estimated requirement for the interim period 

Estimated requirement for the contract period 

However where additional information is available in the computerised system the extent of such information may be determined by the COS. 

The Estimate Sheet should be submitted in duplicate to COS' office one copy should be returned to the Depot alongwith an extract of estimate sheets (Para S. 617). 

604.    Deleted. 

605.     Guidelines on filling up Contract Estimate Sheets.—Theoretically speaking the requirement for the interim period should be NIL and for the contract period it should be 12 months average consumption. However, in actual practice there may be variations.    Cases may occur where the quantities ordered for the contract period prove to be either excessive or in-sufficient. 

The depots prepare their contract estimate sheet a few months in advance of the contract period. This gives an opportunity for an automatic review of the current contract period (which is interim period for the next contract period). Depending upon the actual position, requirements for the interim period and contract period should be calculated by the depot. 

There may be cases that the estimated requirement shown by the depot would be negative indicating that the depot is having excess stock. 

The estimated requirement submitted by the depot may also show variations from actual average consumption in the past. In all such cases the depot should give adequate remarks explaining the reasons for such differences. 

606.    Deleted. 

607.    Deleted. 

608. True Issue.—In making up their forecast, the Depot should take into consideration "True Issues" only. "True Issues" or, as they are generally termed, "consumption" comprise that portion of the ordinary stores issues for which ordinary stores stock is maintained. "True Issues", therefore, exclude depot transfers, issues to non-recurring capital works, sales, adjustments and other non-recurring issues and include only issues to home line indentors against regular routine demands and to recoup imprest stock. 

609.    Deleted. 

610.    Proforma for Consolidation of Depot Estimate.—Annual estimate sheets received from various depots will be consolidated in COS' office for taking necessary action on the requirement of the Railway as a whole. 

The consolidation may be done on a suitable proforma which will be referred as "Contract Grouping and Allotment Form." A suggested proforma is shown below:— 

CONTRACT GROUPING AND ALLOTMENT FORM 

P.L. No................................................................ 

Description............................................................ 

Unit.................................................................... 

Contract period....................................to....................................Date....................... 

Depot Name Stocks required for the new contract period Stock available at depot for transfer at the end of the current contract period Balance due from the firm on the date of the depot statements are compiled Net excess i.e. with firm and at the depot at the begining of new contract period Stock to be purchased in the new contract period Allotment Remarks and details of specification of the article
Purchase distribution Excess distribution
1 2 3 4 5 6 7 8
               

 Total 

Grouped by.......................................date.................................. 

Checked by.......................................date.................................... 

.............................

for Controller of Stores

 Date........................

611.     Guidelines on preparing Contract Grouping Forms.—Contract Grouping  Form should be prepared separately for each item of stock. The complete information of all the depots for that item should be indicated on one sheet. 

For the purpose of consolidating the demand as various depots the contract estimate sheet submitted by the depots should be examined critically. Variations between average consumption and estimated consumption as shown by the depots should be reviewed to assess its effect on inventory and modifications if necessary should be made. The position of covered and uncovered dues should be reconciled with the records of the purchase section namely History-cum-Rate Card (S- 637) and the position in the depot's sheets should be updated as required.

The list of surplus and overstocks available on the Railway should invariably be consulted. 

The consolidation may show a net requirement for the railway as a whole which will be required to be procured or it may show net availability of excess 'stocks plus dues' for the railway as a whole, which may be distributed to the depots. 

612.    Action for Procurement.—The Contract Grouping form will be sent to the Central Indent Section of COS' office for submitting indent to the Central Agency as per their time table, for items which are centrally procured.     For other items, procured directly by COS' office, the Grouping Form will be sent to the Purchase Section concerned for taking purchase actions. The Grouping form or an extract of it for part quantity for indents items will also be forwarded to the Purchase Section where an emergency purchase is required in view oflow stock position. The Purchase Section will initiate purchase action and open a case with the contract Grouping Form or its extract.

613.    Advise to Depots.—One copy of the Contract Grouping Form along with duplicate copy of depot's annual estimate should be returned to the depot by the Central Indent Section in case of indents and by the Purchase Section in case of purchase, so that the depots are advised of action taken by COS' office. 

The duplicate copy of the depot's estimate sheet will also indicate changes made by COS' office in the depot's estimate. The Contract Grouping Form will indicate the actions being taken to meet depot's requirement. It will also contain instructions for transfer of excess stocks from one depot to another, if necessary. Normally it will indicate the net quantity which is being procured for the railway as a whole as well as the various depots. 

In cases where direct purchase action is being taken by COS' office, the copy returned to the depot should showthe case No. of Purchase Section. 

614.    Deleted. 

MAXIMUM/MINIMUM PROCUREMENT SYSTEM 

615.    Submission of Recoupment Sheet by Depots.—As per para S-601, the Controller of Stores will decide what items are to be procured on maxima/minima basis.   The procedure of procurement of items on maxima/minima basis will be as detailed in para S-615 to S-617. 

Recoupment action for such items will be initiated by the Depot as soon as "stocks+dues" of the item comes to "minimum+buffer" level. The Depot will submit a recoupment sheet, in duplicate, to COS' office, for further procurement. The recoupment sheet will essentially include the same details which have been given under para S-603, except that there would be no estimated requirement for interim or contract period. In lieu of the same the Depot will make recoupment for a quantity equal to "maximum". The quantity may, however, vary from maximum to a higher or lower level to cover demand/lead time variations. 

As the method of procurement suggests, there would be no time table for submission of the recoupment sheets and this will be submitted as and when an occassion arises. 

616.    Scrutiny of Recoupment Sheets in COS' Office.—The recoupment sheet after receipt in COS' office should be critically examined. Variations between average consumption and estimated consumption should be reviewed and modifications, if necessary., should be made. The position of covered and uncovered dues should be reconciled with the records of the purchase sections, namely History-cum-Rate Card (S-637) and the recoupment sheet submitted by the depot should be updated as required. 

Before deciding on procurement action, availability of overstock or surplus on the railway should also be checked up. Any quantity, which is required after scrutiny should be sent to the purchase section for initiating procurement action. 

617.    Advice to the Depot.—The recoupment sheet will be sent to the purchase section for initiating procurement action, if there is a net requirement, otherwise it will be filed.   The purchase section will! initiate procurement action and open a case with one copy of recoupment sheet.     The other copy of the recoupment sheet will be sent back to the depot for information.   This copy will show the position as corrected or modified in COS' office as well as case No. of the purchase section. 

618.    Review of Current Contracts.—The consolidation of depots requirements (S-611 & 616) may show a net requirement for the Rail way as a whole for which further procurement action should be taken (S-621 & S-617). 

There may, however, be cases that the consolidation shows net availability of excess 'stocks+dues' for the Railway. In such cases no further procurement action is necessary. On the other hand, the existing contracts for supply should be reviewed and outstanding quantities should be modified or cancelled as far as possible, keeping in view the contractual obligations. Re-distribution of physical stocks available with the depots as well as quantities outstanding on contracts should also be done. 

619.    Deleted. 

 

STORES DEPARTMENT 

MODIFICATION/CANCELLATION OF PURCHASE ORDER

 

Purchase Order No..............................................                     Date....................... 

Modification Advice No........................................ 

From : Controller of Stores                                                        To 

.....................................                                                   Messers.......................... 

Dear Sirs, 

             Ref............................................................................... 

            YourRef. No........................................Dated...............19................................. 

*Please note that the following alterations have been carried out in respect of Estimate Advice/ Acceptance of Tender/Purchase Order mentioned above. All other terms and conditions remain unchanged. 

*Please note that the Purchase Order mentioned above has been cancelled for the quantity mentioned below.    A fresh Purchase will be arranged at your risk and expense if necessary. 

Item No. of P.O...............                                    From                                  To                             

Quantity...................

Rate ........................

Consignee's Name & Code  .....................

Delivery Date ...................................... 

1.    This modification is issued subject to the conditions prescribed on the reverse. 

2.    This modification is issued subject to the conditions that all taxes and duties if imposed during the extended period of delivery will be borne by the supplier. 

..................................................

For and on behalf of the President of India

 

(* Strike out which is not applicable) 

Reasons for Cancellation :— 

1.    Not required. 

2.    As you are unable to supply as per your letter quoted. 

3.    As you have failed to supply. 

4.    Annual contract quantity completed and the item has been closed. Revised 

FOR OFFICE  

USE 

Quantity Rate No. Unit Code Consignee Delivery Date
         

Copy :—FA&CAO (S) for information. 

DCOS/.......................................for information, He is requested to furnish supply

particulars in detail within 3 days from date of expiry. 

DOI/ for information and necessary action.   

 CONDITIONS 

1. Please note that an amount equal to the liquidated damages for delay in the supply of the stores after the expiry of the contract delivery period shall be recovered from you for the extended period notwithstanding the grant of this extension 

You may now tender-------------------------------------the stores--------------------- for inspection in 

balance of stores 

terms of this letter.   Stores, if any, already tendered by you for inspection but not inspected will now be inspected accordingly.

2.   The above extension of delivery date will also be subject to the following further conditions:—

(a) That no increase in price on account of any statutory increase in or fresh imposition of Customs Duty, Excise Duty, Sales Tax or on account of any other tax or duty leviable in respect   of  stores   specified   in   the   purchase   order   which   takes   place 

after....................................shall be admissible on such of the said stores as are delivered after the said date; and 

(b) That notwithstanding any stipulation in the contract for increase in price on any other ground  no such increase which takes place after *....................................shall be admissible on such of the said stores as are delivered after the said date. 

(c) But, nevertheless, the purchaser shall be entitled to the benefit of any decrease in price on account of reductions in or remission of Customs duty, Excise duty, Sales tax or on account of any other tax or duty or on any other ground as stipulated in the price variation clause which      takes place after the expiry of the above mentioned date namely *.................................... 

3.   Please intimate immediately your acceptance of the extension on the above conditions.   Please note that in the event of your declining to accept the extension on the said conditions or your failure after accepting acting upon this extension to deliver 

The stores

--------------------------------------------------within the delivery period as here extended the 

The outstanding quantity of stores 

contract shall be cancelled and outstanding quantity of the stores shall be purchased at your risk and cost under the terms of the contract. 

*Give here the date of expiry of the original delivery period in all extensions. 

620.    Five copies of this form should be prepared and distributed, one to the Accounts Officer, Stores, one to the Inspecting officer, one to the Main Depot for the item of stores, and one to the Contractor, the fifth being retained as office copy.   Any such increase or decrease of quantities should be posted into the Position Cards (S.635). 

621.    Material Outstanding with Firms.—Cases occur where towards the end of a contract period for any class, the quantity of an item of stores which the railway is under obligation to draw from the firm has not been fully drawn.   It may, however, suit the supplying firm to leave the matter as it is, because of their having a more profitable avenue for disposal other than to the railway.   In order to deal with the matter in the most advantageous manner to the railway, such obligatory quantities should not be purchased as a matter of course, but timely notices should be issued requesting those firms, who wish the balance of any of the obligatory quantities to be drawn to notify the Controller of Stores, stating the quantity.    As the material so ordered does not represent the current consumption, particulars of such obligatory purchases should be noted on all relevant documents. 

622.    Deleted. 

623.    The completed Grouping Forms (S. 610) should be sorted into two batches, one batch containing items in stock where there are no demands during the present or the new contract period; this batch should be handed over to the Surplus Stock Section.    Similarly when there is an excess stock exceeding the requirements of the current and the new contract periods, the Grouping Forms should be forwarded to the Surplus Stock Section. 

624. Tender Schedules.—After the compilation of estimates on the Grouping Form (S 610) the forms for items of a class that are to appear in one schedule for the purpose of advertising for tenders should be made into separate batches. Those items which are serially catalogued in the Price List of class to one specification, and which differ only in dimensions may be grouped in one tender schedule. This has the advantage of making contracts more attractive to supplying firms, while at the same time reducing the number of contracts. Examples of such items are the various sizes of crucibles, twist drills, files, screws, fire-bricks, brush ware &c. The average rate, which is always available from the Price List should then be applied to each batch of forms (S.610) to find the total value of the tender schedule and any batch which aggregates to less than one thousand rupees for the annual requirements should be set apart and endorsed accordingly. For the remaining batches of grouped items which aggregate to one thousand rupees or over, copies of the Tender Schedules for each group should be prepared and arrangements made for the letting of contracts or for the preparation and issue of excess stock distribution statements items by item to the Main Depot. 

625. Items Procured by a Central Agency.—For items procured by central agencies (DGS & D, Railway Board, etc.) indents in the prescribed form should be submitted as per the time-table. The indents will show distribution of quantity to the various consignees. Suitable endorsement instructing the central agency for forwarding copies of the contracts to the various consignees should also be given. 

626.   Deleted. 

627. Forcing (if Surplus/Overstock.—While finalising further procurement action in COS' office in terms of para 611 & 616, the list of surplus and overstock items available on the railway should be consulted. The list of such items received from other Railways should be also be taken into account. Wherever surplus or overstock exists, the same should be distributed to meet the requirements of the depots. 

Efforts should a 1 so be made to make use of surplus and overstocks as substitutes for requirement of other items also. 

628. Shop Manufactured Items.—Shop manufactured items should be indicated on Contract Estimates (S. 603). These items should be grouped on the Grouping Forms (S. 610) in the usual manner, and a list of such items, when summarized, should be forwarded to the Chief Mechanical Engineer in order that he may have a forecast of the annual requirements. The manufacture of such articles is not to be put in hand, however, until the Depot Officers place Stock Requisitions on Workshops (S. 1437). These requisitions will be placed when the stocks teach the indicated minimum quantity. 

629.   Acceptance of Tenders.—The successful tenderers, for contracts should be notified on the following form of their tenders having been accepted.                                                                                                            

                                                                                                                                             Form No. S. 629

Acceptance of Tenders

Ref. No. 

To 

Messers..........................................

Station...................

 Date......................

 Dear Sirs, 

Your offer to supply on...........................*rate contract the stores specified below has this 

day been accepted to the extent of the quantity and on the terms as to delivery specified herein, subject 

to the Indian Railway  standard Conditions of Contract No......................and the instructions for the 

guidance of Contractors issued by the..................Railway. 

The stores are to be delivered to.................................free of incidental charges, on 

Purchase Orders issued by this department. This document should not be treated as an order to deliver stores. 

Reqn. or Contract Estimate statement and Item No. P.L. No. Tender No. Description size & quality of articles ordered Total qty. likely to be required Rate in words  & figures Unit for rate Delivery as & when reqd. between
               

On office copy only.                                                                                                                                               Name of Depot............. 

Purchase distribution...... 

Excess stock distribution.

 *Here fill in nature of rate contract such as 'Flat,' 'Running,' & c. .................................................... 

                                                                                            Controller of Stores 

(or when signed by any officer 

authorised   for   the purpose the actual 

designation of the officer to be shown)

 for and on behalf of the President of India.

630.    Three copies of the above form will be prepared and distributed as follows : 

1 st foil.........................................................Office copy 

2nd foil...................................................will be sent to the Inspecting Officer. 

3rd foil..........................................................will be sent to the firm. 

631.     Deleted. 

632.    The Main and Subsidiary Depot.—The Main depot is responsible for arranging required stock from the Controller of Stores and distributing the same to the Subsidiary Depots. In the procedure outlined in this chapter 'Depot' means a main depot only, who will submit annual estimate sheet/recoupment sheet to the COS' office.

The subsidiary depots only keep a watch on their stocks and as soon as the stock of an item has depleted to the level of the minimum quantity, demands are promptly placed on the main depot. 

633.    Deleted. 

634.    Deleted. 

635.     History-cum-Rate Card.—An index card should be maintained in COS'office for each stock item. This card should be kept by the purchase section dealing with the item. This card gives a complete history of past procurement and also gives the position of all the current dues, covered as well as uncovered. 

The position card would normally contain the following information. It can logically be divided into two portions.— 

(a)   Details of the stock item and past consumption & 

(b)   Details of dues and past purchases. 

(a)  Details of the Stock Item and its Past Consumption.— 

1.     PL Number 

2.     Brief Description 

3.     Unit 

4.     Specification number 

5.     Drawing number

6.     Name of central agency—in case of centrally procured items only. 

7.     Date of submission of                                                   -do- 

indents. 

8.     Estimated annual requirement 

9.     Maximum/Minimum 

10.    Annual consumption year wise and depot wise consumption should be recorded. 

(b)  Details of Dues and Past Purchases.— 

1.     Depot's demand No./Indentor's Requisition No. 

2.     Quantity 

3.     Purchase Case No. 

4.     PO No. or A/T No. and date 

5.     Firm's name 

6.     Quantity 

7.     Rate

8.     Unit 

9.     Delivery period 

10.     Details of despatches & depot's receipts 

11.     Remarks. 

636.    Guidelines for filling-up 'History-cum-Rate Card'.—It will be observed that the card acts as a ready reference for the Controller of Stores as regards the particulars of rates and types of contracts placed. For any desired period the consumption of the item is also available depotwise as well as for the entire Railway. The position of the current dues is available including balance quantity still to be supplied by the firms. Care should be taken in filling up this card accurately and keeping it up-to-date. 

The procurement is normally initiated on depot's demand, namely annual estimate sheet or recoupment sheet. However, in exceptional cases a requisition from the indentor may also be processed for direct procurement. 

The purchase case No. is the basic reference point. While advising the depot of the action taken on their demand (para S-613 & S-617), the case No. should invariably be communicated, so that the depots can find out current position of their dues from COS' office without any difficulty. 

Despatch advises received from the firms should be promptly recorded. R.O. No. of the Receipt Note issued subsequently by the depot after receipt of materials should also be recorded. 

The actual consumption of the depots from year to year should be carefully recorded in the card. This information is available from annual estimate sheet/recoupment sheet submitted by the depot. 

637.    Deleted. 

638.    Deleted. 

639.    Deleted. 

640.    When there is more than one current contract for an item of stores on account of railways' requirements having been divided between two or more firms, a watch should be exercised to see that a disproportionate quantity is not drawn inadvertently from any of the firms. 

641.    Deleted.

 PERMANENT WAY MATERIALS 

642.    Arrangements for purchase of permanent-way materials.—Unlike other kinds of stores, the estimate of permanent way materials to be purchased or manufactured by the railway workshops in the ensuing year will be made by the Chief Engineer as laid down in paragraph 643 to 645. 

643.    A forecast, of all permanent-way materials required for the ensuing financial year should be made. On this forecast depends the guarantee of a sufficiency of stocks to meet the likely demands. The forecast is best made by extracting the average annual consumption for the last three years, separately for open line, special works, ordinary maintenance, &c, from the daily reports of materials issued (S. 1333) striking the average for one year and correcting it in the light of any special circumstances likely to affect the estimate for the ensuing year. To this corrected average should be added the figures for the renewal and construction programme for the ensuing year and a percentage allowance for a small reserve. This total should then be compared with the estimated available stocks in the permanent way depots on the 1st of April of the ensuing year and the difference would yield a fairly close estimate of the material to be purchased (or manufactured). Other arrangements for the advertising or calls for tenders and the letting of contracts by the Administration or of placing of indents on the Railway Board should be made on the same lines as for other stores.   Agreements for the supply of permanent way fittings should contain a clause to the effect that the railways will have the option to vary the total quantity to the extent of 10 per cent. 

644.     Items procured through Railway Board.—Indents for centrally procured items will be submitted to the Railway Board as per the time-table fixed by the Board. The following items are being procured centrally:  

1.   Rails 

2.   Sleepers—All types namely steel, cast iron, concrete and wooden. 

3.   Fish-plates 

4.   Points and crossings. 

5.   Track machineries and Plants 

6.   Development Items 

The list of development items as well as other items for which indents are to be submitted to the Railway Board is decided from time to time by the Railway Board and Railways are advised accordingly. 

645.    Items procured by the Railway.—All items other than the centrally procured items will be purchased by the Zonal Railway directly, following the normal procedure for procurement of stores. 

646.    Deleted.