DULIAJAN [GM(COMMERCIAL) OFFICE] Ref. GM(COM):02/01-478 August 14, 2015 All Executive Directors All Group General Managers All General Managers All Heads of Departments Heads of C&P Functions of All Spheres Sub : Guidelines for Procurement from Micro and Small Enterprises (MSEs) 1.0 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, has notified the Public Procurement Policy, 2012 with effect from 1 st April, 2012 in respect of procurement of goods and services, produced and provided by Micro and Small enterprises, by its Ministries, Departments and Public Sector Undertakings (Classification of MSME attached as Annexure-I). The policy of overall procurement goal of minimum of 20 percentfrom MSEs has become mandatoryfrom 1 st April 2015. 2.0 Competent Authority of OIL, vide Proposal No. MM/MSE/42 dated 09/07/2015 has approved the guidelines to be followed in this regard as under: (a) OIL shall set an annual goal of procurement from MSEs with the objective of achieving an overall procurement of minimum of 20 percent of OIL s annual value of procurement of goods or services from Micro and Small Enterprises; (b) The Public Procurement Policy shall apply to Micro and Small Enterprises registered with (i) (ii) (iii) (iv) (v) (vi) (vii) District Industries Centers or Khadi and Village Industries Commission or Khadi and Village Indutries Board or Coir Board or National Small Industries Corporation or Directorate of Handicrafts and Handloom or any other body specified by Ministry of Micro, Small and Medium Enterprises. (c) Out of 20 percent target of annual procurement from Micro and Small Enterprises, a sub-target of 20 percent (i.e. 4 percent out of 20 percent) 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 requirement and L1 price, 4 percent 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. Cont d...2
Page...2 (d) OIL shall report goals set with respect to procurement to be met from Micro and Small Enterprises and achievement made thereto in the Annual Reports. Annual goal of procurement shall also include subcontracts to MSEs by large enterprises and consortia of Micro and Small Enterprises formed by NSIC. A clause in this regard is required to be incorporated in the tender / contract Terms & Conditions that whenever any supply / job is subcontracted to MSEs or consortia of MSEs formed by NSIC, same shall be immediately informed by the contractors and the same will be suitably recorded in the file and SAP records against those contracts. If required, a vendor record will be created for the purpose of information only. (e) Purchase Preference : Micro and Small enterprises will be allowed to participate in all tenders invited by OIL subject to production of valid Registration Certificate for the tendered items for which MSEs intend to quote.participating Micro and Small Enterprises quoting price within price band of L1+15 percent and qualifying the BEC/BRC criteria of the Tender shall also be allowed to supply a portion of requirement by bringing down their price to L1 level in a situation where L1 price is from other than a Micro and Small Enterprise and such Micro and Small Enterprises shall be allowed to supply up to 100 percent of total tendered value. This process will help OIL to achieve the overall procurement target of 20% from MSEs. In case more than one such Micro and Small Enterprises are eligible for the order, the supply shall be shared proportionately (to tendered quantity) and equally (to the extent possible) among the eligible MSEs on case to case basis. In case, the tendered quantity cannot be split or ordered on more than one supplier, the same needs to be specified in the Tender/PRs. (f) OIL 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.efforts will be made to conduct Special Vendor Development Programmes or Buyer-Seller Meets for Scheduled Castes or Scheduled Tribes.MSEs would be advised to regularly visit the tender website of the procuring agencies for information on latest tenders. Names and addresses of such MSEs situated at the nearby locations of OIL offices can be obtained from NSIC, New Delhi or downloaded from official website of NSIC www.nsic.co.in/memberdisp.asp and also from a link appearing as B2B web portal in the aforesaid official website of NSIC. Further, whenever invitations are received from NSIC/Ministry of MSME for participation in the workshops/buyer-sellers meets organized by them, representative(s) may be deputed by OIL offices to attend the same. Cont d 3
Page...3 (g) OIL shall prepare Annual Procurement Plan for purchases and upload the same on the official website in the month of April so that Micro and Small Enterprises may get advance information about requirement of procurement agencies. (h) Micro and Small Enterprises shall be facilitated by providing them tender sets free of cost and exempting from payment of earnest money for the items they are registered with the authorities as detailed in Para 2(b) above. As the policy has no provision for exemption of Performance security, the same shall have to be submitted by the MSEs. (i) Reservation of specific items for procurement As per the Public Procurement Policy, 358 items have been reserved for exclusive purchase from MSEs. OIL has tentatively identified 37 relevant items (list attached as Annexure-II) which are required for its operations. The list may be may be expanded in due course depending upon the requirement and guidelines issued by Govt of India from time to time. Irrespective of the value of the requirement for these 37 items, as and when required, same will be procured from MSEs by inviting limited tenders among them as per existing guidelines. Complete details in respect of such tenders shall also be published on OIL s tender website giving other MSEs whom tender enquiries has not been sent an opportunity for participating in the tenders in line with existing provisions for regular limited tenders. Details with respect to names and addresses of MSEs manufacturing required items shall be obtained by the Indenting departments from the official website of NSIC www.nsic.co.in/memberdisp.asp and the link appearing as B2B web portal at the official website of NSIC for providing the same along with PRs. In PRs for reserved items, indenting departments will mention that the item(s) is/are reserved for procurement from MSEs only. In case none of the MSEs participate in such tender, the procurement of these items shall be done by following normal tendering procedure. (j) The Public Procurement Policy shall not be applicable for LSTK contracts. (k) In case the annual goal is not met, a report will be required to be sent by OIL to the Review Committee headed by Secretary (MSME) constituted in Ministry of MSME, substantiating with the reasons for not meeting the goals. (l) IT department shall create a link on OIL s official tender website of OIL, wherein OIL s annual plan of procurement of goods / services that can be awarded to MSEs, a system for online redressing the grievances of MSEs and other information for MSEs etc., shall be available. Cont d...4
Page...4 3.0 The proposed Tender Terms and conditions/bec to be incorporated are attached as Annexure III. 4.0 All spheres are requested to provide the requisite information to the undersigned being the Nodal officer with respect to all issues related to MSEs. 5.0 All are requested to be guided accordingly. COPY : CMD D(F) D(E&D) D(HR&BD) D(O) RCE ----------------------------------------------------- GENERAL MANAGER(COMMERCIAL)
Annexure - I Classification of Micro, Small and Medium Enterprises (MSME) : Goods : (i) In the case of the enterprises engaged in the manufacture or production of goods pertaining to any industry specified in the First Schedule to the Industries (Development and Regulation) Act, 1951, as (a) (b) (c) A micro enterprise, where the investment in plant and machinery does not exceed twenty five lakh rupees. A small enterprise, where the investment in plant and machinery is more than twenty five lakh rupees but does not exceed five crore rupees, or A medium enterprise, where the investment in plant and machinery is more than five crore rupees but does not exceed ten crore rupees. Services : (ii) In the case of the enterprises engaged in providing or rendering of services, as (a) (b) (c) A micro enterprise, where the investment in equipment does not exceed ten lakh rupees. A small enterprise, where the investment in equipment is more than ten lakh rupees but does not exceed two crore rupees, or A medium enterprise, where the investment in equipment is more than two crore rupees but does not exceed five crore rupees.
Annexure II Tentative List of items selected for Purchase from Mico& Small Scale Industrial Units Sl. Sl. No. at the List Description No. of Items 1 23 Bolts & Nuts 2 149 Hinges 3 197 Pad Locks of all types 4 320 Washers all types 5 334 Wires nails and Horse shoe nails 6 36 Brushes of all types 7 35 Brooms 8 172 Linseed Oil 9 136 Hand Gloves of all types 10 147 Helmet Non-Metallic 11 123 Garments 12 244 Sanitary Plumbing Fittings 13 201 Pans Lavatory Flush 14 293 Taps 15 61 Cloth Sponge 16 294 Tarpaulin 17 177 Machine Screws 18 163 Lamp Holders 19 96 Distribution Board up to 15 amps 20 105 Electric call bells / Buzzers / Door bells 21 122 Fuse unit 22 113 Expanded Metal 23 13 Barbed Wire 24 333 Wire Fencing and Fittings 25 335 Wire nettings of guage thicker than 100 mesh size 26 46 Ceiling roses upto 15 amps 27 224 PVC insulated Aluminium Cables (upto 12 sq. mm.) 28 237 Rubber Hoses (Unbranded) 29 212 Plugs & Sockets electric upto 15 amp 30 107 Electric transmission line hardware items like steel cross bars, cross arms clamps arching horn, brackets, etc. 31 53 Chokes for light fittings 32 9 Automobile Head Lights Assembly 33 27 Boots and shoes of all types including canvas shoes 34 223 PVC Pipes up to 110 mm 35 95 Disinfectant fluids 36 317 Valves Metallic 37 202 Paper conversion products Paper bags, envelope, ice cream cups, paper cup & saucers, paper plates & Photocopy paper ** **Ministry of MSME, vide Circular 21(6)/2014-MA dt. 28.11.2014 included Photocopy paper under Srl. No. 202.
ANNEXURE III 1.0 Documentation Required to be submitted by MSEs : Copy of valid Registration Certificate, if bidder is a Micro or Small Enterprises (MSE) registered with District Industry Centers or Khadi and Village Industries Commission or Khadi and Village Industries Board or Coir Board or National Small Industries Corporation or Directorate of Handicrafts and Handloom or any other body specified by Ministry of MSME. The Registration Certificate should clearly indicate the monetary limit, if any and the items for which bidder are registered with any of the aforesaid agencies. In case bidding MSE is owned by Schedule Caste or Schedule Tribe entrepreneur, valid documentary evidence issued by the agency who has registered the bidder as MSE owned by SC/ST entrepreneur should also be enclosed. 2.0 Purchase Preference Clause in BEC of ICB/Indigenous Purchase tenders : Purchase preference to Micro and Small Enterprises registered with District Industry Centers or Khadi and Village Industries Commission or Khadi and Village Industries Board or Coir Board or National Small Industries Corporation or Directorate of Handicrafts and Handloom or any other body specified by Ministry of MSME : In case participating MSEs quote price within price band of L1+15%, such MSE shall be allowed to bring down their price to match L1 price in a situation where L1 price is from someone other than a MSE and such MSE shall be allowed to supply 100% of tendered value at the L1 price. A sub-target of Min. 20% (i.e. 4% out of 20%) has been earmarked for procurement from MSEs owned by the SC or ST entrepreneurs. Provided that, in event of failure of such MSEs to participate in tender process or meet tender requirement and L-1 price, 4% sub-target for procurement earmarked for MSEs owned by SC or ST entrepreneurs shall be met from other MSEs. In case of more than one such MSE qualifying for 15% purchase preference, the 100% supply shall be shared equally amongst such MSEs. However, in the opinion of OIL if tendered items are non splitable or non-dividable, OIL reserves the right to place order for supply of 100% quantity to lowest eligible MSE amongst the MSEs qualifying for 15% Purchase preference. In case any part of the order is sub-contracted to a Micro or Small Enterprise as per contract conditions then the supplier shall provide complete details (i.e. name of the subcontractor, value of sub-contacted work, copy of valid MSE registration certificate etc.) of the subcontractor to OIL. 3.0 Purchase Preference Clause in BEC of ICB/Indigenous Service Contract tenders : Purchase preference to Micro and Small Enterprises registered with District Industry Centers or Khadi and Village Industries Commission or Khadi and Village Industries Board or Coir Board or National Small Industries Corporation or Directorate of Handicrafts and Handloom or any other body specified by Ministry of MSME: In case participating MSEs quote price within price band of L1+15%, such MSE shall be considered for award of contract by bringing down their price to L1 price in a situation where L1 price is from someone other than a MSE.
In case of more than one such MSE qualifying for 15% purchase preference, the contract shall be awarded to lowest eligible MSE amongst the MSEs qualifying for 15% purchase preference. In case any part of the work is sub-contracted to a Micro or Small Enterprise as per contract conditions than the contractor shall provide complete details (i.e. name of the subcontractor, value of sub-contacted work, copy of valid registration certificate etc.) of the sub-contractor to OIL.