Railway Accounts Department Examinations

Showing posts with label Stores. Show all posts
Showing posts with label Stores. Show all posts

Monday, November 21, 2022

Option Clause in Stores Contracts

Option Clause in Stores Contracts

Source: Railway Board letter dated 04.03.2022  Click here for download


  • Para 3800 of IRS Conditions of Contract Click for download

  • Applicable for all tenders wherever specifically mentioned in the tender as Special condition.

  • For Fixed Quantity Contracts only

  • The purchaser (i.e., Railways) reserves the right to increase the order quantity by a quantity not exceeding 30 % of the ordered quantity

  • Provision of Minus 30 % Option Clause shall not be inserted in the Tenders.   

  • Minimum Purchase value is Rs. 1.5 Crores  

  • There is no bar to include this clause for below value of Rs. 1.5 Crores, if accrues the benefits to the Railways. 

  • Example: As per contract, the quantity ordered is 100 Nos.  Under this clause, Purchaser has the right to increase up to 130 Nos depending on the requirements.

  •  Same price, same terms & conditions are applicable.

  •  During the currency of the contract including extension period, if any.

  • Before resorting to such an increase, reasonable notice and time should be given to the contractor/supplier.

  • Railways can resort to increasing the quantity, though the contractor/supplier who delivered the ordered quantity has been supplied in full before the last date of delivery.  

  • Approval of Option Clause:  While deciding the acceptability of Tenders/Contracts, the value of +30% quantity will be excluded from the value of Tenders for determining the level of Competency of sanction.   

  • Performance of the firm on whom option is proposed to be exercised should be satisfactory.  

  • Operated only where there is clear demand for additional quantities and benefits accrue to Railways in terms of existing contractual rates being reasonable  or lower than newly opened tendered rates, if available. 

  • Operation of Option Clause: 


  • TC cases - Finance Concurrence is not required. By Competent authority within his powers of Tender acceptance (original quantity plus 30 % under option clause. Operation of plus 30% clause, Finance vetting of modification advice is required. 


  • Non TC cases - Finance concurrence is required -If the value of contract (including plus 30%) is within vetting limit of PO - Purchase Order.


 Key Takeaways:

  1. Plus 30 % only 

  2. Minimum purchase value : Rs. 1.5 Crores

  3. There is no bar to include this clause for below value of Rs. 1.5 Crores, if accrues the benefits to the Railways. 


  1. Same Price and Same conditions 

  1. Applicable to extended date of delivery 


Tuesday, March 30, 2021

Custody Stores

 Custody Stores

  • Consists of items obtained for the Mechanical Dept for the construction of Rolling Stock sanctioned under RSP

  • Received directly by Mechanical Dept.

  • Payments made by the Workshop Accounts Officer

  • Responsibility of proper numerical records of Receipts, Issues & balance are kept by the Mechanical Dept

  • But Responsibility of safe custody of Custody Stores,  by the Stores Dept attached to the Production Unit /Workshop.

  • Periodical check of Stock cards & Material Schedules is exercised by the ASVs with copies of receipts and issue notes received by them. 


  • Debit to the cost to Work in question.

  • Credit to the Purchase Suspense

On Receipt: 

  • Receipt Notes - prepared in 4 foils printed on different color than those in use of Stores Dept for easy identification. 

  • Distribution of 4 copies

  • 1st copy  -  Office copy

  • 2nd copy - Firm (who supplies the stores)

  • 3rd copy - Workshop Accounts Office 

  • 4th copy - Workshop Progress Office ( as an intimation that stores can be drawn when needed, when the particulars of receipt of stores are entered on the copy of Material Schedule. 

On Issue: 

  • Authority: Pink Issue tickets/Pink Workshop Issue Notes signed by the Supervisor. 

  • 4 copies

  • 1st copy - Office copy

  • 2nd, 3rd & 4th  -  Sent to DMS/DSK who checks them with Pink Issue Ticket, sign all 3 copies and return 3rd and 4th to Workshop SSE and retain 2nd copy as Stores Dept copy

  • 3rd copy - Mechanical Dept

  • 4th copy - Accounts Office. 

Note: However, due to computerization (iMMS), the above procedure may be simplified/customised accordingly.


Sunday, February 28, 2021

GeM – Government Electronic Marketplace

GeM – Government Electronic Marketplace

Source:  https://gem.gov.in/



·         Launched on 9th August, 2016

·         for procurement of Goods and Services

·         By Ministry of Commerce

·         National Public Procurement Portal

·         Public procurement amounts to 15-20% of a nation’s GDP.

·          Transforming DGS&D – Director General of Supplies & Disposables to a digital e commerce portal. 

·           Adding New Rule No. 149 to GFR – General Financial Rules, 2017  - Procurement of Goods and Services by Ministries/Depts will be mandatory for Goods and Services available on GeM.

·         Rating to Buyers and Sellers

GFR - General Financial Rules, 2017



·         Railway Board vide it's letter No.2017/ F(X)II/PW/R dated 09.02.2018 advised all concerned to refer the rules under the GFR- General Financial Rules, 2017 and used them as broad principles while making financial decisions.  


·         Indian Railways being part of Govt of India, it is incumbent on Indian Railways to refer GFR in discharging financial powers.  


·         Any substantive deviation from GFR has become part of reporting through the monthly PCDO by respective PFAs/FA&CAOs to Financial Commissioner/Indian Railways in order to reporting to Ministry of Finance.


·         Issued by Ministry of Finance, Dept of Expenditure.


·         consists of 187 pages and 10 Chapters.


·         GFR first issued were issued for the first time in the year 1947.   These have subsequently modified and issued as GFR 1963 and GFR 2005.


·         The following developments/Reforms/Innovative changes are necessitated revision of  GFR 2005 and brought out GFR 2017.


«  Budgetary reforms like 1) Removal of distinction in non-plan and plan expenditure, 2) Merger of Railway Budget with General Budget  3) focusing on outcomes through an improved Outcome Budget document.


«  Reliance on DBT - Direct Benefit Transfer scheme to ensure efficient delivery of entitlements.


«  Introduction of new e-sites like Central Public Procurement Portal, GeM- Government e-Marketing portal, Non-Tax Revenue portal.



·         To affect an evolution in public procurement promoting a transparent, efficient and inclusive marketplace.


·          Unified procurement policy.

·          Lean, dynamic organization capable of continuous innovation and market driven decision making.

·          Easy to use, Fully automated platform

·         Transparency and efficiency in procurement.

·          Right Quality at Right price.

·         Create Savings for the  Govt by reducing administrative and transaction costs

·         End to end solution

GeM Statistics:

·         Nearly 20 Lakh Products

·         Nearly 1 Lakh services

·         Nearly 11 Lakh Sellers/Service Providers

·         Nearly One lakh Crores Value transactions so far

·         Nearly 15000 Product categories

·         Nearly 200 Service categories

·         MSE share is 60%



·         GeM Special Purpose Vehicle

·         Responsible for operations and maintenance of GeM

·         A Section 8 (Non-Profit) Private ltd Company under the Ministry of Commerce has been incorporated under the Companies Act, 2013

·         To develop, manage and maintain the GeM platform.

·         Autonomous organization

·         It is self-sustain its operations by charging minimum to buyers and sellers.

·         Dr. Anup Wadhawan, Secretary, Department of Commerce and Chairperson, GeM

·         Shri. Talleen Kumar, CEO, GeM










Modes of Buying



Mode of Buying


Up to Rs. 25 K

Direct Purchase

The comparison must be made between

goods/services of at least three different

 manufacturers/OEMs and three different


25 K to 5 L

Direct Purchase L1

5 L and above


This is preferred , even for below

 Rs. 5 Lakhs too. ·

To improve fair participation in Bid / RA,

 GeM now ensures that at least 3 sellers

have participated and offered products

 from at least 2 different OEMs. In case

 buyer wants to proceed with less than

3 sellers or two OEMs/Brand, they

 have to upload approval from Competent




E Bidding

·         The Buyer can split the Bid with MSE Purchase Preference among maximum 5 MSE Sellers. Top 5 MSE price offerings, within L1+15%, would be given an option to match L1 price.

E RA (Reverse Auction)

·         All e-bids and RAs on GeM shall be exclusively completed through the GeM platform with no reference to any outside source or links.







·         What is eRA  - Electronic Reverse Auction in Indian Railways
















(Forward Auction)

a public sale in which goods are sold to the

highest bidder .

One seller, but many buyers.

 Example is Scrap Sales in IR through E-Auction







Reverse Auction

A public Procurement in which goods are

 brought from the  lowest bidder.

One buyer, but many sellers.







Electronic Reverse Auction

An online, real-time dynamic Reverse Auction.

 (in IR - through IREPS)


Advantages for Buyers

1.     Transparency and ease of doing

2.    Offers rich listing of Products for individual category of Goods & Services

3.    Direct purchase for amounts up to Rs. 25 K

4.    Price Trends and Price Comparison From Multiple Suppliers

5.    Direct notifications to sellers

6.     Notification to buyers regarding:

·         expiry of DP (Delivery Period) for the contract

·         Initiation of cancellation of contract in case of non-delivery by sellers

Advantages for Sellers:

·         Access to National Public Procurement market

·         No charges or fee for getting registered

·         Special provisions and sections for startups, MSMEs and Emporium products

·         Fully online, paperless and contactless platform

·         Multiple invoice for single order

·         Easy access to participate in bids/reverse auction

·         Clock has been enabled in RA to display remaining time for seller participation

·         Online grievance redressal mechanism for quick resolution

·         All sellers will be shown reasons for rejection

·         Seller friendly dashboard for monitoring supplies & payments

·         Dynamic Pricing- Price can be changed based on market conditions

·         Direct access to Government departments and their organizations.


Railways and GeM


·         Annual Stores purchases by Railways - Approx Rs. 50,000 Crores (30% -Fuel only)

·         Total staff of Stores Dept - Approx 20 thousands

·         Procurement of common use Goods and Services through GeM is a priority area of Government of India and is being monitored at highest level.

·         Vide OMs under reference, for procurements made under Rule 149 of GFR 2017, buyers are mandated to make payments within 10 calendar days after generation (including auto generation) of Consignee Receipt and Acceptance Certificate (CRAC) in the GeM.

·         Penal Interest - 1% per month of the delayed payment beyond the prescribed timeline

·         Pro rate - If the delay is 10 days, the calculation of penal interest is 10/30 x 1 %.

·         Such penal interest is not paid to sellers, but will be retained by Gem SPV and used the same for training purposes of buyers and sellers.

·         CRAC - Consignee Receipt and Acceptance Certificate

·         Finance Officers of Zonal Railways, PUs and other units shall take an undertaking from the executive officers while vetting the estimates and tender documents that the item/service will be procured through GeM only, if it is available in GeM.

·          The procurement through GeM - seamless integration of GeM, iMMS and IPAS

·         IRS conditions will not be applicable

·         In case of failure of order placed through GeM, the procurement can be made outside GeM and reporting failure on GeM.

·         60:40 splitting, if L2 rate is within 3 % of L1 rate.  Otherwise 65:35



Service Contracts and GeM


·         If Services available on GeM portal, Procurement has to be done through GeM only.     

·         Exception to the above rules is with Specific reasons with justification and Personal approval of GM/DRM is required. 

·           Delegation of Powers to invite and accepting Service Tenders




All other Officers

Full powers

Rs. 100 Crores

(long term contracts)

As per delegation of

Service contracts





Enter Service Contract in place of termination of existing Service Contract:


·          DRMs have full powers .

·          For a period of 3 months only.

·         By calling quotations from approved list of vendors.

·         Finance concurrence required

·           Source: Sl.No.44 of Works Matters of MSOP