EMD AND SD IN STORES CONTRACTS

EMD AND SD IN STORES CONTRACTS

Authority : 1)2018/TRANS CELL/STORES PROCUREMENT dated 02.01.2019  -  Click here

                      2) 2004/RS(G)/779/11/pt dated 27.03.2019   - Click here

EMD – Rates for Stores Contracts

Estimated value of Stores tender	EMD (rounded off to nearest higher Rs.10
Up to Rs. 5 Lacs	NIL
Above Rs. 5 Lacs to Rs. 20 Crores	2 % of estimated value of the Tender subject to maximum Rs. 20 Lacs
Above Rs. 20 Crores to Rs.100 Crores	1 % of estimated value of the Tender subject to maximum Rs. 50 Lacs
Above Rs.100 Crores	0.5 % of estimated value of the Tender subject to maximum Rs. 1 Crore

ü  Offers submitted without EMD shall be summarily rejected.

ü  Automatic online release of EMD of unsuccessful tenderers immediately after finalization of the Tender.  

EMD is exempted in the following cases

1.       Estimated value of Stores tender up to Rs.5 Lacs

2.       MSEs (Micro & Small Enterprises) registered for the Tender item.

3.       Other Railways and Govt departments

4.       Indian Ordinance factories

5.       Railway PSUs (Public Sector Undertakings) and PSUs for the group of items that are manufactured by them.

Exemption from EMD in Stores contracts

ü  Shall be decided prior to issue of Tender for Single Tender, PAC items etc

ü  Suitably incorporated in Tender conditions

ü  Requires personal approval & Finance concurrence as detailed below.

Required	Headquarters	Field units (Divisions, Depots, construction etc)
Personal Approval	Authority competent to accept the Tender based on estimated value thereof, but not below the level of PCMM on case to case basis	Authority competent to accept the Tender based on estimated value thereof, but not below the concerned SAG level (ADRM, CWM, CAO etc) on case to case basis
Finance concurrence is	not required	required

SD – Security Deposit in Stores contracts

ü  10 % of the Contract value, subject to maximum of Rs.5 Crores.  Rounded off to nearest higher Rs. 10.  No ceiling for SD in Global Tenders for procurement of Stores.

ü  Shall remain valid for a period of 60 days beyond the date of completion of all contractual obligations.

ü  Deposit SD within 14 days of issue of LOA – Letter of Acceptance.

ü  No extension of time for submission of SD

ü  The EMD submitted by successful tenderer shall be automatically adjusted towards the SD.  The balance SD amount should be deposited within 14 days of the issue of LOA. 

ü  Otherwise (i.e., Balance SD not desosited), the EMD shall be forfeited and case be dealt with as that of withdrawal of offer by the Tenderer as per extant instructions.

ü  In case of failure by contractor to meet deliveries for any lot, Railways may cancel the contract for default part by forfeiting SD commensurate to that lot.

ü  Risk purchase clause shall not be applicable wherever SD clause is applicable.

ü  Wherever SD clause is not there, Risk purchase will be made as per extant guidelines.

SD is exempted in the following cases

1.       Estimated value of Stores tender up to Rs.1 Lac

2.       Other Railways and Govt departments

3.       Indian Ordinance factories

4.       Railway PSUs (Public Sector Undertakings) and PSUs for the group of items that are manufactured by them.

Exemption from SD in Stores contracts

ü  Shall be decided prior to issue of Tender for Single Tender, PAC items etc

ü  Suitably incorporated in Tender conditions

ü  Requires personal approval & Finance concurrence as detailed below.

Required	Headquarters	Field units (Divisions, Depots, construction etc)
Personal Approval of	Authority competent to accept the Tender based on estimated value thereof, but not below the level of PCCM on case to case basis	Authority competent to accept the Tender based on estimated value thereof, but not below the concerned SAG level (ADRM, CWM, CAO etc) on case to case basis
Finance concurrence is	not required	required

LD – Liquidated damages for delayed supply

ü  0.5 % of the price of stores per week or part of the week of delay

ü  Upper limit – 10% of the value of contract (irrespective of delays)

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Letter of Credit - Most Important Question

LC - Letter of Credit

(Most important question for Expenditure and Stores optional)

·         New initiative in Indian Railways

·         With effect from - 01.04.2018

·          Applicable for supplies/ works, including all service and maintenance contracts

·         letter of credit (LC)  - mode of payment as an option in supply/works contracts to improve transparency and the ease of doing business.

·         Apply for tenders having an estimated value of or above Rs. 10 Lakhs

·         Shall include in tender conditions an option for the contractors to take payment from railways through LC arrangements

·         The incidental costs towards issue and operation of LC shall be borne by the supplier /contractor.

·         SBI - State Bank of India - to assess the value of LC and terms and conditions of LC.

·         The DA - Document of Authorisation will be issued against each bill submitted for payment by supplier/ contractor after exercising laid down checks as per Railway codes and manuals in executive and accounts offices .

·          Accounts Officer responsible for passing claim will issue the DA. issue of they will be captured in IPAS and IREPS to ensure that there is no duplicate payment against the said bill.

·         The introduction of the Letter of Credit (LC) payment method for supply/work contracts will significantly increase transparency and improve the ease of doing business.

·         The Sellers should bear a cost of 0.15 %

oo   How it works:  Flow of Letter of Credit transactions:

1.      SBI issues LC to a Seller

2.      Railways will issue DA - Document of Authorisation to the supplier/contractor for completed work

3.      The supplier /contractor will present the DA to his banker for necessary payment

4.      After release of payment to the supplier/contractor, the banker will send this DA to the Railways' banker (SBI) for release of payment to them

5.      The Railways banker (SBI) will reimburse the supplier/contractor bank, against the original DA issued by railway and the bill of exchange issued by the supplier/ contractor, after verifying the signatures.

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GeM - Government E Marketplace - Article in Hindi

Click below for article on GeM (Hindi) - by Shri Lalan Jee, AA/Baroda House/N.Rly Hqrs, New Delhi

GeM - Hindi

Stores material - By Smt Savitri Mahipati, AFA/Training/Ctara

Stores material - By Smt Savitri Mahipati, AFA/Training/Ctara

Click here Part One     Click here for Part Two

Stores Material - SCR Stores Dept

SCR Stores Dept Study material 

Click here

Stores Accounts - Important questions

Stores Accounts - Important questions

(compiled by Shri Sreedhar, AA/SCR/Secunderabad)

1. ABC analysis

2. Inventory control

3. Stock verification

4. Stock adjustment accounts

5. Purchase accounts

6. Stores suspense

7. LC opening

8. MAC –

9. Computerization of stores accounts

10. Purchase order/ indent/stock and non stock

11. Types of tenders

12. Distinguish late and delayed tender

13. Role of finance member in stores tender committee

14. Purchase policy

15. Survey committee

16. Combined receipt cum issue note

17. EOT

18. Sources of supply

19. How the tender system has ensured the transparency in Govt transactions?

20. Turn over ration

21. LD

22. EMD and SD

23. SFC

24. EAR/AAC Quantity vetting

25. DGS&D and import policy

26. AIC

27. CFI

28. FOR destination

29. Receipt note

30. Lorry challans

31. Surplus stores/ dead surplus

32. Rate / running contract

33. Minima and maxima

Stores - Objective type questions

    

Stores - Objective type questions

Stores Manual of Southern Railway

Click here for 

Stores manual of Southern Railway

JOURNAL/ACCOUNTING ENTRIES FOR SCRAP SALES OF RETURNED STORES

JOURNAL/ACCOUNTING ENTRIES FOR SCRAP SALES OF RETURNED STORES

Codal provisions:

Para 27 of chapter 29 of Stores Code (S-2927)

 Sales (Capital 7140 and 7150).

I.In the case of cash sales, auction sales or sales by tender where the value of material sold by the Railway is received in advance of actual issue of stores, the credit to this account will appear earlier than the debit. The credit will be by debit to 'Cash'.

(So Sales Suspense A/c is always showing credit balance.  Because Credit appear first in Sales Suspense A/c by debiting the Remittance Into Bank A/c (RIB) .

Example : Rails released from CTR (Complete Track Renewal) work - Journal Entries

STAGES/STEPS

I. On receipt of released material at Scrap Depot   - CJV - Capital Journal Voucher

Date	Particulars	Ledger folio	Debit(Rs)	Credit (Rs.)
	Stores in stock A/c  207161-08 -  Dr		100
	To Demand No.16 PH 3100 ( 21-3100) Cr			100
	Credit to work at Book value for the released material by taking debit in Stores Suspense A/c

2. When EMD (Earnest Money Deposit) & BSV (Balance Sale Value) received from the successful bidder  - MCR

Date	Particulars	Ledger folio	Debit(Rs)	Credit (Rs.)
	Remittance into Bank A/c 008677-88 Dr		90
	To Sales Suspense A/c 207142           Cr			90
	On receipt of MCR for EMD/BSV paid by the successful bidder

3. At the time of delivery of material to successful bidder and adjust the difference between Book value and realised value of released materials through Stock Adjustment A/c (SA A/c)    - CJV - Capital Journal Voucher

Date	Particulars	Ledger folio	Debit(Rs)	Credit (Rs.)
	Sales suspense A/c  207142 Dr		90
	Stock Adjustment A/c 20-7185 Dr		10
	To Stores in Stock A/c 207161-08   Cr			100
	On receipt of Issue note for having delivered the material

4. Clearance of Stock Adjustment A/c (SA A/c) by adjusting debit or credit to the Dept/Demand. - CJV -Capital Journal Voucher

Date	Particulars	Ledger folio	Debit(Rs)	Credit (Rs.)
	Demand No.16 –PH 3100 (21-3100)   Dr		10
	To Stock Adjustment A/c 20-7185        Cr			10
	Clearance of SA A/c by adjusting to the Final Head

Left over of journal entries, after cancel out/nullify the Stores in stock A/c, Sales Suspense A/c & Stock Adjustment A/cs one to one i.e., by equaling Debits/Credits

Date	Particulars	Ledger folio	Debit(Rs)	Credit (Rs.)
	Remittance into Bank (RIB) A/c           Dr		90
	Demand No.16 –PH 3100 (21-3100)   Dr		10
	To Demand No.16 –PH 3100 (21-3100)   Cr			100

PS: Candidates are advised to furnish the journal entries wherever required /possible to obtain  good scoring in examination.

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Variety Reduction

VARIETY REDUCTION

·         is nothing but standardization of items/materials.

·         The basic purpose of standardization is to eliminate diversity among items/materials that serve the same purpose and to attain a high degree of uniformity in the manufacture. 

·         is a rationalization of the number of items to be stocked. It achieves by elimination of non-standard and non-rationalized sizes/designs whose demand is very small.

·         enables few items will be purchased in large quantities.

·         It is an essential requirement to any modern mass production economy such as Indian Railways.

ADVANTAGES:

1.       Reducing the Unit cost, because few items will be purchased in large quantities.

2.       Reducing the inventory carrying cost.

3.       Will root out the unneeded and duplicate items.

                                                      *****

Repeat Orders

Repeat Orders

·         When materials are required during a contract period in excess of the quantities contracted for,

·         And such excess is not sufficiently large to justify the invitation of fresh tenders,

·         Then, increasing the quantities suitably under the existing contract is called Repeat Order.

·         However, before placing repeat order, negotiations should be conducted with the supplier for securing the favourable terms.

·         No such Repeat orders to be placed on previously accepted rates obtained on limited or single tenders.  That means, Repeat orders to be placed only in case of open tenders.

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Duties of I.S.A - Inspector of Stores Accounts

Duties of  I.S.A - Inspector of Stores Accounts

1.      To supervise the work of ASV’s working under his control.

2.      To distribute the work evenly among the ASV’s under his control in such a way, to complete the stock verification of stores , T & P in due time.

3.      To make surprise visits to ensure that the ASV’s are actually employed on the duties on which they have been deputed.

4.      To test check the works done by ASV’s wherever considered necessary and furnish Test check report to the Stores Accounts Officer.

5.      To submit Weekly Periodical report to the Stores Accounts Officer of progress made by each ASV.

6.      To attend Auctions where necessary.

7.      Disposal of stock sheets at the earliest and report on the action taken to Stores Accounts Officer.

8.      To overhaul the depot numerical ledgers and accounts of the after completion of Stock verification to see that:

A.      They are maintained in proper order.

B.      They are no unattested corrections or over-written figures in the ledgers and accounts.

C.      Find out any non moving stocks (if any) and bring to the notice of Executives for their disposal.

D.     Investigate the reasons for huge differences between the ground balance and ledger balance of stock items found out during actual stock verification.

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