• Techno-commercial aspects of

materials:-
• Inviting quotations from vendors,
comparative statement. Collecting samples
of materials and testing. Vendor selection
criteria. Concept of method control
statement involving use of materials.
• Acceptance criteria and tolerances.
 •Need for
Tender/Quotation
Classification of Procurement
1. Procurement of Goods
and Materials
2. Procurement of Services
3. Procurement for Works
Methods of Procurement
1. Direct Purchase i.e. without
quotation/tender
2. Procurement by inviting quotation

3. Procurement by inviting tender

/bid
Procurement without tender/
quotation
Purchases upto Rs. 10,000.00 may be
made without any tender or
quotation. The purchasing authority
shall certify that the purchase has
been made at reasonable market price
in cases of purchase from the open
market without tender / quotation.
Publication
For Tender Value of Rs. 50 lakhs and
above, e-tendering through the
centralized e-tender portal,
wbtenders.gov.in is mandatory in
addition to publication in print
media.
Quotation
• Quotation implies a fixed price offer given to the
customer as a response to the tender notice.
• It has a legal binding, which when accepted by
the customer, cannot be changed.
• It is not exactly same as tender, which is a
response to an invitation to tender, submitted by
the prospective supplier.
• The quotation may be understood as a formal
document of promise, given by the prospective
supplier, to supply the stated goods or services
needed by the buyer at the stated price under
specific conditions.
• It comprises of terms of sale, payment and
warranty, which includes the price decided to
charge for the product or service, date, time and
place of delivery, validity period of quotation.
• Quotation helps the buyer in knowing the cost of
goods or services, before making a purchase.
• In order to obtain the quotations (i.e. price for
the required material), generally, tenders are
floated by the government enterprises.
Tender
• Tender is nothing but a response to an invitation to
offer to provide product or services at quoted prices
and specified quality, but subject to specific
conditions.
• Tender is like a competition for a contract, where
various prospective suppliers are requested to
submit tenders, containing the price and quality of
the material required.
• The invitation is published in a vernacular
newspaper of the concerned state or country, as it is
a mandatory requirement, to maintain transparency
in their operations.
Comparison
BASIS FOR
QUOTATION TENDER
COMPARISON

Meaning Quotation is a document Tender refers to a

of setting out the process of soliciting
estimated cost, for suppliers, to bid on the
supplying goods or goods or services needed
services or procuring by the buyer.
something.

Response to Request for Quotation Request for Tender

Components Price Price and Quality

Scope Narrow Comparatively Large

Quotation Invitation
• A Request for Quotation Procedure can be
defined as a process whereby a minimum of 3
written quotations are collected from relevant
suppliers.
• If the supplies requested are between Rs 15,000
to Rs 99,999 then open quotes are acceptable.
• However of the supplies requested are between
100,000 to 999,000 in that case only sealed
quotes would be acceptable.
• All written quotations should be either on
supplier’s headed paper or on Organizational
Request for Quotation form (RFQ).
• If an RFQ form is used, it should only be
acceptable if the supplier’s signature and stamp
are in the relevant section of the form.
• Sealed quotations should only be sought from
reputable suppliers or from a list of pre-qualified
suppliers.
• Once quotations have been collected a formal
evaluation process should be completed.
Invitation Quotation Procedure
• The following process should be followed by the relevant
parties:
• Step 1:- Prepare and approve Supplies Request
• Step 2:- Issue RFQ’s to reliable or pre-qualified suppliers
specifying date on which they should be returned.
• Step 3:- Collect a minimum of 3 written sealed quotations,
preferably on supplier headed paper but alternatively on
organizational RFQ’s, signed and stamped
• Step 4:- Complete quote evaluation process
• Step 5:- Place Purchase Order or sign Contract with
supplier
• Step 6:- Goods Delivery Note received from Supplier (not
always the case)
• Step 7:- Inspect Goods and complete organizational
Goods Received Note
• Step 8:- Receive Invoice from supplier and pay
accordingly
• Step 9:- Receive receipt from supplier
• Step 10:- Update Supplier Lists (e.g. New suppliers,
supplier performance) & Price Lists
 •Quotation
evaluation process
 COMPARATIVE STATEMENT OF QUOTATION
Dept. Enquiry Ref. No. dt. due on
Please Note: CHOICE MAY BE INDICATED BY UNDERLINING IN RED PENCIL
Columns 4 to 10 to indicate the firms Name
Sl. No. Description Quanti NAME OF THE FIRMS Special reasons for
ty selecting materials
at a higher rate to
be provided in this
column.
1 2 3 4 5 6 7 8 9 10 11

* Delivery-
Terms * ST/Octrol
* Time required for supply
* Payment terms etc.
I recommend that the Indent/s may be placed on the Firm/s on which the choice has/have been indicated above in
the statement. The reasons for
selection at a higher rate has been indicated in the appropriate column.

Prepared by:
Professor

Department
For Use in Unit IV-A For use of Internal Auditor The indents may be prepared/processed as per
Prechecked choice indicated

Observation/Checked &
Returned
COMPARATIVE STATEMENT
(QUOTATION ANALYSIS STATEMENT)
• a. If the quotations/responses received against
our enquiries/tenders, do not meet basic and
essential requirements they will be summarily
rejected.
• b. All the tenders are to be evaluated strictly on
the basis of the terms and conditions
incorporated in the tender enquiry document and
terms and conditions etc. stipulated by the
tenderers in their tenders.
• c. No new condition should be brought in while
evaluating the tenders.
•
• Details such as validity of the offer, delivery schedule,
submission of EMD, SD, etc. are indicated in the
Comparative statement.
• If the offers have been received containing different
currencies (in the case of imported goods), the entire
quoted price are to be converted into the Indian
currency for evaluation and comparison of offers on
equitable basis, on the tender opening day.
• If this day happens to be a bank holiday, the next
working day will be considered.
• IMPORTANT POINTS CONSIDERED WHILE PREPARING
COMPARATIVE STATEMENTS
• Following points are considered while preparing the
comparative statement as there will have an effect on
the decision making.
• a. Conditional discount offered by the bidders should
not be taken into consideration for comparison.
• b. In cases where the bidders have mentioned about
excise duty: If exempted against our certificate – nil. If
not exempted or for any such reasons – payment of
actual duty to be considered.
• c. details of validity period, delivery period, warranty
period, payment terms, VAT, Octroi etc. as quoted by
the bidders.
EVALUATION OF QUOTATIONS
• 1) Once the Comparative statement is complete as
above, the folder will be sent to indenter for
technical evaluation and further
recommendations.
• 2) Evaluation of tenders shall be done on an
equitable basis and in a fair and transparent
manner considering all aspects in Comparative
statements.
• 3) Justification for rejecting the offer with lower
rates to be provided if order is not recommended.
• 4) Even in cases where the technical/price
comparative statement of offers is prepared by
the user, purchase staff shall check the details and
ensure that the comparative statement is correctly
prepared in all respects before sending the file to
the competent authority/committee for
approval/preparing the order.
Vendor/Supplier selection criteria
Quality, Cost, and Delivery (QCD)
Quality, Cost, and Delivery (QCD)
• The most important criteria in construction
industry is material quality, delivery dependability,
and cost. The most important factor of supplier
selection should be the quality level of the
procurement items.
• Unit price should not be the only criteria in supplier
evaluation.
• Total cost of ownership is an important factor. Total
cost of ownership includes the unit price of the
material, payment terms, cash discount, ordering
and carrying cost, logistics and maintenance costs,
and other more qualitative costs that may not be
easy to assess.
Long-Term Relationship

• Some company will develop long term relationship with

potential supplier.
• This is applicable to the supplier which falls under the
category of high volume of spending and play critically to
the company’s business.
• With this approach, both party need to share their mutual
goals, establish metrics to guide the relationship and
develop a series of ongoing discussion on how issues and
conflicts can be resolved in a mutually beneficial manner
over the times.
• These relationships may also involve joint cost-savings
projects and new product-development efforts.
Financial Stability

• Financial status of the supplier should be carefully

evaluated as its directly affects its ability to serve the
customer.
• Analysis of Credit Reports plays an important roles in
financial evaluation.
• Credit Report contain information about supplier
financial status. Credit report contain information on
the experience, management, and facilities of the
potential supplier.
• A related supplementary procedure is independent
analysis of the supplier’ financial statement.
• The purchasing officer can obtain information
regarding the supplier’s financial stability, pricing
policies, and general operating efficiency by
applying the tools of ratio analysis to the
supplier’s balance sheet and income statements.
Total Quality Performance and
Philosophy
• Supplier quality capabilities can be evaluated by
using the supplier certification programs.
• Certification is about the setting of criteria
regarding of quality levels as demonstrated
through the use of statistical process control and
such elements as process capability studies of a
supplier’s equipment, record-keeping abilities,
and others.
• If a supplier meets some but not all of the criteria,
it may reach a “preferred” status and will remain
on the construction organization’s bidders list.
E-Commerce capability
• The exponential growth of internet use has made the
dream of E-commerce be more realistic.
• Rapid developments in the technology are improving
and provided on-line services very quickly.
• E-commerce adoption has its organisational and
business implications . It is not a magical solution to
revolutionise a business.
• Careful strategic planning and strategies are needed.
In order to succeed in this innovative and unique
medium, it requires a diverse and multidirectional
approach.
• In the construction industry, the potential benefits
are considerable owing to the nature of the business.
• Comparatively, the construction industry is not
performing on par with other business sectors in E-
commerce. However, it is encouraging to see a
number of models and initiatives coming to the
surface to bring traditional construction processes
on-line.
• External internet organisations also see a huge
potential in construction E-commerce.
Standardisation and consolidation of systems is a
major requirement to help support the effective
models and genuine developments.
• Comprehensive and collaborative efforts are required
to make the most from E-commerce in the industry,
and only those models that understand the complex
business of construction will survive.