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Vendor Registration in Ordnance Factories.
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In Ordnance Factories purchases & works in r/o stores, plant & machinery and civil works is required to be carried out for the smooth functioning of the production process and the factory so as to achieve the production targets within the stipulated time. For this, the purchases and contracts are to be made at the most competitive price keeping in mind that the factory gets the right quality of material, right quantity of material at the right price and at the right time. In other words, the purchaser should be crystal clear about the sources that are capable of supplying the stores and completing the assigned work within the stipulated time and at the most competitive price. Thus the reliability of the supplier/firm is a crucial factor in making tender decisions. Keeping this in mind the purchaser i.e. the factory needs to have a fair idea of the technical and financial capability and reputation of the supplier/firm.
In pursuance of the above objectives OFB had prepared an SOP for vendor development, capacity verification, vendor registration and vendor rating in ordnance factories. Procedure for registration of firms Firms that intent to get registered with Ordnance Factories shall apply to the factory in the prescribed form called “Vendor Requisition Request Form” i.e. VRRF. Based on the information furnished by the firms classification of the firms will be done by a multi functional team of Gr. A Officers from Quality, Production, Material Management and Finance Function. Firms qualifying will then be required to go through a process of physical capacity verification by a team of officers. The team shall verify the facts as furnished by the firms in their VRRF and allocate marks and rating in “Vendor Quality Survey Report”.
After capacity verification the grading of the firms shall be done on the basis of guidelines and numbering scheme. In addition to grading, vendors will be assessed for categorisation depending on their infrastructures and capability for one or more type of activities like design, development and production. After vendor assessment and approval of recommendation to register of firms in the compendium of approved supplier by the accepting authority, a registration certificate valid for three years shall be issued. The accepting authority for registration is the GM of the factory .The charges of registration for large and medium scale industries is Rs. 5000/- and for small scale firms is Rs. 2000/-. For in-depth study of the above procedure, a copy of the ..\Desktop\Presentation Vendor Registration\SOP on Vendor Registration by OFB.docSOP issued by the OFB for Capacity Verification and Vendor Registration is enclosed for ready reference.
Audit Views : It is being noticed that in some ordnance factories a firm is being registered under the different names for the same type of items. The owners of these firms are registered under different names thereby resulting in cartel formation and defeating the very purpose of healthy competition & getting competitive rates.
Methodology to be adopted: To check such irregularities and practices the IA Cells have to carry out a study on registration of vendors in their respective factories. The methodology to be adopted is suggested below: It should be checked whether the vendor registration is being carried out by the ordnance factories as per SOP laid down by the OFB. Whether the list is being updated every year based on the past performance of the vendors. Vendors that are registered for stores, job works, civil works and other equipments may be included in this study. The details in r/o the vendors registered in a factory relating to above works is available in Provision/Material Management and Engineering Office Sections of the factory. The details of vendors registered for different works in a factory may be obtained in the format annexure-A/1 from the factory management in shape of soft copy in the excel format.
After getting data same should be sorted by address or phone number and VAT number-wise. The purpose of this exercise is to trace the firms with same owner but registered under different names. The data should be further verified from the supporting documents relating to the registered firm available with the factory management to verify the authenticity. During verification more stress should be given to find out whether different firms having same address, phone no, Fax no., email-ID, PAN no., VAT/CST no. to highlight different firms with same owner. If above type of irregularity found during audit verification, copies of related document should be obtained from the factory management for record. The purchases made from such firms should be examined with reference to CST and the rates at which purchases have been made. This data can be obtained from the computer file on Supply Orders from the EDP centre of the Accounts Office attached with the factory as well as in PPC package of the factory management. Audit objection may be raised on Cartel formation. The fees charged for registration should be deposited with the government account.
Note : It is requested that no raw data may be forwarded to this office. The review and analysis of the data may be done at your end and the requisite format Annexure-A enclosed with this letter be duly filled forwarded to Main office along with a copy of the objection raised for further necessary action.
Blacklisting / Banning of business dealing with firms/contractors in Ordnance Factories
As per Para 9.5 to 9.6.2 of the material management the guidelines for banning of the firms have been laid out. A copy of the same is enclosed for ready reference. In view of audit it may be possible that some factories may have issued tender inquiry and subsequently supply order to the banned firms. In this regard the requisite data may be obtained from the Provision/MM/EO Section of the factory management and the material section of the LAO. It should also be checked whether the OFB and other Factories are being informed about the banned firms. Requisite data may be obtained from the Provision/MM/EO Section of the factory management and the material section of the LAO.
