The document outlines the key duties and procedures of a purchase department. It discusses conducting market surveys, purchasing materials at low rates, verifying quality before payment, and deducting costs for rejected materials. The purchasing process involves requisitions, calling quotations, comparative statements, purchase orders, inspections, and payments. Tenders and tender notices are used for large purchases and involve timelines, specifications, and earnest money deposits.

1. Duties of Purchase department
• To conduct time to time market survey to
know latest price of material.
• Desired quantity of material has to be
purchased on lowest market rates.
• Purchase officer should have a record of
latest rates of various items.
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2. Duties of Purchase department
• Material should be kept stored so can be made
available in emergency.
• Purchase officer should get the purchase system
approved by senior officer.
• Quality and quantity of material should be
verified from by team of experts appointed by
senior officer before passing order for making
payment to supplier.
• The cost of rejected material should be
deducted from the bill of supplier.
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3. Procedure of purchasing
• Requisition
• Call of quotations
• Comparative statement
• Purchase order
• Inspection of material
• Release of payment as per terms and
conditions
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4. Requisitions
• Demand of various items of material and
quantity from various departments.
• List of items with complete specifications and
quantity required.
• List is to be submitted on a form called
requisition form.
• Requisition form is then send to purchase
department.
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5. Call of Quotations
• After receiving requisition from various departments,
purchase department issues letters to several
registered suppliers for calling rate list.
• Issuing registered postal letters to various reputed
suppliers for their competitive rates is called ‘calling
of quotations’.
• The quotations are called in two ways.
1. By issuing individual letters by register post letters
to suppliers which is called “Limited Tender”
2. By news paper advertisement which is called
‘Tender Notice’ & a “Public Tender” or “Open
Tender”.. 5

6. Tender
• It is an offer made by the supplier or manufacturer
in reply to quotation letter for supply of material
on the basis of some terms & condition .
• Some money is deposited along with the tender is
called Earnest Money Deposit (EMD)
• The earnest money is the guarantee by the
tenderer that the party is bounded to supply the
material if its tender is found to be competitive but
on pre-determined conditions only.
• The earnest money is sometimes called ‘security
deposit ’.
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7. From
Purchase Manager,
XYZ
To,
Calling quotation
PQR pvt. LTD
Apna road,
new city.
Memo No. Q/AC/07/04
Dated: 30/07/2004
Subject: Quotation.
Dear Sir,
You are requested to please send your lowest quotations & intimate the terms of
payment & delivery period on our own terms & conditions.:
1. The last date for receipt for quotation will be 20/07/2011.
2. The quotation will be valid for 2 months from the date of issue of this letter.
3. Please submit the bill in duplicate for the cost of material supplied along with
the material.
4. The payment of bill will be made within one month from the date of
receipt of material in good condition.
5. The material will be supplied by you exactly according to the
specifications given.
6. The envelop containing quotations will be subscribed as ‘Quotation’.
Sr.No. Description of material Quantity required
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1. Moving Iron voltmeter(0-230V)
20Nos .

8. Call of quotations
• Open tenders are preferred when quantity &
cost of material to be purchased is more.
• For small purchases ,the rate list is called
from suppliers through registered letters.
• Some emergency purchases are made directly
by the purchase officer after collecting
quotations from local suppliers personally, are
called “Short Tenders”. 8

9. Opening the tenders or quotation
• Tenders or quotations are received before the last
date for receipt of quotations.
• The tenders or quotations are registered in the
receipt register maintained in the office.
• Tenders or quotations are opened by a committee of
3 responsible officers in the presence of suppliers or
their representatives on the date & time mentioned
in the quotation letter.
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10. Opening the tenders or quotation
• To ensure that there is no change of rates after
opening the tender/quotations, the committee of
purchase officers put their signatures on each page
of tender/ quotations.
• Another entry to be made on each tender/
quotations is that the serial no. of quotation opened
out of the total no. of tender/quotations received in
the office.
• This should be clearly written on each page of the
tender/quotations & entry circled. If first quotation
out of 10 is opened, it will be marked 1/10 in circle.
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11. Comparative statement
• After opening the tender/quotations, the
purchase clerk prepares a comparative
statement on a form.
• There should be at least three quotations for
issue of supply order.
• The lower rates are marked with red ink for
clear identification.
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12. Comparative statement
Name of office of purchase officer: ___ Date: ____
Quotation Notice No. _______ Date of opening: _________Time:___
Approved Requisition No. ____
No. of suppliers to whom Quotation letters sent_
No. of suppliers offered Quotations________
Sr. Full Qty M/S M/S M/S M/S M/S Recomm
No specifications Reqd. ___ ___ ___ ___ ___ endations
. of items
1.
2.
3.
Name & designation of Name & designation of Chief purchase officer
Person who prepared inspection officer
the statement
_______________ ________________ ______________ 12
Signature Signature Signature

13. Purchase order
• After the approval of quotation if the purchase officer has
to place orders for large scale purchases, then the
purchase order should get approved by the administrative
officer & accounts officer so that funds are made available
before issue of supply order.
• The supplier selected above is issued purchase order for
supply of material strictly as per quotations offered by the
party on terms & conditions laid down on the quotation
form.
• If the supplier fails to supply the material or violets the
terms & conditions, the earnest money deposited by13the
supplier is forfeited.

14. From
Executive engineer,
PQR electrical department
Purchase order
Mumbai(Maharashtra)
Memo No.______
Dated: ____
To,
M/S _______companies,
Mumbai.
Sub: Purchase order for supply of material to PQR Elect. Dept.
Sir,
Reference your quotation letter No.___dated___.The rates offered by your firm
have been found to be minimum & the terms & conditions offered by your firm
have been accepted. Kindly supply the following material on terms &
conditions already agreed upon.
Sr. Full specifications of Quantity Rate Total Remarks
No. items Reqd. Amount
Copies send to: 1.
2.
1. Store in charge 3.
2. Accounts branch
3. Requisition officer ___________________
4. Security officer of dept. Signature 14
5. Copy for purchase officer Executive Engineer

15. Tender Notice
• It is the information to be made available for certain
heavy purchases through the news papers.
• Tender notice is given in all major news papers in the
region.
• The tender notice is given for large scale purchases or
for purchase of costly equipment.
• It contains :
– information of material to be purchased,
– its approximate cost,
– quantity,
– last date for receipt of sealed tenders,
– tender form &
– Details of EMD.
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16. Tender Notice
• The tender form contains every information (as given in
tender notice) & completes specifications of shape, size,
rating & other relevant information about the material
to be purchased. The drawing is supplied where it is
necessary.
• It also contains the terms & conditions of supply.
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17. Guide lines for inviting Tender
• The tenders are invited on tender form
prescribed by the purchase department.
• Once the tender notice is published in news
papers, the changes if any are also got published
in the same news paper.
• These changes firstly approved by the purchase
officer.
• The sealed tenders are invited publicly through
news paper.
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18. The tender notice should have following
information mentioned clearly
• On what dates & timings the work site or further details
of purchases can be seen & examined by the supplier,
the offices where tender forms are available, the
amount of EMD .
• The date, time & place where tenders are to be
opened.
• The amount of earnest money, security deposits, & the
mode of deposit i.e. by bank draft or cheque
• The officer is authorized to accept, reject or open the
tender.
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19. Guidelines for inviting Tender
• For heavy purchases, the suppliers should be given at
least one month’s time from the date of issue of tender
notification to file their tenders.
• All tenders for the concerned work should be opened in
the presence of contractors by the officer officially
authorized by the department on the date & time as
mentioned in news paper notification.
• The EMD of unsuccessful contractors should be
returned at the earlier or probably on the same day.
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20. Guidelines for inviting Tender
• Normally the tender offering lowest rate is
accepted
• Tender with partial or no EMD can be rejected
• Tender with lowest rates but poor track record
(official) can be rejected.
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