The document discusses the organization and structure of the Directorate General of Supplies & Disposals (DGS&D) in India. It states that DGS&D is the central procurement organization of the Government of India and is headed by the Director General. It has various wings that handle purchase, quality assurance, shipping, registration, training and consultancy. The document provides details about the scope, functions and territorial jurisdiction of DGS&D headquarters and regional offices. It also discusses the principles of contracts entered into by DGS&D and India's policies around procurement objectives and providing preferences to small scale industries.

1. DIRECTORATE GENERAL OF
SUPPLIES & DISPOSALS
SHRIKANT AKREDDIWAR
MTECH INDUSTRIAL ENGG.
MT14INDO23
DEPARTMENT OF MECHANICAL ENGG
VNIT,NAGPUR
SHRIKANT AKREDDIWAR 1
DIRECT MARKETING
MATERIALS MANAGEMENT

2. TOPICS
1. ORGANISATION AND STRUCTURE
2. PRINCIPLES OF CONTRACT
3. PROCUREMENT OBJECTIVE & PURCHASE POLICY
4. SUPPLY OF SPECIFICATIONS & DRAWINGS
SHRIKANT AKREDDIWAR 2
DGS&D
MATERIALS MANAGEMENT

3. ORGANISATION AND STRUCTURE
1.1 ORGANISATION AND STRUCTURE:
• Directorate General of Supplies & Disposals is the Central Purchase
Organisation of the Government of India headed by the Director General. It
is an attached office under Department of Supply (Ministry of Commerce).
• It comprises of following main wings:
1. Purchase
2. Quality Assurance
3. Shipping- clearance and forwarding
4. Registration
5. Training and consultancy
SHRIKANT AKREDDIWAR 3
DGS&D
MATERIALS MANAGEMENT

4. ORGANISATION AND STRUCTURE
1.2 SCOPE AND FUNCTIONS :
• Purchase and or/inspection of stores for –
i. Central Government Ministries/Departments including their attached and
subordinate offices and Union Territories.
ii. State Governments, Public Undertakings, Autonomous Bodies, and Quasi-
Public Bodies etc.
• To arrange clearance & shipment of stores against contracts placed by the
DGS&D.
• Registration of manufacturers, suppliers, stockists, Indian Agents of foreign
Manufacturers.
• Training Directorate will arrange training for government departments and
Industries in the field of Purchase and Quality Management.
SHRIKANT AKREDDIWAR 4
DGS&D
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5. ORGANISATION AND STRUCTURE
1.3 PURCHASE WING :
• It carries out procurement action for conclusion of rate contracts and ad-
hoc purchases.
• The major procurement work is handled at Headquarters, New Delhi & the
3 Regional Supply Offices at Mumbai, Chennai and Calcutta have been
assigned certain items of R/Cs.
• The indents for ad-hoc items shall be raised by the indenting departments
as per the territorial jurisdiction of each office with following exceptions :
i. Jute and jute products- Centralised at Kolkata.
ii. Coir and coir products- Centralised at Chennai.
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DGS&D
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6. ORGANISATION AND STRUCTURE
• The territorial jurisdiction of the Headquarters office of DGS&D and the
Regional offices are given below.
• Regional Offices at Calcutta, Chennai and Mumbai also arrange clearance of
imported cargo at all major ports.
SHRIKANT AKREDDIWAR 6
DGS&D
MATERIALS MANAGEMENT
Sr. No. Office States/UTs
1 DGS&D , New Delhi J&K, Himachal Pradesh, Haryana, Punjab, UP, Rajasthan, UT of
Delhi & Chandigarh.
2 Dy. DGS&D ,Calcutta Orissa, Bihar, West Bengal Assam Nagaland, Meghalaya, Manipur,
Tripura Arunachal Pradesh, Sikkim, Mizoram, Andaman & Nicobar
Island.
3 Dy. DGS&D,Chennai AP, Karnataka, Tamil Nadu ,Kerala , Pondicherry and Lakshadweep
4 Dy. DGS&D,Mumbai Gujarat, Maharashtra, Goa Dadra & Nagar Haveli, MP and Daman
& Diu.

7. ORGANISATION AND STRUCTURE
1.4 QUALITY ASSURANCE WING :
• It provides technical support to the purchase functions.
Functions :
• Formulation of Inspection Policies and Quality Assurance plans.
• Formulating procurement specifications for contracting.
• Assessment of vendors.
• Registration of firms and suppliers registered as manufacturers, Indian
agents to foreign manufacturers, etc.
• Evaluation and certification of the quality of supplies.
SHRIKANT AKREDDIWAR 7
DGS&D
MATERIALS MANAGEMENT

8. ORGANISATION AND STRUCTURE
Continued....
• Quality Audit of Supplies at consignees end.
• Interaction with indenters and industry in the preparation & up-gradation
of procurement specifications.
• Interaction and active participation with BIS.
• Testing and investigation of failure of Metallurgical products..
• As Information centres in the respective states for closer interaction with
industry and the state governments.
• Export Inspection on behalf of friendly countries.
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DGS&D
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9. ORGANISATION AND STRUCTURE
1.5 SUPPORTING UNITS :
1.5.1 PLANNING AND CO-ORDINATION (P&C) UNIT :
• It deals with policy and procedures relating purchase, quality assurance,
disposal and shipping.
1.5.2 INTERNAL WORK STUDY :
• This unit conducts methods study, staff measurement and keeps watch on
speedy disposal of work .
1.5.3 TRAINING AND CONSULTANCY:
• Training Directorate in consultation with DOPT arranges for training of
DGS&D Officers & other organizations.
SHRIKANT AKREDDIWAR 9
DGS&D
MATERIALS MANAGEMENT

10. ORGANISATION AND STRUCTURE
1.5.4 MANAGEMENT INFORMATION SERVICES (MIS) :
• MIS Directorate acts as operational-cum-intelligence unit maintains the
database of pre and post contract operations.
• The MIS Directorate brings out brochures on DGDS&D purchases, bulletin
on market prices & annual administration report of DGS&D.
1.5.5 PUBLIC GRIEVANCES AND PUBLIC RELATIONS CELL
1.5.6 MARKET INTELLIGENCE CELL (MIC) AND COST CELL :
• MIC gathers and compiles information on suppliers, price, price trends of
various items on R/C.
• Cost Cell functions under the officer in-charge of IF Wing of DGS&D and it
draws expertise from Purchase & Quality Assurance Wing for performing its
duties.
• Cost Cell function is to analyse and work out the reasonable cost by
comparing R/C prices with market prices.
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DGS&D
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11. ORGANISATION AND STRUCTURE
1.5.7. INTEGRATED FINANCE (IF) WING :
• A complement of the officers of the Integrated Finance Wing of the
Department of Supply is posted in the DGS&D.
• This complement includes one Dy.Director (Cost) drafted from the office of
the Chief Advisor (Cost), Ministry of Finance, to advise the DGS&D on
matters of cost fixation of price and formulation of price variation clauses
etc.
1.5.8 LEGAL WING
1.5.9 ADMINISTRATION WING
1.5.10 VIGILANCE WING
1.5.11 LIAISON CELLS :
• Railway & NSIC maintains a Liaison Cell in DGS&D to facilitate proper
interaction with DGS&D in respect of their procurement of items through
DGS&D Contracts.
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DGS&D
MATERIALS MANAGEMENT

12. PRINCIPLES OF CONTRACT
2.1 INTRODUCTION :
• The Contract Manual of DGS&D gives information with regards to the
elements and principles of contract law and meaning of various legal terms.
2.2 ELEMENTARY LEGAL PRACTICES :
What is a Contract?
• The proposal or offer when accepted is a promise, a promise and every set
of promises forming the consideration for each other is an agreement, and
an agreement if made with free consent of parties competent to contract,
for a lawful consideration and with a lawful object is a contract.
SHRIKANT AKREDDIWAR 12
DGS&D
Assent of a person
to a work e.g.
Tender signed by
tenderer
Proposal
or offer
Promise Agreement Contract
Accepted Free consent
Lawful
MATERIALS MANAGEMENT

13. PRINCIPLES OF CONTRACT
ELEMENTS OF CONTRACT :
(a) Competency of the parties.
(b) Freedom of consent of both parties.
(c) Lawfulness of object.
2.3 COMPETENCY OF PARTIES :
• Under law any person who has attained majority and is of sound mind or
not debarred by law to which he is subject, may enter into contracts.
CATEGORIES OF PARTIES ENTERING INTO CONTRACT :
(a) Individuals
(b) Partnerships
(c) Limited Companies
(d) Corporations other than limited companies.
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DGS&D
MATERIALS MANAGEMENT

14. PRINCIPLES OF CONTRACT
2.4 CONSENT OF BOTH PARTIES :
• Chances of misunderstanding relates to –
a) Identity of the other party to the agreement,
b) Nature or terms of the transactions,
c) Subject matter of the agreement.
2.5 LAWFULNESS OF OBJECT :
• The object of an agreement must be lawful (not opposed to public policy).
SHRIKANT AKREDDIWAR 14
DGS&D
MATERIALS MANAGEMENT

15. PRINCIPLES OF CONTRACT
2.6 ACCEPTANCE OF AN OFFER :
• The tender is accepted within given time limits, only if the terms of the offer
and the acceptance are same & lawful.
2.7 WITHDRAWAL OF AN OFFER & IT’S ACCEPTANCE :
• Proposer may withdraw its offer at any time before its acceptance, keeping
informed the accepting authority.
• However some offers cannot be withdrawn before the expiry of the
specified date, for which earnest money is deposited.
SHRIKANT AKREDDIWAR 15
DGS&D
MATERIALS MANAGEMENT

16. PRINCIPLES OF CONTRACT
2.8 DISCHARGE OF CONTRACTS:
• A contract is discharged or the parties are normally freed from the
obligation of a contract by due performance of the terms of contract.
• A contract may also be discharged:-
a) By mutual agreement.
b) By breach.
c) By refusal of a party to perform.
d) In a contract where there are reciprocal promises.
SHRIKANT AKREDDIWAR 16
DGS&D
MATERIALS MANAGEMENT

17. PRINCIPLES OF CONTRACT
2.9 STAMPING OF CONTRACTS :
• Under Article 5 of the Indian Stamp Act, the agreement for sale of goods
(not being sold through a broker) is exempt from payment of stamp duty.
Cases in which government would be liable are set out in Section 29 of the
Act.
2.10 AUTHORITY FOR EXECUTION OF CONTRACTS :
• The DGS&D officers are authorised by the President of India in exercise of
the powers conferred by Clause (I) of Article 299 of the Constitution to
make contracts for services, supply or work on behalf of the Central
Government.
• DGS&D makes similar contracts on behalf of the State Governments , PSUs
& local bodies as per their request.
SHRIKANT AKREDDIWAR 17
DGS&D
MATERIALS MANAGEMENT

18. PRINCIPLES OF CONTRACT
2.11 Governing law in purchases made by DGS&D :
• All purchases made and contracts entered by the DGS&D are governed by
the Sales of Goods Act, 1939 and the Indian Contract Act, 1872.
2.12 General guidelines for entering into contracts by the DGS&D :
• No work of any kind should be commenced without prior execution of
contract documents.
• The terms of a contract must be precise & free from ambiguity.
• Provision for recovery of liquidated damages for defaults on the part of the
contractor.
SHRIKANT AKREDDIWAR 18
DGS&D
MATERIALS MANAGEMENT

19. PRINCIPLES OF CONTRACT
• In selecting the tender to be accepted, the financial status of the
individuals and firms tendering must be taken into consideration in addition
to all other relevant factors.
• Where escalation in respect of labour overheads, customs duties, freight etc
is provided for in a contract, the basis for the calculation of the same should
be clearly indicated.
• Lump sum contract should not be entered into except in cases of absolute
necessity.
SHRIKANT AKREDDIWAR 19
DGS&D
MATERIALS MANAGEMENT

20. PROCUREMENT OBJECTIVE &
PURCHASE POLICY
3.1 PROCUREMENT OBJECTIVE :
The main objectives of public buying are :-
• To procure stores of specified quantity and specified quality.
• To procure stores on a competitive basis at the lowest reasonable price.
• To procure stores with a planned timely delivery.
SHRIKANT AKREDDIWAR 20
DGS&D
MATERIALS MANAGEMENT

21. PROCUREMENT OBJECTIVE &
PURCHASE POLICY
3.2 PURCHASE POLICY :
As per the guidelines of General Financial Rules (GFR) the purchase policy
features are :
• To make purchase of stores for public service to encourage indigenous
production.
• To provide price and/or purchases preference upto a specified limit to
Cottage & Small Scale Industries and PSU over private industries
• To ensure quality of products and timely supplies.
3.3 TYPES OF PREFERENCES
a) Product Reservation
b) Purchase Preference
c) Price Preference
SHRIKANT AKREDDIWAR 21
DGS&D
MATERIALS MANAGEMENT

22. PROCUREMENT OBJECTIVE &
PURCHASE POLICY
3.4 PRODUCT RESERVATION
PURCHASE OF KHADI FROM
KVIC :
• All Khadi Items ( confirming IS
specifications) are reserved for
exclusive purchase from KVIC. List
of all such khadi items is given in
Annexure-3.
• The purchases of Khadi items from
the KVIC is made by the DGS&D on
single tender basis at the rates
fixed by Certification Committee
and these rates are reviewed by
Costs Accounts Branch of MOF.
SHRIKANT AKREDDIWAR 22
DGS&D
MATERIALS MANAGEMENT

23. PROCUREMENT OBJECTIVE &
PURCHASE POLICY
3.5 Purchase Of Handloom Textiles Items Including Barrack Blankets
from KVIC/ACASH :
• All items of handloom textiles required by Central Government Department
are exclusively purchased from KVIC and the additional demand fulfilled by
Association of Corporations and Apex Societies of Handloom (ACASH) , as
per list given in Annexure-4.
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DGS&D
MATERIALS MANAGEMENT

24. PROCUREMENT OBJECTIVE &
PURCHASE POLICY
Continued....
• These purchases are made on single tender basis. In the case of ACASH, the
final prices will be calculated by ACASH and fixed by the Ministry of Textiles
by associating with Department of Expenditure, Ministry of Finance.
• The DGS&D will enter into a one time long term contract with ACASH.
• Payment terms for ACASH notified units will be the normal DGS&D payment
terms, i.e. 95% payment on inspection & proof of dispatch and balance 5%
after receipt of stores by consignee, within delivery period and on price
finalization, if any.
SHRIKANT AKREDDIWAR 24
DGS&D
MATERIALS MANAGEMENT

25. PROCUREMENT OBJECTIVE &
PURCHASE POLICY
Continued....
• KVIC/ACASH are treated equally with SSI units registered with DGS&D/NSIC.
Both are exempted from payment of Performance Security Deposit.
However, these facilities are not applicable to State KVI Boards.
• Purchase of Khadi & Handloom Textile items will be made by inviting sealed
tenders.
SHRIKANT AKREDDIWAR 25
DGS&D
MATERIALS MANAGEMENT

26. PROCUREMENT OBJECTIVE &
PURCHASE POLICY
3.6 Items Reserved for Procurement from SSI
Presently, 358 items are reserved for
exclusive purchase from Small Scale
Industries (SSI), as per list given in
Annexure-5.
• This list is periodically reviewed by Standing Review Committee set up
under the Chairmanship of Secretary(Supply) with Development
Commissioner (SSI) as the Member-Secretary.
• In the process of procurement other things being equal, the purchases
preference would be in order of KVIC/ACASH/SSI.
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DGS&D
MATERIALS MANAGEMENT

27. PROCUREMENT OBJECTIVE &
PURCHASE POLICY
3.7 Procurement Of Other Items Not So Reserved
For the items falling under this category PSUs and Large Scale Private Industries
will also be invited to participate.
3.8 Price Preference :
3.8.1 The offers of the SSI get price preference up to 15% over the lowest
acceptable offer from the large scale private sector units.
3.8.2 Price preference admissible to SSI will be accorded on a tender to tender
basis, on merits of each case.
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DGS&D
MATERIALS MANAGEMENT

28. PROCUREMENT OBJECTIVE &
PURCHASE POLICY
3.8.3 Price preference is not granted in following cases :
i. Where competition exists amongst the SSIs alone or where the items are
exclusively reserved for purchases from SSI Units; &
ii. Where the tenders are received from both the SSI Units and large scale
units and the lowest offers are from SSI units and their capacity is more
than adequate to meet the demand in hand.
3.9 Small Scale Units When They Quote In Group :
• The offer quoted by NSIC/State Development Corporation on behalf of some
SSI Units will be considered as an offer from SSI Unit registered with the
DGS&D/NSIC except for items like Paints for Railways, Drug, Defence goods,
Medical equipments, etc.
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DGS&D
MATERIALS MANAGEMENT

29. PROCUREMENT OBJECTIVE &
PURCHASE POLICY
3.10 Industrial Co-operative Apex Units :
• The Co-operative Societies and Industrial Cooperatives making the products
of cottage at the District, Regional and State level & having the central Apex
Units. If they satisfy the definition of SSIs, then Co-operative Societies
should be given preference over other SSIs.
3.11 Purchases Preference :
• Purchase Preference would be applicable -
a) To PSUs, if a PSUs quotes a price upto 10% higher than the top price at
which rate contract is decided.
b) To SSIs, if SSIs quote a price upto 5% over the PSUs.
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DGS&D
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30. PROCUREMENT OBJECTIVE &
PURCHASE POLICY
• A PSU would not be entitled to any Price Preference when it quotes as an
agent of an Indian or foreign manufacturer/supplier. However, where a PSU
is selling goods or services of another PSU it would be allowed the benefit
of price preference.
• The Private sector is not be eligible for Price preference.
• The above policy of purchases preference is not applicable to State
Government PSUs.
• When a PSU defaults either in the delivery schedule or does not complete
particular project satisfactorily, that PSU need not be shown purchase
preference for a period of 3 years .
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DGS&D
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31. SUPPLY OF SPECIFICATIONS & DRAWINGS
4.1 SPECIFICATIONS :
DGS&D reviews & upgrades purchase specifications as per-
• IS specifications when the relevant product specifications are
comprehensive and complete to enter into contracts.
• Indenter's specifications.
• DGS&D specifications/Drawings which are developed in line with
requirements of the user departments.
• Standard specifications formulated by major departments like Defence,
Railways, P &T, etc.
SHRIKANT AKREDDIWAR 31
DGS&D
MATERIALS MANAGEMENT

32. SUPPLY OF SPECIFICATIONS & DRAWINGS
4.2 Specifications & Drawings to be expressed in Metric system :
• Under the Standards of Weight & Measures Act, 1956, the metric system of
weights and measures was introduced in respect of the description of
stores, drawings, specifications, etc.
4.3 Preparation of DGS&D Specifications & Drawings :
• The Quality Assurance Wing at Headquarters is responsible for the
preparation of the DGS&D standard specification/Drawing for a product
with reference to available national or international standards made on
aspects like methods of testing, sampling plans, etc.
• All Drawings prepared by the Quality Assurance Wing shall be numbered
and approved by an officer not below the rank of Director(QA) before being
issued/sent out.
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DGS&D
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33. SUPPLY OF SPECIFICATIONS & DRAWINGS
4.4 Sale of DGS&D specifications & Drawings at its Head Quarters at New
Delhi and its Regional centres.
4.5 Registration of DGS&D specifications & Drawings is done by the
Quality Assurance Wing.
4.6 Focal Officers :
• The officers in-charge of Tender Sales of DGS&D centres and the field QA
stations shall be responsible for Maintenance & selling of an up-to-date list
of DGS&D specifications and drawings for the stores which are purchased
through the agency of DGS&D.
SHRIKANT AKREDDIWAR 33
DGS&D
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34. THANK YOU
SHRIKANT AKREDDIWAR 34
DGS&D
MATERIALS MANAGEMENT

35. Questions
Que.1) Explain in detail about Organisation and structure of DGS&D.
Que.2) Explain in detail about the principles of contract followed by DGS&D.
Que.3) Explain in detail about the product reservation followed by DGS&D.
Que.4) Explain in detail about the price & purchase preference followed by DGS&D.
Que.5) Write short note on : DGS&D Specifications and Drawings.
SHRIKANT AKREDDIWAR 35
DGS&D
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