Rule 166 of The General Financial Rules 2017 Single Tender Enquiry

Original Rule Text

Rule 166 Single Tender Enquiry. Procurement from a single source may be resorted to in the following circumstances: (i) It is in the knowledge of the user department that only a particular firm is the manufacturer of the required goods. (ii) In a case of emergency, the required goods are necessarily to be purchased from a particular source and the reason for such decision is to be recorded and approval of competent authority obtained. (iii) For standardisation of machinery or spare parts, to be compatible to the existing sets of equipment (on the advice of a competent technical expert and approved by the competent authority), the required item is to be purchased only from a selected firm Note: Proprietary Article Certificate in the following form is to be provided by the Ministry/ Department before procuring the goods from a single source under the provision of sub-Rule 166 (i) and 166 (iii) as applicable. (i) The indented goods are manufactured by M/s ……………………and (ii) No other make or model is acceptable for the following reasons: ………………………………… (iii) Concurrence of finance wing to the proposal vide: ………………………………… (iv) Approval of the competent authority vide: (Signature with date and designation of the indenting officer)

Visual Summary

Purpose

Procurement from a single known source under specific conditions.

Conditions

Sole manufacturer, emergency, or standardization needs.

Documentation

Proprietary Article Certificate, finance concurrence, competent authority approval.

Executive Summary

Rule 166 of The General Financial Rules, 2017 outlines the specific circumstances under which a Ministry or Department can procure goods from a single source without inviting competitive bids. These situations are limited to cases where a particular firm is the sole manufacturer, an emergency necessitates immediate purchase from a known source, or standardization is required for compatibility with existing equipment. Crucially, such single tender procurements, especially under the sole manufacturer or standardization clauses, require a Proprietary Article Certificate, concurrence from the finance wing, and approval from the competent authority, ensuring due diligence and accountability in these exceptional procurement scenarios.

In-Depth Analysis of the Rule

Rule 166 provides a framework for single tender procurements, which are deviations from the standard competitive bidding process. This rule acknowledges that certain situations demand a direct approach to procurement, but it also establishes strict conditions and documentation requirements to prevent misuse and ensure financial propriety.

Breakdown of the Rule:

Sole Manufacturer: Procurement from a single source is permissible if the user department definitively knows that only one particular firm manufactures the required goods. This eliminates the possibility of competition.
Emergency Situations: In urgent cases, goods may be purchased from a specific known source. This requires recording the reasons for such a decision and obtaining approval from the competent authority, highlighting the critical nature of the situation.
Standardization and Compatibility: For machinery or spare parts, if standardization is essential for compatibility with existing equipment, and this is advised by a technical expert and approved by the competent authority, procurement can be made from a selected firm. This ensures operational continuity and avoids integration issues.
Proprietary Article Certificate (PAC): For procurements under the sole manufacturer or standardization clauses (sub-rules (i) and (iii)), a PAC is mandatory. This certificate must detail the manufacturer, reasons why no other make or model is acceptable, finance wing concurrence, and competent authority approval.

Practical Example:

Imagine a government hospital needs a specific diagnostic machine that is only manufactured by one company globally, and no equivalent alternative exists. Under Rule 166(i), the hospital’s procurement department, with the user department’s knowledge, can initiate a single tender enquiry. They would need to provide a Proprietary Article Certificate, detailing why this specific machine from this sole manufacturer is essential, secure finance concurrence, and obtain approval from the competent authority before proceeding with the direct purchase.

Related Provisions

Understanding Rule 166 is enhanced by examining other rules governing procurement and financial powers:

Rule 144 of The General Financial Rules, 2017 Fundamental Principles of Public Buying: Lays down the overarching principles of efficiency, economy, and transparency in public procurement, which Rule 166 operates as an exception to.
Rule 158 of The General Financial Rules, 2017 Purchase of Goods by Obtaining Bids: Details the standard methods of obtaining bids (advertised, limited, two-stage, single tender, electronic reverse auctions), providing context for when single tender is not the primary method.
Rule 194 of The General Financial Rules, 2017 Single Source Selection Consultancy by Nomination: Presents similar exceptional circumstances for single-source selection, but specifically for consulting services, offering a parallel to Rule 166 for goods.

Learning Aids

Mnemonics:

S.E.S.A.P. – Sole Manufacturer, Emergency, Standardization, Approval, Proprietary Article Certificate.

Process Flowchart:

Multiple Choice Questions

1. Under which circumstances can procurement from a single source be resorted to, according to Rule 166 of the General Financial Rules, 2017?

A) Only when the estimated value is below a certain threshold.
B) When a particular firm is the sole manufacturer of the required goods.
C) When the procurement is for non-essential office supplies.
D) When there are more than three potential suppliers.

Show Answer

Correct Answer: B

2. What is a mandatory document for single-source procurement under Rule 166(i) and 166(iii) of the General Financial Rules, 2017?

A) Performance Guarantee Bond
B) Bid Security Declaration
C) Proprietary Article Certificate
D) Global Tender Enquiry

Show Answer

Correct Answer: C

3. In an emergency situation, what is required before procuring goods from a particular source under Rule 166(ii) of the General Financial Rules, 2017?

A) A public auction must be conducted.
B) Reasons for the decision must be recorded, and competent authority approval obtained.
C) Concurrence from the Audit Officer is sufficient.
D) A detailed market survey is mandatory.

Show Answer

Correct Answer: B

4. For standardization of machinery or spare parts to be compatible with existing equipment, whose advice is crucial for single-source procurement under Rule 166(iii) of the General Financial Rules, 2017?

A) The Accounts Officer
B) The Head of Department
C) A competent technical expert
D) The Ministry of Finance

Show Answer

Correct Answer: C

5. Which of the following is NOT a valid reason for single tender enquiry under Rule 166 of the General Financial Rules, 2017?

A) Only one firm manufactures the goods.
B) An emergency requires immediate purchase from a specific source.
C) The procurement value is less than Rs. 50,000.
D) Standardization is needed for compatibility with existing equipment.

Show Answer

Correct Answer: C

Frequently Asked Questions

Q1: What is a Proprietary Article Certificate (PAC) and when is it required under Rule 166 of the General Financial Rules, 2017?

A1: A PAC is a document certifying that the indented goods are manufactured by a specific firm and no other make or model is acceptable due to specific reasons. It is required for single-source procurements under Rule 166(i) (sole manufacturer) and Rule 166(iii) (standardization/compatibility).

Q2: Can any item be procured through a single tender enquiry under Rule 166 of the General Financial Rules, 2017 if it’s deemed urgent?

A2: No, urgency alone is not sufficient. While Rule 166(ii) allows for emergency procurements from a particular source, the reason for such a decision must be recorded, and approval from the competent authority obtained. It’s for situations where the goods necessarily have to be purchased from a particular source due to the emergency.

Q3: Does Rule 166 of the General Financial Rules, 2017 apply to all types of procurement, including services?

A3: Rule 166 specifically deals with the “Procurement of Goods.” While the principle of single-source selection exists for services (e.g., Rule 194 for consulting services), Rule 166 itself is focused on goods.

Key Takeaways

Rule 166 permits single-source procurement under strict conditions: sole manufacturer, emergency, or standardization.
A Proprietary Article Certificate (PAC) is essential for sole manufacturer and standardization cases, requiring detailed justification and approvals.
Emergency procurements require recorded reasons and competent authority approval.
The rule acts as a controlled exception to competitive bidding, emphasizing accountability and financial propriety.

Conclusion

Rule 166 of The General Financial Rules, 2017 is a critical provision that balances the need for flexibility in procurement with the principles of transparency and accountability. By clearly defining the exceptional circumstances for single tender enquiries and mandating rigorous documentation and approvals, it ensures that direct procurements are justified and serve the public interest without compromising financial propriety.

Continue to Rule 167 →