CVC Circulars On Procurement of Works

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VIGILANCE BULLETIN 2016
CVC Circulars/Guidelines on Procurement of Works, Goods & Services

Sl. Circular No. Date Subject
1 01/04/14 29.04.2014 Short-comings in bid documents.
2 18/12/12 11.12.2012 Transparency in Works/Purchase/Consultancy contracts awarded on nomination
basis – reg.
3 06/07/12 23.07.2012 Adoption of Integrity Pact-Standard Operating Procedure-reg.
4 15/07/12 30.07.2012 Revised threshold values for submission of Quarterly Progress Report – QPR
5 12/06/12 12.06.2012 Reporting of fraud cases to police/State CIDs/Economic Offences Wing of State
police by Public Sector Banks.
6 03/01/12 13.01.2012 Consideration of Indian Agents
7 01/01/2012 12.01.2012 Guidelines on e-Procurement Linked Document
8 12/10/11 28.10.2011 Applicability of CVC’s guidelines on post tender negotiations
9 11/09/11 12.09.2011 Recoveries arising out of Intensive Examination Conducted by CTEO
10 08/06/11 24.06.2011 Selection and Employment of Consultants
11 02/02/11 17.02.2011 Mobilization Advance
12 01/02/11 11.02.2011 Transparency in Tendering System
13 34/10/10 07.10.2010 Design Mix Concrete
14 31/8/10 13.08.2010 Adoption of Integrity Pact-Standard Operating Procedure (SOP) – reg.
15 23/6/10 23.06.2010 Leveraging of Technology for improving vigilance administration in the
National E-Governance Plan
16 21/5/10 02.06.2010 Delay in initiating Disciplinary Proceedings.
17 19/5/10 19.05.2010 Transparency in Works/Purchase/Consultancy contracts awarded on
Nomination basis.
18 18/04/10 26/04/2010 Implementation of e-tendering solutions – check list.
19 17/04/10 19.04.2010 Integrity Pact – Selection and Recommendation of Independent External
Monitors (IEMs).
20 01/01/10 20.01.2010 Tendering Process – Negotiations with L-1
21 31/10/09 09.11.2009 Review of Purchase Preference Policy for Products and Services of Central
Public Sector Enterprises (CPSEs) in view of the judgement of the Supreme
Court of India in the matter of M/s. Caterpillar India Pvt. Ltd. v/s Western
Coalfields Ltd. and Ors dated 18.5.2007
22 29/9/09 17.09.2009 Implementation of e-tendering solutions.
23 13/6/09 11.08.2009 Intensive Examination of CTE- Steps for early finalization
24 22/08/09 11.08.2009 Adoption of Integrity Pact – Periodicals regarding
25 17/7/09 14.07.2009 Posting of details on award of tenders/contracts on websites.
26 10/5/09 18.05.2009 Adoption of Integrity Pact-Standard Operating Procedure – Reg.
27 1/1/09 13.01.2009 Implementation of e-Tendering solutions
28 31/11/08 06.11.2008 Time bound processing of procurement
29 24/8/08 05.08.2008 Adoption of Integrity Pact in major Government Procurement
30 22/07/08 24.07.2008 Referring cases of Procurement to the Commission.
31 18/5/08 19.05.2008 Adoption of Integrity Pact in major Government Procurement
32 9/2/08 18.02.2008 Two day Work shop/Seminar regarding IT Procurement…
33 07/02/08 15.02.2008 Measures to curb the menace of counterfeit and refurbished IT products –
regarding.
34 05/02/08 05.02.2008 Mobilization Advance
35 1/1/08 31.12.2007 Acceptance of Bank Guarantees.
36 43/12/07 28.12.2007 Adoption of Integrity Pact in major Government Procurement Activities
37 41/12/07 04.12.2007 Adoption of Integrity Pact in major Government Procurement Activities
Modified Integrity Pact
38 23/7/07 05.07.2007 Transparency in Works/Purchase/Consultancy contracts awarded on nomination
basis.
39 14/4/07 26.04.2007 Use of Products with standard specification.
40 13/4/07 18.04.2007 Improving Vigilance administration by leveraging technology: Increasing
transparency through effective use of website.
41 10/4/07 10.04.2007 Mobilization Advance.
42 4/3/07 03.03.2007 Tendering process-negotiation with L-1.
43 3/2/07 23.02.2007 Investigation of complaints by the CVOs – seizure of records reg.
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44 40/11/06 22.11.2006 Improving vigilance administration by leveraging technology : Increasing

transparency through effective use of websites in discharge of regulatory,
enforcement and other functions of Govt. organizations.
45 37/10/06 03.10.2006 Tendering process – Negotiation with L1
46 31/09/06 01.09.2006 Posting of details of award of tenders/contracts on websites/bulletins.
47 15/05/06 09.05.2006 Transparency in Workshops/Purchase/Consultancy contracts awarded on
nomination basis.
48 21/05/06 01.05.2006 Examination of Public Procurement (Works/Purchases/ Services) Contracts by
CVOs
49 74/12/05 21.12.2005 Vigilance angle – definition of (partial modification regarding)
50 71/12/05 09.12.2005 Undertaking by the Members of the Tender Committee/ Agency.
51 98/VGL/25 10.11.2005 Intensive Examination of works by CTE’s Organisation – Submission of
quarterly progress report.
52 68/10/05 25.10.2005 Tendering process negotiation with L-1
53 57/09/05 20.09.2005 Details of award of tenders/contracts publishing on Websites/ Bulletins –
Reminder regarding.
54 46/07/05 28.07.2005 Details of award of tenders/contracts Publishing on Websites/ Bulletins –
Reminder regarding.
55 98/VGL/25 16.05.2005 Intensive Examination of Works by CTE’s Organization – Submission of
Quarterly Progress Report.
56 2EE-1-CTE-3 12.04.2005 Issues pertaining to negotiation with L-1
57 18/3/05 24.03.2005 Banning of business dealing with firms/contractors – clarification regarding.
58 15/3/05 24.03.2005 Notice inviting tenders – regarding.
59 13/3/05 16.03.2005 Details on award of tenders/contracts publishing on websites / Bulletins.
60 11/3/05 10.03.2005 Delay in payments to Contractors & Suppliers.
61 75/12/04 24.12.2004 Participation of consultants in tender - guidelines reg.
62 72/12/04 10.12.2004 Transparency in tendering system - Guidelines regarding.
63 69/11/04 03.11.2004 Turnkey contracts for net-working of Computer Systems.
64 68/10/04 20.10.2004 Leveraging Technology – e-payment and e-receipt.
65 43/7/04 02.07.2004 Improving Vigilance Administration: Increasing Transparency in
procurement/sale etc. - Use of website regarding.
66 4CC-1-CTE-2 08.06.2004 Mobilization Advance.
67 05-04-1-CTE-8 08.06.2004 Receipt and Opening of Tenders.
68 No.12-02-1-CTE-6 07.05.2004 Pre-qualification criteria (PQ)
69 25/4/04 21.04.2004 Consideration of Indian Agents.
70 23/04/04 13.04.2004 Vigilance angle – definition of.
71 20/4/04 06.04.2004 Improving Vigilance Administration - Increasing Transparency and cutting
delays by e-payments and e-receipt by Govt. Organizations etc.
72 10/2/04 11.02.2004 Improving Vigilance Administration – increasing Transparency in
procurement/tender process – use of website – regarding.
73 9/2/04 09.02.2004 Improving Vigilance Administration – Increasing Transparency in
procurement/sale – use of website regarding.
74 8/2/04 05.02.2004 Common irregularities in the award of contracts.
75 98/ORD/1 18.12.2003 Improving Vigilance Administration - Increasing Transparency in
Procurement/Sale etc.
76 06-03-02- CTE-34 20.10.2003 Back to back tie up by PSUs - instructions regarding.
77 2EE-1-CTE-3 15.10.2003 Tender Sample Clause
78 46/9/03 11.09.2003 E-procurement/Reverse Auction.
79 44/9/03 04.09.2003 Irregularities in award of contracts
80 33/7/03 09.07.2003 Short-comings in bid documents.
81 98/ORD/1 05.05.2003 Purchase of computers by Govt. departments/ organization
82 98/ORD/1(Pt.IV) 12.03.2003 Use of web-site in Govt. procurement or tender process.
83 12-02-6-CTE-SPI(1)2 07.01.2003 Consideration of Indian Agents.
84 No.12-02-1-CTE-6 17.12.2002 Pre-qualification criteria (PQ)
85 No.OFF1 CTE1 25.11.2002 Appointment of Consultants.
86 98/ORD/1 03.08.2001 Improving Vigilance Administration- Tenders (H1)
87 98/ORD/1 24.08.2000 Improving Vigilance Administration - Tenders.
88 3(v)/99/9 01.10.1999 Applicability of CVC’s instruction No.8(1)9h)/98(1) dated 18/11/98 on post-
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tender negotiations to Projects of the World Bank & other international funding
agencies.
89 No.98/ORD/1 15.03.1999 Improving vigilance administration – Tenders.
90 8(4)-E.II(A)/98 17.12.1998 Purchase of Computer Systems by Govt. Departments.
91 8(1)(h)/98(1) 18.11.1998 Improving vigilance administration (L1) (L1)
92 No.UU/POL/19 08.10.1997 Grant of interest free mobilization advance.
93 No.3L-IRC 1 10.01.1983 Appointment of Consultants.
94 No.3L PRC 1 12.11.1982 Irregularities/lapses observed in the construction works undertaken by Public
sector undertakings/ banks.
CVC-Circular No. 01/04/14 dated 29.04.2014
Short-comings in bid documents

Ref.: Commission’s circular No. 33/7/03 dated 9th July, 2003
The Commission has been impressing upon all Organizations to ensure transparency and fairplay
in all procurements/contracts. One of the concern relates to the short-comings in framing of NITs and bid
documents which results in ambiguity and scope for interpretation differently during processing and award
of contracts by the organizations.
2. The Commission had vide its Office Order No. 33/7/03 dated 9th July, 2003, advised that whatever
pre-qualification, evaluation/exclusion criteria, etc. which the organization wants to adopt should be made
explicit at the time of inviting tenders so that basic concept of transparency and interests of equity and
fairness are satisfied. The acceptance/rejection of any bid should not be arbitrary but on justified grounds
as per the laid down specifications, evaluation/exclusion criteria leaving no room for complaints as after
all, the bidders spend a lot of time and energy besides financial cost initially in preparing the bids and
thereafter, in following up with the organizations for submitting various clarifications and presentations.
3. The above instructions are reiterated for compliance by all Ministries/Departments/ Organizations.
Sd/-
(J.Vinod Kumar)
Officer on Special Duty
CVC-Circular No. 18/12/12 dated 11.12.2012
Transparency in Works/Purchase/Consultancy contracts awarded on nomination basis – reg.
The Commission has been emphasising on the need for observing integrity, transparency, fairness
and equity in all aspects of decision making including in tendering and award of contracts. However, the
Commission is still receiving complaints regarding adoption of non-transparent methods in tendering and
award of contracts. A number of such complaints pertain to award of nomination (single source
procurement) basis instead of following a process of open competitive bidding. The Commission in their
earlier office order No. 23/7/07 dated 05.07.2007 (copy enclosed) had laid down the exceptional
circumstances where ‘single source procurement’ can be resorted to. These guidelines were consequent to
the Supreme Court’s judgement in case of Nagar Nigam, Meerut v/s A1 Faheem Meat Export Pvt. Ltd.
[SLP (Civil) No. 1074 of 2006].
2. In view of the complaints being received regarding award of contracts on ‘nomination basis’
without adequate justification, the Commission has decided to reiterate their earlier instructions for strict
implementation. The Commission has also observed that there have been instances where government
organizations/PSUs obtain contract from other government organizations/PSUs and further award the
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same to private entities on ‘back to back tie up’ basis without competitive tendering mechanism and
without any significant value addition by the procuring government organization/PSU. This practice
subverts the Commission’s emphasis on integrity, transparency, fairness and equity in decision making. It
is therefore, necessary to curb this practice. Further, the Commission directs that details of all tenders
awarded on nomination basis shall be posted on website in public domain as per Commission’s office
order of 5th July 2007 along with brief reasons for doing so.
3. Kindly acknowledge the receipt and circulate to all concerned in your organization.
Sd/-
(J. Vinod Kumar)
CVC – Circular No. 06/07/12 dated 23.07.2012

Adoption of Integrity Pact-Standard Operating Procedure-reg.
In continuation of Commission’s circular No. 10/5/09 dated 18.5.09 laying down “Standard
Operating Procedure” for adoption of integrity Pact in major Govt. Department/organizations, the
Commission has decided to lay down age criteria for appointment of IEMs. Commission has therefore
resolved that at the time of appointment as IEM, the person concerned should be less than 70 years of age.
On completion of tenure of initial three years if age of 70 years has been crossed, further extension of two
years will not be admissible.
2. Accordingly, new sub-para i.e. 5.10 under Para 5 of the Commission’s circular No. 10/5/09 dated
18.05.09 is added which may be read as under:
5.10 At the time of appointment as IEM the person should be less than 70 years of age. On
completion of tenure of initial three years if age of 70 years has been crossed, further
extension of two years will not be admissible.
Other provisions contained in Commission’s circular No. 10/5/09 dated 18.5.09 would remain
unchanged.
Sd/-
(Madhu Sham)
Deputy Secretary

Revised threshold values for submission of Quarterly Progress Report – QPR
In supersession to the Commission’s earlier OMs on the subject, the threshold limits for reporting
of the contracts in the QPR to the Commission, are revised as under:
Works/Contracts Revised Value

Category-I:
a) Civil Works
b) Turnkey Works Contracts
c) Stores & Purchase Rs.5 Crores & above
d) PPP- Public Private Partnership [Cost/Revenue values]
e) Sale of Goods/Scrap/Land
Category-II:
f) Electrical/Mechanical works/Maintenance/ Service Rs.1 Crores & above
contracts including Electronics/
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Instrumentation/Telecommunication/ Manpower
Supply, etc.
g) Medical Equipment Rs.50 lakh & above
h) Consultancy contracts Rs.1 Crores & above
Category-III:
i) Horticulture Works Rs.10 lakh & above
j) Supply of Medicines 4 Largest Value
Contracts
1. QPRs should be submitted both in softcopy (in MS Excel format) through e-mail at
qpr.te.general@nic.in as well as hardcopy separately for each sub-category mentioned above. For
contracts below the threshold value, CVO may conduct CTE type of inspections and intimate the
outcome to the Commission through their regular monthly/quarterly reports.
2. The revised limits would come into effect from July-September 2012 Quarter onwards.
3. The Commission is in the process of ‘On-line’ submission of QPR. The detailed instructions on
this would follow. Meanwhile, organizations are requested to make necessary arrangement for
on-line submission of QPRs and also documents (if called for). These facilities may be developed
in next two months and confirmed to the Commission.
4. The following explanatory notes are for guidance regarding the QPRs.
i) Civil works also include marine, mining, excavation and transportation works.
ii) Electrical/Mechanical works also include air conditioning, fire fighting, fire alarm and all
other allied works.
iii) In case there are no works awarded more than the threshold value mentioned under each
sub-category, 2 contracts with highest value in each of such sub-category should be
reported. In case no contracts are awarded, “Nil” QPRs may be sent.
iv) In case the orders are placed in foreign currency, the threshold limit would be determined
based on conversion of foreign currency with Indian Rupee at the exchange rate defined in
the tender documents. However the currency of payments may also be indicated as per the
contract.
v) Contracts awarded on Assignment/Nomination/Single Tender/OEM/OES/PAC
(*) basis falling in the above categories shall also be reported.
(*) OEM: Original Equipment Manufacturer
OES: Original Equipment Supplier
PAC: Proprietary Article Certificate
vi) For furnishing the QPR related to Sale Contracts [sub-category-I (e)], the QPR may also to
indicate the value as per reserve price besides the sale price.
vii) The organizations shall report all types of contracts irrespective of their role as
Client/Owner or Engineer-in-Charge of the Contract or Project Management/Supervision
Consultant.
viii) All works whether in India or outside India in progress, contracts awarded and the works
completed during the quarter shall be included in the QPR. In respect of works completed
during the relevant quarter, the actual date of completion shall be indicated.
ix) CVO to certify on the QPR that all the Works/Purchases/ Consultancies and other contracts
required to be reported as per circular have been included in the QPR.
5. In case of any doubt regarding threshold value or the type of contract, the CTE Organization of the
Commission may be consulted.
6. The contents of the circular may be brought to the notice of all concerned.
Sd/-
( Ramesh Chandra )
Chief Technical Examiner
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CVC – Circular No. 12/06/12 dated 12/06/2012
Reporting of fraud cases to police/State CIDs/Economic Offences Wing of State police by Public
Sector Banks.
In partial modification of Commission’s circular No. 30/08/10 dated 17.08.2010, it has been
decided to enhance the threshold limit for reporting of Bank fraud cases by Local Police/State Police and
CBI. Henceforth following monetary limits would be followed to refer financial fraud investigations to
the BS&FC unit of the CBI and the Local/State police:-
Cases to be referred to CBI
a) Cases of ₹3 crore and upto ₹15 crore:-
- Where staff involvement is prima-facie CBI (Anti-Corruption Branch)
evident
- Where staff involvement is prima-facie CBI (EOW Branch)
not evident
b) All cases of ₹15 crore and aboveBS&FC Unit of CBI
Cases to be referred to the Local/State Police
Cases below ₹3 crore - Local police/State police.

2. Other provision contained in Commissions circular referred above would remain unchanged.
3. Relevant provisions of para 6.3 of the Special Chapter on Vigilance Management in Public Sector
Banks stands amended to the extent.
Sd/-
( Madhu Sham )
Deputy Secretary
Consideration of Indian Agents
Ref: Commission’s Circular Nos. 12-02-6-CTE/SPI(I)-2 dated 7.01.2003 and 21.04.2004
The Commission has been stressing on the need for observing transparency and determination of
prices in a fair market competition while dealing with the tenders relating to procurement. The above
OMs were issued to reduce the possibility of collusion and cartelization among the bidders so that
competitive fair market price of the items of procurement can be determined.
2. A number of references have been received in the Commission citing certain specific situations
and difficulties being faced in dealing with tenders. Therefore, the matter has been again examined by the
Commission.
3. In supersession to the earlier OMs dated 7.01.2003 and 21.04.2004, Commission has decided that
in all cases of procurement, the following guidelines may be followed:
a) In a tender, either the Indian agent on behalf of the Principal/OEM itself can bid but both
cannot bid simultaneously for the same item/product in the same tender.
b) If an agent submits bid on behalf of the Principal/OEM, the same agent shall not submit a
bid on behalf of another Principal/OEM in the same tender for the same item/product.
4. The tender conditions may be carefully prepared keeping in view the above guidelines.
5. The receipt of these guidelines may please be acknowledged and circulated amongst the
concerned officials for their information and guidance.
Sd/-
( J.Vinod Kumar )
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Guidelines for compliance to Quality Requirements of e-Procurement Systems
Ref.: Commission’s Circular No. 23/06/010 dated 23/06/2010
Commission has been advocating leveraging of technology for activities prone to corruption since 2006
and one of the prominent initiatives was adoption of e-procurement for goods, works and services by
allMinistries/Departments/ Organizations. Commission advised all Organizations to ensure security of the
e-procurement systems and to get their system certified by Department of Information Technology (DIT).
2. DIT in turn requested its attached office STQC (Standardisation, Testing and Quality Certificate)
Directorate to establish necessary processes and systems to enable certification of e-Procurement systems.
Accordingly, the guidelines prepared by STQC in this regard approved and notified by the DIT is
available on egovstandards website [www.egovstandards.gov.in]. The guidelines are also available on
Commission’s website www.cvc.nic.in(link-circular/instructions). All the
Ministries/Departments/Organisations are advised to use these guidelines for compliance to Quality
Requirements for certifying the e-Procurement systems.
Sd/-
( J.Vinod Kumar )
Applicability of CVC’s guidelines on post tender negotiations with regard to projects funded by
World Bank and other international funding agencies like IMF, ADB etc.
Reference have been received seeking clarification whether the Commission’s guidelines
contained in Circular No. 3(V)/99/9 dated 1st October 1999 are binding even for the projects which are
funded by international funding agencies like World Bank, ADB etc.
2. Para 2 of the Commission’s Circular dated 1st October 1999 is reproduced as under:-
“It has been decided after due consideration, that in so far as the World Bank Projects and other
international funding agencies such as IMF, ADB etc. are concerned, the department/organizations
have no other alternative but to go by the criteria prescribed by the World Bank/concerned
agencies and the Commission’s instructions would not be applicable specifically to those projects.
However, the instructions of the CVC will be binding on purchase/sales made by the departments
within the country. The CVC’s instructions of 18/11/98 will apply even if they are made with
source outside the country and if they are within the budget provisions and normal operations of
the Department/Organization”.
3. It is clarified that the Commission’s guidelines would not be applicable in projects funded by the
World Bank, ADB etc., if found to be in conflict with the applicable procurement rules of the funding
agencies.
4. This may be brought to the notice of all concerned.

Sd/-
( J.Vinod Kumar )
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Recoveries arising out of intensive examination conducted by Chief Technical Examiner

Organisation (CTEO) of the commission
Instances have come to notice that some organizations while notifying/effecting recoveries from
the contractors bills indicate that the recoveries are consequent to the observations made by the CTEO.
In this connection, it may be noted that the contracts are primarily between the executing agency
and the contractor. Any endorsements that the recoveries are being made at the instance of a third party
could weaken the department’s case during arbitration or court proceedings. Further, the
observations/advice of the Commission are required to be considered by the executing agencies in terms of
the contract and recoveries are to be enforced as admissible as per the conditions of the contract. The
organizations are advised that justification / reasons for recoveries in line with contract clauses should be
recorded while notifying / effecting recoveries from the contractors.
It is requested that these instructions may be notified to all concerned.

Sd/-
( Anil Singhal )

Selection and employment of Consultants
The issue of role and professional liability of consultants in government contracts has been under
consideration in the Commission for quite some time. The Commission has decided that following
guidelines, be kept in view while finalising the contracts for engaging consultants.
1. Conflict of Interest. The consultant shall not receive any remuneration in connection with the
assignment except as provided in the contract. The consultant and its affiliates shall not engage in
consulting or other activities that conflict with the interest of the employer under the contract.
The contract shall include provisions limiting future engagement of the consultant for other
services resulting from or directly related to the firm’s consulting services in accordance with following
requirements:-
(a) The consultants shall provide professional, objective,and impartial advice and at all times bold the
employer’s interests paramount, without any consideration for future work, and that in providing advice
they avoid conflicts with other assignments and their own interest. Consultants shall not be hired for any
assignment that would be in conflict with their prior or current obligations to other employers, or that may
place them in a position of being unable to carry out the assignment in the best interest of the employer.
Without limitation on the generality of the foregoing, consultants shall not be hired under the
circumstances set forth below:
(i) Conflict between consulting activities and procurement of goods, works or non-consulting
services (i.e. services other than consulting services covered by these Guidelines) - A firm that
has been engaged by the employer to provide goods, works, or non-consulting services for a project,
or any affiliate that directly or indirectly controls, is controlled by , or is under common control with
that firm, shall be disqualified from providing consulting services resulting from or directly related to
those goods, works, or non-consulting services. Conversely, a firm hired to provide consulting
services for the preparation or implementation of a project, or any affiliate that directly or indirectly
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controls, is controlled by, or is under common control with that firm, shall be disqualified from
subsequently providing goods, works, or services (other than consulting services covered by these
Guidelines) resulting from or directly related to the consulting services for such preparation or
implementation. This provision does not apply to the various firms (consultants, contractors, or
suppliers) which together are performing the Contractor’s obligations under a turnkey or design and
build contract.
(ii) Conflict among consulting assignments - Neither consultants (including their personnel and
suib-consultants), nor any affiliate that directly or indirectly controls, is controlled by, or is under
common control with that firm, shall be hired for any assignment that, by its nature, may be in conflict
with another assignment of the consultants. As an example, consultants assisting a employer in the
privatization of public assets shall neither purchase, nor advise purchasers of, such assets. Similarly,
consultants hired to prepare Terms of Reference (TOR) for an assignment shall not be hired for the
assignment in question.
(iii) Relationship with Employer’s staff – Consultants (including their experts and other personnel,
and sub-consultants) that have a close business or family relationship with a professional staff of the
Employer (or of the project implementing agency) who are directly or indirectly involved in any part
of: (i) the preparation of the TOR for the assignment, (ii)the selection process for the contract, or (iii)
the supervision of such contract may not be awarded a contract, unless the conflict stemming from this
relationship has been resolved in a manner acceptable to the Employer throughout the selection
process and the execution of the contract.
(iv) A consultant shall submit only one proposal, either individually or as a joint venture partner in
another proposal. If a consultant, including a joint venture partner, submits or participates in more
than one proposal, all such proposals shall be disqualified. This does not, however, preclude a
consulting firm to participate as a sub-consultant, or an individual to participate as a team member, in
more than one proposal when circumstances justify and if permitted by the RFP.
(b) Unfair Competitive Advantage - Fairness and transparency in the selection process require that
consultants or their affiliates competing for a specific assignment do not derive a competitive advantage
from having provided consulting services related to the assignment in question. To that end, the Employer
shall make available to all the short listed consultants, together with the request for proposals, all
information that would in that respect give a consultant a competitive advantage.
2. Professional Liability – The consultant is expected to carry out its assignment with due diligence and
in accordance with prevailing standards of the profession. As the consultant’s liability to the Employer
will be governed by the applicable law, the contract need not deal with this matter. The client (purchaser)
may, however, prescribe other liabilities depending on the requirement in each case without any restriction
on the Consultant’s liability as per the applicable law.
The Commission desires that the above guidelines be brought into the notice of all concerned.
Sd/-
( J. Vinod Kumar )
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Mobilization Advance
Commission had earlier issued guidelines on granting of ‘Mobilization Advance’ vide OM

No.UU/POL/18 dated 08.12.1997, OM No.4CC-1-CTE-2 dated 08.06.2004 and OM No.4CC-1-CTE-2
dated 10.04.2007.
2. The matter has been further reviewed and it has decided by the Commission that following
additional guidelines may be followed in case of grant of Mobilization Advance.
(i) The Bank Guarantee etc. taken towards security of ‘Mobilization Advance’ should be at least
110% of the advance so as to enable recovery of not only principal amount but also the interest
portion, if so required.
(ii) The mobilization advance should not be paid in less than two installments except in special
circumstances for the reasons to be recorded. This will keep check on contractor misutilizing the
full utilization advance when the work is delayed considerably.
(iii) A clause in the tender enquiry and the contract of cases providing for interest free
mobilization advances may be stipulated that if the contract is terminated due to default of the
contractor, the ‘Mobilization Advance’ would be deemed as interest bearing advance at an
interest rate of _____%, (to be stipulated depending on the prevailing rate at the time of issue of
NIT) to be compounded quarterly.
Sd/-
(Anil Singhal)
Transparency in Tendering System
There have been instances where the equipment/plant to be procured is of complex nature and the
procuring organization may not possess the full knowledge of the various technical solutions available in
the market to meet the desired objectives of a transparent procurement that ensures value for money spent
simultaneously ensuring upgradation of technology & capacity building.
2. The Commission advises that in such procurement cases where technical specifications need to be
iterated more than once, it would be prudent to invite expression of interest and proceed to finalise
specifications based on technical discussions/presentations with the experienced manufacturers/suppliers
in a transparent manner. In such cases, two stage tendering process may be useful and be preferred. During
the first stage of tendering, acceptable technical solutions can be evaluated after calling for the Expression
of Interest (EOI) from the leading experienced and knowledgeable manufacturers/suppliers in the field of
the proposed procurement. The broad objectives, constraints etc. could be published while calling for EOI,
On receipt of the Expressions of Interest, technical discussions/presentations may be held with the short-
listed manufacturers/suppliers, who are prima facie considered technically and financially capable of
supplying the material or executing the proposed work. During these technical discussions stage the
procurement agency may also add those other stake holders in the discussions who could add value to the
decision making on discussions/presentations so held, one or more acceptable technical solutions could be
decided upon laying down detailed technical specifications for each acceptable technical solution, quality
bench marks, warranty requirements, delivery milestones etc. in a manner that is consistent with the
CVC 11 | P a g e
objectives of the transparent procurement. At the same time care should be taken to make the
specifications generic in nature so as to provide equitable opportunities to the prospective bidders. Proper
record of discussions/presentations and the process of decision making should be kept.
3. Once the technical specifications and evaluation criteria are finalized, the second stage of
tendering could consist of calling for techno commercial bids as per the usual tendering system under
single bid or two bid system, as per the requirement of each case. Final selection at this stage would
depend upon the quoted financial bids and the evaluation matrix decided upon.
4. Commission desires that organizations formulate specific guidelines and circulate the same to all
concerned before going ahead with such procurements.
Sd/-
(Anil Singhal)
Design Mix Concrete
During inspection of works of many organizations, it has been observed that provisions of IS
456:2000 are neither being followed for designing the concrete mix nor for acceptance criteria. Instances
of acceptance of concrete on basis of false certification and without actually testing the cubes for 28 days
strength have also been observed. The following deficiencies are brought to the notice of all organizations
for immediate corrective action:
1. Minimum cement content, maximum water cement ratio and minimum grade of concrete for
different exposures are not adopted as per the details given in Table 5 of above code.
2. Value of standard deviation is not being established on the basis of results of 30 samples as
provided in Table 11 of the above code even for works where more than 30 samples have been
tested.
3. For acceptance criteria mean of a group of 4 non overlapping consecutive test results is not being
calculated.
4. The samples where individual variations are more than + 15% of average of three specimens are
not declared invalid as per the provisions of clause 15.4 of the Code.
5. The concrete is being declared meeting the acceptance criteria which is not in conformity of codal
provisions.
Most of the organizations are not even aware about the amendment No. 3 of 2007 modifying
clause 15.1.1 of IS 4656:2000. All organizations are directed to ensure that provisions of IS 456:2000
read with amendment No. 3 should be followed scrupulously for cement concrete and reinforced cement
concrete. Non compliance of the provisions shall be viewed seriously.
Sd/-
( V.K. Gupta )

Adoption of Integrity Pact – Standard Operating Procedure (SOP) – reg.
The Commission vide its circular No.10/5/09 dated 18.5.09 issued guidelines on “Standard
Operating Procedure (SOP) for implementation of Integrity Pact in Ministries/ Departments/Organisations.
CVC 12 | P a g e
Section 6.02 of the SOP provides financial impact review through independent agency and physical
review through an NGO.
2. The Commission has since reviewed the provisions contained in para 6.02 of the SOP and is of the
view that it would be difficult to undertake a separate assessment on the impact of implementation of
Integrity Pact in an organisationa and has therefore decided to delete Section 6.02(i) & 6.02(ii) of the said
circular. All organizations implementing IP would however, undertake a general review and assessment of
implementation of IP and submit progress through CVO’s monthly report to the Commission.
Sd/-
(Vineet Mathur)
Director.
Leveraging of Technology for improving vigilance administration in the

National E-Governance Plan.
The Commission observes that e-procurement software, security and implementation is a new area
and needs improvement. E-Procurement provides a platform for the collaborative procurement of goods,
works and services using electronic methods at every stage of the procurement process. The e-
procurement platform transacts confidential procurement data and is exposed to several security threats.
Department of Information Technology could be best placed to address issues relating to e-procurement.
In order to ensure proper security of the e-procurement system all Departments/Organizations are advised
to get their system certified by Department of Information Technology.
Sd/-
(Shalini Darbari)
Director.
Delay in initiating Disciplinary Proceedings.
During Intensive Examination of contracts/complaints by CTEO/CVC or CVOs of various

organizations excess payments to the contractors have been observed which may be either due to
ambiguity in the contract or misinterpretation of various clauses of the contract. In some of the cases
variations in the contract clauses or specifications are allowed without financial adjustments, thus, giving
undue benefit to the contractors.
2. In such cases, two-fold actions is normally recommended by CVC -

(i) for Identifying the officials responsible for making excess payments involving vigilance angle.
(ii) to recover such excess payments from the contractors.
In number of cases contractors invoke arbitration to avoid such recoveries and in addition submit
huge claims to deter the authorities from making recoveries. CVOs in such cases delay the process
of Identifying the officials citing reference to arbitration as an excuse and the organization also
fails to affect the recoveries citing reference to arbitration by the contractor.
3. In view of the above, following directions are hereby issued:

(a) Whenever, any excess payment is detected, it should be recovered from the contractor from the
available amount at the first opportunity following due procedure prescribed in the contract, unless
any stay has been granted by any Court.
CVC 13 | P a g e
(b) Reference to arbitration should not be linked with investigation and for Identifying the officials
responsible for lapses/excess payment involving mala-fide intentions/vigilance angle. CVOs
should immediately investigate the case to identify the officials for lapses attributable to them and
should approach the Commission for first stage advice without any delay.
Sd/-
(V.K. Gupta)
CVC – Office Order No. 19/05/10 dated 19.05.2010
Transparency in Works/Purchase/Consultancy contracts awarded on Nomination basis.
Commission vide Circular No.15/5/06 dated 09.05.2006 had prescribed certain measures to be
followed on works/purchase/consultancy contracts awarded on nomination basis by PSUs. These
instructions have since been reviewed in the Commission and the Commission is of the view that the
Board of the PSU is not required to scrutinize or post facto vet the actions of the operational managers and
their decisions to award work on nomination basis.
2. Therefore, the following amendment is being made in sub-para (i) of Para 2 of Commission’s
above circular:-
“All works awarded on nomination basis should be brought to the notice of the Board of the
respective PSUs for scrutiny and vetting post facto”
Read as
“All works awarded on nomination basis should be brought to the notice of the Board of the
respective PSUs for information”.
Sd/-
(Vineet Mathur)
Director
Implementation of e-tendering solutions – check list
Guidelines were prescribed in this office OM of even number, dated 17.09.2009, on the above-
cited subject, advising organizations to take due care to see that effective security provisions are made in
the system to prevent any misuse. It has been observed during security audit carried by CTEO that e-
procurement solutions being used by some of the organizations lack security considerations as envisaged
in the Commission’s guidelines dated 17.09.2009. Some of the shortcomings/deficiencies are of repetitive
nature.
A check list to achieve security considerations in e-Procurement solutions is enclosed for

information. Organisations concerned may follow the same while implementing e-tendering solutions to
address the security related concerns.
2. It is clarified that while ensuring fair play, transparency and open tendering procedure for e-
tendering solutions, the organizations must take due care to see that effective security provisions are made
in the system to prevent any misuse. In this regard, the guidelines on security related issues in e-tendering
systems are enclosed for information. Organizations concerned may follow these guidelines while
implementing e-tendering solutions to contain the security related loop holes.
Sd/-
(V. Ramachandran)
CVC 14 | P a g e
CHECK POINTS TO ACHIEVE SECURITY CONSIDERATIONS IN E-PROCUREMENT

SOLUTIONS
Sl. SECURITY CONSIDERATIONS Please Tick√

1. Whether the application is secure from making any temporary distortion in Yes No
the electronic posting of tender notice, just to mislead certain vendors?
2. If yes at 2 above, then whether any automatic systems alert is provided in Yes No
the form of daily exception report in the application in this regard?
3. Whether application ensures that the tender documents issued to / Yes No
downloaded by bidders are complete in shape as per the approved tender
documents including all its corrigendum?
4. Is there any check available in the application to detect & alert about the Yes No
missing pages to the tenderer, if any?
5. Whether application ensures that all the corrigendum issued by the Yes No
Competent Authority are being fully communicated in proper fashion to all
bidders including those who had already purchases / downloaded the bid
documents well ahead of the due date & before uploading the corrigendum?
6. Whether system is safe from sending discriminatory communication to Yes No
different bidders about the same e-tendering process?
7. Whether e-procurement solution has also been customized to process all Yes No
type of tenders viz Limited / Open / Global Tenders?
8. Whether online Public Tender opening events feature are available in the Yes No
application?
9. Whether facilities for evaluation / loading of bids, strictly in terms of Yes No
criteria laid down in bid documents are available in the application?
10. Whether sufficient safeguards have been provided in the application to deal Yes No
with failed attempt blocking?
11. Whether application is safe from submission of fake bids? Yes No
12. Whether encryptions of bids are done at clients end? Yes No
13. Whether safety against tampering and stealing information of submitted Yes No
bid, during storage before its opening, is ensured?
14. Whether application is safe from siphoning off and decrypting the Yes No
clandestine copy of a bid encrypted with Public key of tender opening
officer?
15. Whether application is safe from mutilation / sabotage or otherwise Yes No
rendering the encrypted bid in the e-tender box during storage, to make it
unreadable / invalid in any form, before opening of the bids?
16. Whether introduction of special characters / executable files etc by users are Yes No
restricted in the application?
17. Whether validity check of DSC is being done at server end? Yes No
18. Whether system supports the feature that even though if a published tender Yes No
is being deleted from the application, system does not allow permanent
deletion of the published tender from the Database?
19. Whether sufficient security features are provided in the application for Yes No
authentication procedure of the system administrator like ID, password,
digital signature, biometric etc?
20. Whether audit trails are being captured in the application on media not Yes No
prone to tampering, such as optical write once?
21. Whether log shipping feature is available, where a separate dedicated server Yes No
CVC 15 | P a g e
receives the logs from the application over a web service in real time?
22. Whether integrity and non-tampering is ensured in maintaining the server Yes No
clock synchronization & time stamping?
23. Whether application generates any exception report / system alerts etc to Yes No
indicate the resetting of the clock, in case the application for time stamping
is killed at the server level and time is manipulated?
24. Whether application ensures that the quotes from various bidders with their Yes No
name are not being displayed to any one including to the Organisation
during carrying out of the e-reverse auctioning process?
25. Whether application is fit for usage complying with the requirements of Yes No
tender processing viz Authenticity of tenderer, non-repudiation and secrecy
of information till the actual opening of tenders.
26. Whether any comprehensive third party audit (as per statutory requirement Yes No
and also as per the requirements of e-tender processing (compliance to IT
Act 2000)] was got conducted before first putting it to public use?
27. Whether application complies with the Commission’s Guidelines dated Yes No
17.09.2009 on Security considerations for e-procurement Systems.
Integrity Pact – Selection and Recommendation of Independent

External Monitors (IEMs).
The Commission receives a number of requests for implementation of Integrity Pact in

Government of India organizations and Public Sector Undertakings. Organizations desirous of
implementing Integrity Pact are required to forward at most three names of Independent External Monitors
along with the proposal to the Commission for its approval.
2. The Commission would consider names for appointment of Independent External Monitors of
only those officers of Government of India departments or Public Sector Undertakings, who have retired
from top management positions. The Commission would not consider the name of an officer / executive,
who is either serving or who has retired from the same organization to be an IEM in that organization,
although they may have served in the top management. Eminent persons, executives of private sector of
considerable eminence could also be considered for functioning as Independent External Monitors and
names recommended to the Commission for approval.
3. The appointment of Independent External Monitors would be for an initial period of three years
and could be extended for another term of two years on a request received in the Commission from the
organization appointing the Independent External Monitor. An Independent External Monitor can have a
maximum tenure of 5 years in an organization with an initial term of three years and another term of two
years.
4. Organizations recommending the names of Independent External Monitors are to select and
forward the names to the Commission after due diligence and scrutiny.
Sd/-
(Vineet Mathur)
Director
CVC 16 | P a g e
Tendering Process – Negotiations with L1
Attention is invited to the Commission’s Circular No.4/3/07 dated 3.3.07 on the issued of “Tendering
Process – Negotiations with L1”.
In the said circular it has, among other things, been stated “As post tender negotiations could often be a
source of corruption, it is directed that there should be no post tender negotiations with L1, except in
certain exceptional situations”. It has come to Commission’s notice that this has been interpreted to mean
that there is a ban on the post tender negotiations with L-1 only and there could be post tender negotiations
with other than L1 i.e. L2, L3 etc. this is not correct.
It is clarified to all concerned that – there should normally be no post tender negotiations. If at all
negotiations are warranted under exceptional circumstances, then it can be with L1 (Lowest tenderer) only
if the tender pertains to the award of work/supply orders etc. where the Government or the Government
company has to make payment. However, if the tender is for sale of material by the Government or the
Govt. company, the post tender negotiations are not to be held except with H1 (i.e. Highest tenderer) if
required.
2. All other instructions as contained in the circular of 3.3.2007 remain unchanged.
3. These instructions issue with the approval of the Commission and may please be noted for immediate
compliance.
Sd/-
(V. Ramachandran)
Review of Purchase Preference Policy for Products and Services of

Central Public Sector Enterprises (CPSEs) in view of the judgement of
the Supreme Court of India in the matter of M/s. Caterpillar India Pvt. Ltd. v/s. Western Coalfields
Ltd. and Ors dated 18.5.2007.
The Department of Public Enterprises has issued guidelines vide O.M. No.DPE/13(15)/ 2007-Fin.
Dated 21.11.2007 on the subject cited above which reiterates DPE’s earlier guidelines dated 18.07.2005.
Further, it also provides that Preferential Policy framed for the specific sectors by the concerned
Ministry/Department within relevant Act of Parliament or otherwise don’t come within the purview of
these guidelines. However, the DPE OM Dated 21/11/2007, lays down that the concerned
Ministry/Department may independently evolve/review preferential policies for the sectors of their
concern as per their requirement. A copy of DPE’s O.M dated 21/11/2007 is enclosed for reference.
2. The Commission has desired that if any Ministry/Department has evolved a Purchase Preference
Policy pursuant to the DPE Guidelines, the same may be brought to the notice of the Commission.
Sd/-
(Shalini Darbari)
Director
CVC 17 | P a g e
CHAPTER VI
PRICE/PURCHASE PRERERENCE
12. DPE/Guidelines/VI/12
Review of Purchase Preference Policy for Products and Services of Central Public Sector
Enterprises (CPSEs) in view of the judgement of the Supreme Court of India in the matter of M/s.
Caterpillar India Pvt. Ltd. v/s. Western Coalfields Ltd. and Ors dated 18.5.2007.
The undersigned is directed to refer to this Department’s O.M. no.DPE.13(12)/2003-Fin. Vol.II

dated 18.7.2005 regarding extension of Purchase Preference Policy for Products and Services of CPSEs
for a further period of three years beyond 31.3.2005 with certain modifications.
2. The Supreme Court of India in its judgement in the transferred Civil Petitions of 2004 from the
different High Courts in the matter of M/s. Caterpillar India Pvt. Limited v/s Western Coalfields Limited
and Ors. Observed that imposing a condition like purchase preference no option is left and a monopoly is
being created. Any increase in the effectiveness of PSEs cannot be done on a uniform basis without
examination as to whether such protection is necessary for a particular PSE. Further, it has to be examined
on a case to case basis as to whether any differential treatment is called for. There may not be any
competition left if 10% margin is allowed. It was also contended that the preference should be given PSE
specific and the margin to be allowed should be examined rationally. Because the substitution of the word
‘may’ by ‘will’ there is essentially a reversal of the policy. While giving this judgement, the Supreme
Court also expressed its views which inter-alia includes the following:
(a) Industry-wise assessment to be done by the concerned Ministries and in case of cost effectiveness
is achieved by any PSEs there may not be any need for extending preference to such PSEs. Such
examination should be done on the line as to whether any preference is at al called for and the
extent of margin of preference to be allowed, which would also ensure level playing field for
others. Further, while splitting the tenders, the minimum quantity/amount should be so fixed as to
ensure that it is rational and there is no element of uncertainty. In other words, there should not be
any rigid/inflexible purchase preference policy without examination as to whether such protection
is necessary for a particular PSE.
(b) Present practice of allowing uniform margin of 10% over the L-1 bidder, as purchase preference to
CPSEs, has to be reviewed and margin should be fixed PSE specific by the concerned Ministry on
a rotational basis;
(c) The overall impact of such preference to be allowed on foreign direct investment has also to be
assessed/considered.
The Supreme Court through its judgement dated 18.5.2007 interalia directed that the exercise, as
noted above shall be undertaken by the concerned Ministry of the Central Government within a period of 4
months from the date of the judgement.
3. In view of the above mentioned judgement of the Supreme Court of India, the Government again
reviewed the Purchase Preference Policy for Products and services of Central Public sector Enterprises on
25.10.2007 and decided to reiterate its decision dated 30.6.2005 that the purchase preference policy will be
terminated with effect from 31.3.2008. The Government also decided that the preferential purchase
policies framed for the specific sectors by the concerned Ministries/Departments within relevant Act of
Parliament or otherwise do not come within the purview of this decision. The concerned
CVC 18 | P a g e
Ministry/Department may independently evolve/review preferential policies for the sectors of their
concern, as per their requirement.
4. All the administrative Ministries/Departments are requested to take note of the above mentioned
decision of the Government and also bring it to the notice of the CPSEs under their administrative control
for information and necessary compliance.
(DPE OM No.DPE/13(15)/2007-Fin dated 21st November 2007)
Implementation of e-tendering solutions
Guidelines were prescribed in this office OM of even number, dated 13/01/2009, on the above-
cited subject, advising organizations to follow a fair, transparent and open tendering procedure, to select
the application service provider for implementing their e-tendering solutions.
2. It is clarified that while ensuring fair play, transparency and open tendering procedure for e-
tendering solutions, the organizations must take due care to see that effective security provisions are made
in the system to prevent any misuse. In this regard, the guidelines on security related issues in e-tendering
systems are enclosed for information. Organizations concerned may follow these guidelines while
implementing e-tendering solutions to contain the security related loop holes.
Sd/-
(V. Ramachandran)
Intensive examination of CTE – Steps for early finalization of pending vigilance references with
CVOs- reg.
The Chief Technical Examiner’s Organisation of the Commission conducts independent technical
examination of various types of works/contracts/procurements awarded by the organizations, falling
within the jurisdiction of the Commission. After intensive examination of the work is carried out by the
CTE’s organization, an inspection report is sent to the CVO. The CVO is required to obtain comments of
various officers of the organization at appropriate levels and furnish the same to the CTE alongwith CVOs
comments thereon. In cases, wherein, the CTE recommends investigation of the matter from a vigilance
angle, the CVO of the organization is required to investigate and submit a report/reference to the
Commission.
2. On a review of the pending CTE paras referred for vigilance investigation to the various CVOs,
the Commission observes that a large number of references are pending for submission of reports with the
CVOs inordinately. Another factor which contributes to the delay is absence of clarity and also
incomplete/inconclusive reports/references made by CVOs. In order to sort out the long pending paras
referred for vigilance investigation with the organizations and to appreciate the perceived vigilance angle
in such references of CTE, the CVOs of the organizations may consider arranging interactive discussions
with the CTE either at Delhi or during the visit of CTE at various stations for guidance in the matter of
preparing vigilance investigation reports.
CVC 19 | P a g e
3. The organization-wise list of pending vigilance references of CTE is enclosed as Annexure’A’.

The CVO’s concerned may take further necessary action as suggested in para 2 above expeditiously.
Sd/-
( V.K. Gupta )
Guidelines on Security considerations for e-procurement System
1.0 E-Procurement System
E-procurement provides a platform for the collaborative procurement of goods works and services using
electronic methods at every stage of the procurement process. The e-procurement platform transacts
confidential procurement data and is exposed to several security threats. Agencies World over face threats
to their online e-procurement platforms and the same are addressed by employing a combination of
security features and security best practices which result in reduced threat of data loss, leakage or
manipulation.
2. Security of e-Procurement system.
2.1 Security of e-procurement system is essentially an amalgamated output of Security of

Infrastructure, Application and Management. Assuming the management issues are taken care of the
following aspects of Infrastructure and Application are essential to have a fairly secure e-Procurement.
2.2 Security Infrastructure level:
Issues Best Practices to achieve security considerations

Perimeter Deployment of routers, Firewalls, IPS/IDS, Remote Access and network
Defense segmentation.
Authentication Network authentication through deployment of password policy for accessing the
network resources. To minimize unauthorized access to the e-procurement system at
system level.
Monitoring Deployment of logging at OS/ network level and monitoring the same.
Secure The security of individual servers & workstations is a critical factor in the defence of
configuration of any environment, especially when remote access is allowed. Workstations should
the network host have safeguards in place to resist common attacks.
System patching As the vulnerability of the system are discovered almost regularly and the system
vendors are also releasing the patches.
It is expected the host are patched with latest security updates released by the
vendors.
Control of Suitable control like anti-virus, anti spyware ext. should be deployed on the host
malware associated with e-procurement system. However, option for running the services at
non-privileged user profile may be looked for. Otherwise, suitable operating system
which is immune to virus, Trojan and malware may be deployed.
2.3 Security at Application level:
2.3.1 Security during design.
Authentication The authentication mechanism of the e-procurement application should ensure that
the credentials are submitted on the pages that are server under SSL.
Access Control The application shall enforce proper access control model to ensure that the
parameter available to the user cannot be used for launching any attack.
Session The design should ensure that the session tokens are adequately protected from
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management guessing during an authenticated session.

Error handling The design should ensure that the application does not present user error messages
to the outside world which can be used for attacking the application.
Input validation The application may accept input at multiple points from external sources, such as
users, client applications, and date feeds. It should perform validation checks of the
syntactic and semantic validity of the input. It should also check that input data does
not violate limitations of underlying or dependent components, particularly string
length and character set.
All user-supplied fields should be validated at the server side.
Application Logging should be enabled across all applications in the environment. Log file data
logging and is important for incident and trend analysis as well as for auditing purposes.
monitoring. The application should log failed and successful authentication attempts, changes to
application data including user accounts, serve application errors, and failed and
successful access to resources.
When writing log data, the application should avoid writing sensitive data to log
files.
2.3.2 Security during application deployment and use.
Availability Depending on the number of expected hits and access the options for clustering of
Clustering. servers and load balancing of the web application shall be implemented.
Load balancing.
Application and Suitable management procedure shall be deployed for regular back-up of
data recovery. application and data. The regularity of data backup shall be in commensurate with
the nature of transaction / business translated into the e-procurement system.
Integrity of the Suitable management control shall be implemented on availability of updated
Application control source code and its deployment. Strict configuration control is recommended to
of source code. ensure that the latest software in the production system.
Configuration
management
2.3.3 Security in Data storage and communication.
Issues Best practices to achieve security considerations
Encryption for data Sensitive data should be encrypted or hashed in the database and file system. The
storage. application should differentiate between data that is sensitive to disclosure and
must be encrypted, date that is sensitive only to tampering and for which a keyed
hash value (HMAC) must be generated, and data that can be irreversibly
transformed (hashed) without loss of functionality (such as passwords). The
application should store keys used for decryption separately from the encrypted
data.
Examples of widely accepted strong ciphers are 3DES, AES, RSA, RC4 and
Blowfish. Use 128-bit Keys (1024 bits for RSA) at a minimum.
Data transfer Sensitive data should be encrypted prior to transmission to other components.
security Verify that intermediate components that handle the data in clear-text form, prior
to transmission or subsequent to receipt, do not present an undue threat to the data.
The application should take advantage of authentication features available within
the transport security mechanism.
Specially, encryption methodology like SSL must be deployed while
communicating with the payment gateway over public network.
Issues Best practices to achieve security considerations
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Access control. Applications should enforce an authorization mechanism that provides access to
sensitive data and functionality only to suitably permitted users or clients.
Role-based access controls should be enforced at the database level as well as at
the application interface.
This will protect the database in the event that the client application is exploited.
Authorization checks should require prior successful authentication to have
occurred.
All attempts to obtain access, without proper authorization should be logged.
Conduct regular testing of key applications that process sensitive data and of the
interfaces available to users from the Internet Include both “black box” informed”
testing against the application. Determine if users can gain aces to data from other
accounts.
3.0 Some of the other good practices for implementers of e-procurement to achieve security
considerations are as follows:
3.1 Common unified platform for all department.
A single platform to be used by all departments across a State / Department / Organisations reduces the
threat to security of data. With a centralized implementation, where in the procurement data is preferably
hosted and maintained by the State / Department / Organisations itself, concerns of security and ownership
of data are well addressed. A common platform further facilitates demand aggregation of common items
across State / Department / Organisations, and result in economies of scale.
3.2 Public key Infrastructure (PKI) Implementation
This is one of the most critical security features that are required to be implemented in order to establish
non-repudiation and to ensure the security of the online system. Under the system, participating
contractors and suppliers, as well as the departmental users, are issued a Digital Signature Certificate
(DSC) by a licensed Certification Authority.
3.3 Third Party Audit
It is recommended that the implemented solution be audited by a competent third party at-lease once a
year.
Through the above-mentioned steps, the complete security of the system and the transacted data can be
ensured and may be communicated to all concerned agencies.
Adoption of Integrity Pact – Periodical regarding

The Commission in its various circular has emphasized the necessity to adopt Integrity Pact (IP) in
Government Organizations in their major procurement activities. The Commission had also directed that
in order to oversee the compliance of obligations under the Pact, by the parties concerned, Independent
External Monitors (IEMs) should be nominated with the approval of the Commission, out of a panel of
names proposed by an Organization.
2. Further, the Commission vide its circular No.10/5/09 dated 18.5.09 provided a review system for
the CVOs wherein and internal assessment of the impact of Integrity Pact are to be carried out periodically
and reported to the Commission. In this regard, it is clarified that such review should be on annual basis.
The Organization which has adopted Integrity Pact may report compliance of review through monthly
report.
3. This may be noted for future compliance.
Sd/-
(Shalini Darbari)
Director
CVC 22 | P a g e
Posting of details on award of tenders/contracts on websites.
The Commission vide circulars dated 16.03.2005, 28.07.2005 and 18.04.2007 had directed all
organisations to post on their web-sites a summary, every month, containing details of all the
contracts/purchases made above a threshold value (to be fixed by the organisations) covering atleast 60%
of the value of the transactions every month to start with on a continuous basis. CVOs were required to
monitor the progress and ensure that the requisite details were posted regularly on respective websites, and
also to incorporate compliance status in their monthly report to the Commission.
2. On a review of the status of implementation by the organisations, it is observed that some

organisations have not adhered to the instructions and implemented the same. Further, such information
being posted on the websites are not being regularly updated on a continuous basis by certain
organizations and, in some cases, the information published is disjointed and not as per the prescribed
format laid down by the Commission. It is also seen that a few organisations have placed such information
on restricted access through passwords to registered vendors/suppliers etc. which defeats the basic purpose
of increasing transparency in administration.
3. The Commission, therefore, while reiterating its aforementioned instructions would direct all
organisations/departments to strictly adhere and post summary of details of contracts/ purchases awarded
so as to cover 75% of the value of the transactions without any further delay. Any failure on the part of the
organisations on this account would be viewed seriously by the Commission.
4. All Chief Vigilance Officers should reflect the compliance status in their monthly reports to the
Commission after personally verifying the same.
Sd/-
(Shalini Darbari)
Director
Adoption of Integrity Pact – Standard Operating Procedure – reg.

The Commission has formulated “Standard Operating Procedure” for adoption of Integrity Pact in
major Govt. Department/organisations. A copy of the same is enclosed for information and necessary
action.
Sd/-
(Shalini Darbari)
Director
Subject: Adoption of Integrity Pact –Standard Operating Procedure-reg.
1.0 Background
1.01 The Central Vigilance Commission has been promoting Integrity, transparency, equity and
competitiveness in Government/PSU transactions and as a part of vigilance administration and
superintendence. Public procurement is a major area of concern for the Central Vigilance Commission and
various steps have been taken to put proper systems in place. Leveraging technology, especially wider use
of the web sites for disseminating information on tenders, clearly defining the pre qualification criteria and
other terms and conditions of the tender are some of the steps recently taken at the instance of the
Commission. In this context, Integrity Pact (IP), a vigilance tool conceptualized and promoted by the
Transparency International, has been found to be useful. The Commission has, through its Office Orders
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No. 41/12/07 dated 04.12.07 and 43/12/07 dated 28.12.07 and Circulars No. 18/05/08 dated 19.05.08 and
24.08.08 dated 05.08.2008 (copies appended), recommended adoption of Integrity Pact and provided basic
guidelines for its implementation in respect of major procurements in the Government Organizations.
2.0 Integrity Pact
2.01 The pact essentially envisages an agreement between the prospective vendors/bidders and the
buyer, committing the persons/officials of both sides, not to resort to any corrupt practices in any
aspect/stage of the contract. Only those vendors/bidders, who commit themselves to such a Pact with the
buyer, would be considered competent to participate in the bidding process. In other words, entering into
this Pact would be a preliminary qualification. The essential ingredients of the Pact include:
 Promise on the part of the principal not to seek or accept any benefit, which is not legally
available;
 Principal to treat all bidders with equity and reason;
 Promise on the part of bidders not to offer any benefit to the employees of the Principal not
available legally;
 Bidders not to enter into any undisclosed agreement or understanding with other bidders with
respect to prices, specifications, certifications, subsidiary contracts, etc.
 Bidders not to pass any information provided by Principal as part of business relationship to
others and not to commit any offence under PC/ IPC Act;
 Foreign bidders to disclose the name and address of agents and representatives in India and
Indian Bidders to disclose their foreign principals or associates;
 Bidders to disclose the payments to be made by them to agents / brokers or any other
intermediary.
 Bidders to disclose any transgressions with any other company that may impinge on the anti
corruption principle.
2.02 Integrity Pact, in respect of a particular contract, would be operative from the stage of invitation of
bids till the final completion of the contract. Any violation of the same would entail disqualification of the
bidders and exclusion from future business dealings.
3.0 Implementation procedure:
3.01 Adoption of IP is voluntary for any organization, but once adopted, it should cover all tenders
/procurements above a specified threshold value.
3.02 The threshold value for the contracts to be covered through IP should be decided after conducting
proper ABC analysis and should be fixed so as to cover 90-95% of the total procurements of the
organization in monetary terms.
3.03 Apart from all high value contracts, any contract involving complicated or serious issues could be
brought within the ambit of IP, after a considered decision of the management
3.04 The Purchase / procurement wing of the organization would be the focal point for the
implementation of IP.
3.05 The Vigilance Department would be responsible for review, enforcement, and reporting on all
related vigilance issues.
3.06 It has to be ensured, through an appropriate provision in the contract, that IP is deemed as part of
the contract so that the parties concerned are bound by its provisions.
3.07 IP should cover all phases of the contract, i.e. from the stage of Notice Inviting Tender (NIT)/pre-
bid stage till the conclusion of the contract, i.e. the final payment or the duration of warranty/ guarantee.
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3.08 IP would be implemented through a panel of Independent External Monitors (IEMs), appointed by
the organization. The IEM would review independently and objectively, whether and to what extent
parties have complied with their obligations under the Pact.
3.09 Periodical Vendors’ meets, as a familiarization and confidence building measure, would be
desirable for a wider and realistic compliance of the principles of IP.
3.10 Information relating to tenders in progress and under finalization would need to be shared with the
IEMs on monthly basis.
4.0 Role /Functions of IEMs :
4.01 IEM would have access to all Contract documents, whenever required. Ideally, all IEMs of an
organization should meet in two months to take stock of the ongoing tendering processes.
4.02. It would be desirable to have structured meeting of the IEMs with the Chief Executive of the
organization on a monthly basis to discuss/review the information on tenders awarded in the previous
month.
4.03 The IEMs would examine all complaints received by them and give their recommendations/ views
to the Chief Executive of the organization, at the earliest. They may also send their report directly to the
CVO and the Commission, in case of suspicion of serious irregularities requiring legal/ administrative
action.
4.04 At least one IEM should be invariably cited in the NIT. However, for ensuring the desired
transparency and objectivity in dealing with the complaints arising out of any tendering process, the matter
should be examined by the full panel of IEMs, who would look into the records, conduct an investigation,
and submit their joint recommendations to the Management
4.05 The recommendations of IEMs would be in the nature of advice and would not be legally binding.
At the same time, it must be understood that IEMs are not consultants to the Management. Their role is
independent in nature and the advice once tendered would not be subject to review at the request of the
organization.
4.06 The role of the CVO of the organization shall remain unaffected by the presence of IEMs. A
matter being examined by the IEMs can be separately investigated by the CVO in terms of the provisions
of the CVC Act or Vigilance Manual, if a complaint is received by him or directed to him by the
Commission.
5.0 Appointment of IEMs:
5.01 The IEMs appointed should be eminent personalities of high integrity and reputation. The
Commission would approve the names of IEMs out of the panel of names, initiated by the organization
concerned, in association/consultation with the CVO.
5.02 While forwarding the panel, the organization would enclose detailed bio-data in respect of all
names proposed. The details would include postings before superannuation, special achievements,
experience, etc., in Government sector. It is desirable that the persons proposed possess domain experience
of the PSU activities or the relevant field with which they may be required to deal.
5.03 A maximum of three IEMs would be appointed for Navratna PSUs and up to two IEMs for others.
5.04 Organizations could propose a panel of more than three names for the consideration of the
Commission.
5.05 Persons appointed as IEMs in two organizations would not be considered for a third organization.
5.06 For PSUs having a large territorial spread or those having several subsidiaries, there could be
more IEMs, but not more than two IEMs would be assigned to one subsidiary.
5.07 Remuneration payable to the IEMs would be equivalent to that admissible to an Independent
Director in the organization. This remuneration would be paid by the organization concerned.
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5.08 The terms and conditions of appointment, including the remuneration payable to the IEMs, should
not be included in the Integrity Pact or the NIT. They could be communicated individually to the IEMs
concerned.
5.09 The normal term of appointment for an IEM would be 3 years, and it would be subject to renewal
by the Commission thereafter.
6.0 Review System:

6.01 An internal assessment of the impact of IP shall be carried out periodically by the CVOs of the
organizations and reported to the Commission.
6.02 Two additional reviews are envisaged for each organization in due course.
(i) Financial impact review, which could be conducted through an independent agency like
auditors, and
(ii) Physical review, which could be done through an NGO of tested credibility in the particular
field.
6.03 It is proposed to include the progress in the implementation of IP in the Annual Report of the
Commission. CVOs of all organizations would keep the Commission posted with the implementation
status through their monthly reports or special reports, wherever necessary.
7.0 All organizations are called upon to make sincere and sustained efforts to imbibe the spirit and
principles of the Integrity Pact and carry it to its effective implementation.
Enclosures: All earlier guidelines, issued by the Central Vigilance Commission, on the subject.
Implementation of e-tendering solutions
References are being received by the Commission regarding the methodology for selection of sole
application service provider for the implementation of e-tending solutions in various organizations. The
Commission has examined the matter and is of the view that all organizations should invariably follow a
fair, transparent and open tendering procedure to select the application service provider for implementing
their e-tendering solutions. The standard guidelines on tendering procedure should hold good the
procurement of these services as well.
Sd/-
( Shalini Darbari )
Director
Time bound processing of procurement
The Commission has observed that at times the processing of tenders is inordinately delayed
which may result in time and cost overruns and also invite criticism from the Trade Sector. It is, therefore,
essential that tenders are finalized and contracts are awarded in a time bound manner within original
validity of the tender, without seeking further extension of validity. While a short validity period calls for
prompt finalization by observing specific time-line for processing, a longer validity period has the
disadvantage of vendors loading their offers in anticipation of likely increase in costs during the period.
Hence, it is important to fix the period of validity with utmost care.
2. The Commission would, therefore, advise the organizations concerned to fix a reasonable time for
the bids to remain valid while issuing tender enquiries, keeping in view the complexity of the tender, time
required for processing the tender and seeking the approval of the Competent Authority, etc., and to ensure
the finalization of tender within the stipulated original validity. Any delay, which is not due to unforeseen
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circumstances, should be viewed seriously and prompt action should be initiated against those found
responsible for non-performance.
3. Cases requiring extension of validity should be rare. And in the exceptional situations where the
validity period is sought to be extended, it should be imperative to bring on record in real time, valid and
logical grounds, justifying extension of the said validity.
4. These instructions may please be noted for immediate compliance.
Sd/-
(Shalini Darbari)
Director
Adoption of Integrity Pact in major Government Procurement Activities.
The Commission, vide its Circulars No. 41/12/07, dated 4.12.07 and 18/5/08 dated 19.5.08, has
emphasized the necessity to adopt Integrity Pact (IP) in Government organizations in their major
procurement activities. The Commission had also directed that in order to oversee the compliance of
obligations under the Pact, by the parties concerned, Independent External Monitors (IEMs) should be
nominated with the approval of the Commission, out of a panel of names proposed by an Organization.
2. As more and more organizations begin to adopt the Integrity Pact, several queries and operational
issues have been raised. The Commission has examined these issues and suggested the following
guidelines:
i) Adoption of Integrity Pact in an organization is voluntary, but once adopted, it should cover
all tenders/procurements above a specified threshold value, which should be set by the
organization itself.
ii) IP should cover all phases of the contract i.e., from the stage of Notice Inviting
Tender(NIT)/pre-bid stage to the stage of last payment or a still later stage, covered through
warranty, guarantee etc.
iii) IEMs are vital to the implementation of IP and at least one IEM should be invariably cited in
the NIT. However, for ensuring the desired transparency and objectivity in dealing with the
complaints arising out of any tendering process, the matter should be referred to the full panel
of IEMs, who would examine the records, conduct the investigation and submit a report to the
management, giving joint findings.
iv) A maximum of three IEMs would be appointed in Navratna PSUs and upto two IEMs in other
Public Sector Undertakings. The organizations may, however, forward a panel of more than
three names for the Commission’s approval. For the PSUs having a large territorial spread or
those having several subsidiaries, the Commission may consider approving a large number of
IEMs, but not more than two IEMs would be assigned to any one subsidiary.
v) Remuneration payable to the IEMs Directors in the organization.
vi) In view of limited procurement activities in the Public Sector Banks, Insurance Companies
and Financial Institution, they are exempted from adopting IP.
3. It needs no reiteration that all organizations must make sustained efforts to realize the spirit and
objective of the Integrity Pact. For further clarifications on its implementation or the role of IEMs, all
concerned are advised to approach the Commission.
Sd/-
(Rajiv Verma)
Under Secretary
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Referring cases of Procurement to the Commission
The Commission has noted a significant rise in the number of references made to it involving
procurement at different stages. These relate to specific cases and are not generic in nature. Essentially
they belong to the domain of managerial decision making and the matter needs to be decided at that level.
The Central Vigilance Commission and its Chief Vigilance Officers, as a matter of policy do not
interfere in the process of decision making, which is a management function of the respective
organization.
The Commission has issued various circulars/guidelines /instructions in order to promote

transparency, improve competition and ensure equity among participants. However, if any organization
faces difficulty in the application of any of the circulars/guidelines/instructions issued by the Commission,
then it may approach the Commission bringing out the difficulties along with a proposed generic solution
listing out the ingredients of the special circumstances for examination and review by the Commission.
References of a general nature having elements of managerial decision making and concerning a particular
procurement should be avoided.
Sd/-
(V. Ramachandran)
Chief Technical Examiner,
Central Vigilance Commission

Adoption of Integrity Pact in major Government Procurement Activities – regarding.
The Commission vide its office order no. 41/12/07 dated 4/12/07 had circulated a letter no.
007/vgl/033 emphasizing the need to adopt Integrity Pact (IP) by government organizations in respect of
their major procurement activities. The Commission had also directed that in order to ensure compliance
with the obligations under the pact by the parties concerned, Independent External Monitors (IEMs) are to
be appointed after obtaining approval of the Commission for the names to be included in the panel.
2. As the role of IEMs is very important in ensuring implementation of the IP, it is necessary that the
persons recommended for appointment have adequate experience in the relevant fields and are of high
integrity and reputation.
3. The Commission would, therefore, direct that the organizations, while forwarding the names of
the persons for empanelment as IEMs should sent a detailed bio-data in respect of the each of the persons
proposed. The bio-data should, among other things, include the postings during the last ten years before
the superannuation of the persons proposed as IEMs, in case the names relate to persons having worked in
the government sector. The bio-data should also include details regarding experience older than ten years
before superannuation of the persons proposed as IEMs, if they have relevant domain experience in the
activities of PSUs where they are considered as IEMs.
This may be noted for future compliance.

Sd/-
(Rajiv Verma)
Under Secretary
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Two day Work shop/ Seminar regarding IT Procurement held in June 2007 at Bank of India,
Mumbai.
Minutes of the above seminar were circulated vide letter no 3/CTE (2)- VR/2007 dated 3.10.2007.
It has come to the notice of the Commission that despite specific instructions / guidelines and booklets
issued by the Commission from time to time, and the holding of an exclusive seminar referred to above for
the benefit of the Bank’s executives dealing with IT procurements along with respective CVO’s, Bank
officials do not appear to adhere to these instructions / guidelines as expected of them, which leaves room
for various irregularities. As such Commission desires that you organize seminars/workshops and lecture
classes at frequent intervals to keep the officials of the bank, particularly those dealing with procurement
activities educated and updated regarding procurement procedures, CVC guidelines.
Instances have also come to the notice of the Commission indicating that a number of bank
officials lack basic skills in computer operations and knowledge of the banking software. There is also a
tendency on the part of senior officers to disclose their password to junior officials / staff for operating the
system on their behalf, citing reasons, including work pressure and ignorance which you would appreciate
is not acceptable. Therefore, there is an urgent need to impart proper training to such officers and staff at
various levels particularly those working in the branches so that they have up-to-date knowledge of the
computer system for day to day operations and are not dependent on their colleagues. You are,
accordingly, advised to arrange such programmes for training on an on going basis for the benefit of bank
officials. Please note to keep the Commission apprised of the steps taken in this regard and the progress so
achieved.
Receipt of this communication may please be acknowledged.

Sd/-
(V. Ramachandran)
Measures to curb the menace of counterfeit and refurbished IT products - regarding
With the increasing use of IT to leverage technology, a large number of Government organizations
are either upgrading or in the process of procurement of new computer hardware and software. It is often
difficult to know the difference between PC made of “Genuine Parts” and that made of “Counterfeit
Parts”. It may also be the case often that while various organisations order and pay for brand new
equipment, they end up getting an inferior PC with counterfeit and second hand/refurbished parts
disguised as new in new/ original cabinets to various customers designated as consignees by the ordering
agencies at the headquarters of these organizations who are ignorant or have little or no technical
knowledge in the matter.
In effect, this amounts to the organisation not getting what they actually ordered and paid for. The
supplies of such PC in the long run would defeat the very purpose of going for a new system.
COUNTERFEITING is designed to cheat naive consumers/organizations.
This current circular is intended to help/ inform and enable due diligence as well as curbing the
menace of counterfeit and refurbished IT products disguised as new.
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As a first step, there is a need for all buyers in the Government Departments/ PSU to insist on a
signed undertaking (sample format enclosed) from some authority not lower than the Company Secretary
of the system OEM that would certify that all the components/parts/ assembly/software used in the
Desktops and Servers like Hard disk, Monitors, Memory etc were original/new
components/parts/assembly/software, and that no refurbished/duplicate/ second hand components /parts /
assembly / software were being used or would be used, so that the buying organizations were not cheated
and get the original equipments as ordered by them. Also one could ask for ‘Factory Sealed Boxes’ with
System OEM seal to ensure that the contents have not been changed en route.
Following advisory checkpoints it is hoped shall help identify the fraudulent practices that have
come to notice and help guard against spurious and refurbished/duplicate/ second hand components/parts/
assembly / software being received by purchasers and consignees who receive such goods and may not
have much technical knowledge.
1. CPU.Buyers are cautioned against buying IT Hardware with remarked CPUs that are freely / readily
available in the market today. Entry Level processors get Remarked / Over clocked and sold as high end
processors. These CPUs, come disguised as higher clock speed processors (e.g. a Celeron CPU can be
remarked as a P4 CPU) while their real clock speed may be lower. Since Operating System is loaded from
CD bundled with Motherboard, the CD contains image of configured OS. Hence information as seen in
‘My Computer’ – ‘System Properties’ shall give deceptive information. In other words, a Celeron CPU
remarked as a P4 CPU, shall be seen as a P4 CPU only.
Buyers should therefore, use various tool / utilities like the ‘CPU-Z’ Utility or the ‘sSpecNo.’ for
ascertaining the real parameters of the CPU. Utility like CPU-Z (appox. 1.3 MB size) are available free on
the web.
2. Hard Disk IT Hardware with refurbished Hard Disks that are actually 2nd hand / repaired hard disks
are readily available at low cost. In hard disk drives, the factory repaired hard disk drives, which are
mainly used in the warranty replacements are substituted in the new machines. Same is the case observed
with floppy drive and Optical disk drives many times. Most of the competent hard disk makers use a
sticker on such hard disks sold by them that clearly distinguishes such hard disks from the fresh ones. For
example, manufacturer ‘Seagate’ marks Green Border and label of “Certified Repaired HDD” to
distinguish such disk drives from New Genuine HDD. There is No border or Refurbished label on
genuine new HDD.
In addition to this, buyers may also use HDTUNE_210 Utility. This utility shall return Hard Disk
Manufacturers’ Serial no. and Date of manufacturing of the Hard Disk. These parameters can be used to
cross-verify with the hard disk vendor. Various Hard Disk vendors also put a date code on the hard disk. A
mismatch between this date and the one returned by HDTUNE_210 Utility can also be viewed as
tampering with the actual information of the hard disk.
3. Monitors. IT Hardware with refurbished Monitors that are actually 2nd hand / repaired monitors are
given a “new look” by changing the body, with internal components remaining “old / repaired”. These
CRT monitors are usually discarded from developed countries like US and Europe. There are also B Grade
(New but Low Quality) CRT Monitors used in place of new monitors. Many times these can be
distinguished by opening the cabinet body and noticing that the label on the tube does not carry various
certifications and there are scratch marks on the tube. While ‘Genuine’ Picture Tubes have all mandatory
Certifications, ‘Counterfeit’ Picture Tubes would not have these certifications. Certification gives an
assurance of Reliability.
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Further many such cathode ray tubes (Picture Tubes) are found to need extra magnets to achieve focusing
and earthing also is missing. Genuine Monitors rely on ‘Yoke Coil’ alone to focus electronic beam.
Counterfeit Monitors typically require Numerous Magnetic Strips in addition to Yoke Coil to focus
electronic beam. Further, ‘Earthing’ and ‘Shielding’ provide ESD (Electro Static Discharge) protection.
Genuine Picture Tubes have proper “Earthing and Shielding”. Earthing and Shielding is compromised
in counterfeit Picture Tubes to reduce cost.
In ‘B’ Grade LCD Monitors, panels used are B grade in which the number of spots may be higher,
response time & brightness of lower specs than what is stated.
Above monitors are all available at low cost.

The “Signed Undertaking” as suggested shall serve as a deterrent and as a safeguard to ensure that
bidders are not fleecing them by supplying such monitors.
4. Operating System. Purchasers should check the IT Hardware supplied (randomly selected IT
Hardware) for Certificate of Authenticity (COA) pasted on the PC for product serial number and OEM’s /
Supplier’s name to be printed on it. In Operating systems, pirated OS software with fake Certificates of
Authenticity are used by some suppliers to cut costs. They look as good as the real ones. In PCs,
counterfeiters buy legitimate software and copy the box design and packaging. Using sophisticated and
expensive copiers, many copies of illegal CDs are created in a day. Purchasers should guard against
buying IT Hardware with pirated copies of Operating Systems. Such Operating Systems, though, available
at low prices, do not have the updated patches and security features that help safeguarding the PC and also
improve its lifespan. Purchasers, therefore, may use the standard testing procedures (randomly on
randomly selected IT Hardware) available on the following URL for ascertaining the in authenticity of the
operating system installed on their PC:
http://www.microsoft.com/resources/howtotell/ww/windows/default.mspx .
Microsoft provides an inbuilt tool to diagnose the “Genuineness of its Operating System”. One could go to
‘My Documents’, and ‘Help’, from where one shall get step by step instructions to find out whether the
windows installed is genuine.
http://www.microsoft.com/resources/howtotell/ww/windows/default.mspx
5. Mechanical Keyboards:Fake mechanical keyboards that are partially mechanical, with only the key
plunger being that of a real mechanical keyboard and rest of the keyboard features remaining the same as
those of membrane keyboard are being passed on as true mechanical keyboards. While these keyboards
are available at low prices, they do not offer the robustness and long key-stroke life expected of a real
mechanical keyboard. Real Mechanical Keyboards are expected to have Keystroke life of 50 Million as
against 10 million for Membrane and Semi-
Mechanical Keyboards. In case of bulk orders, it is recommended to physically examine a few keyboards
for their construct to ascertain the genuineness of their being real mechanical keyboards.
6. Low Quality Memory Module –Memory chips are remarked or downgraded wafers are plastic packed
under unknown brands or remarked with names of well known brands. Such memory modules have lower
performance levels. It is better to go in for proven reputed brands such as Kingston, Transcend, Corsair,
Samsung and Hynix to name a few available in the market.
7. Fraudulently Marked SMPS – In power supplies, wrong marking of the wattage is done. The power
supplies do not carry all required certifications. While ‘Genuine’ Power supplies carry all mandatory
certifications, in counterfeit Power supplies these certifications shall be found missing. Further Short
circuit & over voltage protection circuitry could be missing in counterfeit Power Supply to reduce cost.
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8. Counterfeited Consumables –Counterfeited consumables such as printer cartridges etc are used which
are refilled with ink of poor quality leading to poor performance and clogging, smudging in printers etc. It
is advisable to buy such consumables from OEM authorized suppliers or distributors to ensure quality and
longevity of the printer equipment.
Sd/-
(V. Ramachandran)
Chief Technical Examiner, Central Vigilance Commission
Annexure: Model Undertaking of Authenticity form
Sub: Undertaking of Authenticity for Desktops and Server Supplies
Sub: Supply of IT Hardware/Software -- Desktops and Servers

Ref: 1. Your Purchase Order No. ------------dated-------.
2. Our invoice no/Quotation no. --------dated-------.
With reference to the Desktops and Servers being supplied /quoted to you vide our invoice no/quotation
no/order no. Cited above, ----
We hereby undertake that all the components/parts/assembly/software used in the Desktops and Servers
under the above like Hard disk, Monitors, Memory etc shall be original new components/parts/ assembly
/software only, from respective OEMs of the products and that no refurbished/duplicate/ second hand
components/parts/ assembly / software are being used or shall be used.
We also undertake that in respect of licensed operating system if asked for by you in the purchase order,
the same shall be supplied along with the authorised license certificate e.g. Product Keys on Certification
of Authenticity in case of Microsoft Windows Operating System) and also that it shall be sourced from the
authorised source e.g Authorised Microsoft Channel in case of Microsoft Operating System).
Should you require, we hereby undertake to produce the certificate from our OEM supplier in support of
above undertaking at the time of delivery/installation. It will be our responsibility to produce such letters
from our OEM supplier’s at the time of delivery or within a reasonable time.
In case of default and we are unable to comply with above at the time of delivery or during installation, for
the IT Hardware/Software already billed, we agree to take back the Desktops and Servers without demur,
if already supplied and return the money if any paid to us by you in this regard. We (system OEM name)
also take full responsibility of both Parts & Service SLA as per the content even if there is any defect by
our authorized Service Centre/ Reseller/SI etc.
Authorised Signatory
Name:
Designation
Place
Date
Corrigendum
Mobilisation Advance
The Commission has reviewed the existing guidelines on ‘Mobilisation Advance’ circular No.
10/4/07 (issued vide OM No. 4CC-1-CTE-2 dated 10.4.2007). Para 1 of the above circular may be read as
under –
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“Decision to stipulate interest free mobilization advance in the tender document should rest at the
level of Board (with concurrence of finance) in the organizations. However, in case of interest
bearing mobilization advance, organizations may delegate powers at appropriate levels such as the
CMD or Functional Directors”.
Sd/-
( Vineet Mathur )
Deputy Secretary
Acceptance of Bank Guarantees

A number of instances have come to the notice of the Commission where forged / fake bank
guarantees have been submitted by the contractors/suppliers. Organizations concerned have also not made
any effective attempt to verify the genuineness / authenticity of these bank guarantees at the time of
submission.
2. In this background, all organizations are advised to streamline the system of acceptance of bank
guarantees from contractors/suppliers to eliminate the possibility of acceptance of any forged/fake bank
guarantees.
3. The guidelines on this subject issued by Canara Bank provides for an elaborate procedure, which
may be found helpful for the organizations in eliminating the possibility of acceptance of forged/fake bank
guarantees. The guidelines issued by Canara Bank provides that-
“The original guarantee should be sent to the beneficiary directly under Registered Post (A.D.).
However, in exceptional cases, where that guarantee is handed over to the customer for any
genuine reasons, the branch should immediately send by Registered Post (A.D.) an unstamped
duplicate copy of the guarantee directly to the beneficiary with a covering letter requesting them
to compare with the original received from their customer and confirm that it is in order. The A.D.
card should be kept with the loan papers of the relevant guarantee.
At times, branches may receive letters from beneficiaries, viz., Central/State Governments, public
sector undertakings, requiring bank’s confirmation for having issued the guarantee. Branches must
send the confirmation letter to the concerned authorities promptly without fail.”
4. Therefore, all organizations are advised to evolve the procedure for acceptance of BG, which is
compatible with the guidelines of Banks/Reserve Bank of India. The steps to be ensured should include –
i) Copy of proper prescribed format on which BGs are accepted from the contractors should
be enclosed with the tender document and it should be verified verbatim on receipt with
original document.
ii) It should be insisted upon the contractors, suppliers etc. that BGs to be submitted by them
should be sent to the organization directly by the issuing bank under Registered Post
(A.D.).
iii) In exceptional cases, where the BGs are received through the contractors, suppliers etc.,
the issuing branch should be requested to immediately send by Registered Post (A.D.) an
unstamped duplicate copy of the guarantee directly to the organization with a covering
letter to compare with the original BGs and confirm that it is in order.
iv) As an additional measure of abundant precaution, all BGs should be independently
verified by the organizations.
v) In the organization/unit, one officer should be specifically designated with responsibility
for verification, timely renewal and timely encashment of BGs.
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5. Keeping above in view, the organizations may frame their own detailed guidelines to ensure that
BGs are genuine and encashable.
6. Receipt of the above guidelines should be acknowledged.
Sd/-
Smt. Padmaja Verma
Adoption of Integrity Pact in major Government Procurement Activities – regarding
Reference is invited to Commission’s office order No.41/12/2007 circulated vide letter of even
No. dated 4/12/2007 on the aforementioned subject.
2. The Commission vide para 4 of the aforementioned office order had directed that the
organizations were required to forward a panel of names of the eminent persons of high integrity through
their administrative ministries for consideration and approval by the Commission as IEMs.
3. The matter has been reconsidered by the Commission and in order to simplify the procedure and
avoid delay, it has been decided that the organizations may forward the panel of names of eminent persons
for appointment and consideration as IEMs directly to the Commission for approval.
4. Para 4 of the Commission’s circular cited above stands amended to this extent.
Sd/-
Vineet Mathur
Deputy Secretary
Adoption of Integrity Pact in

Major Government Procurement Activities – regarding.
Ensuring transparency, equity and competitiveness in public procurement has been a major
concern of the Central Vigilance Commission and various steps have been taken by it to bring this about.
Leveraging technology specially wider use of the web-sites for disseminating information on tenders,
tightly defining the pre-qualification criteria and other terms and conditions of the tender are some of the
steps recently taken at the instance of the Commission in order to bring about greater transparency and
competition in the procurement/award of tender.
2. In this context, Integrity Pact, a vigilance tool first promoted by the Transparency International,
has been found to be useful. The Pact essentially envisages an agreement between the prospective
vendors/bidders and the buyer committing the persons/officials of both the parties, not to exercise any
corrupt influence on any aspect of the contract. Only those vendors/bidders who have entered into such an
Integrity Pact with the buyer would be competent to participate in the bidding. In other words, entering
into this Pact would be a preliminary qualification. The Integrity Pact in respect of a particular contract
would be effective from the stage of invitation of bids till the complete execution of the contract.
3. The Integrity Pact envisages a panel of Independent External Monitors (IEMs) approved for the
organization. The IEM is to review independently and objectively, whether and to what extent parties have
complied with their obligations under the Pact. He has right to access to all project documentation. The
Monitor may examine any complaint received by him and submit a report to the Chief Executive of the
organization, at the earliest. He may also submit a report directly to the CVO and the Commission, in case
CVC 34 | P a g e
of suspicion of serious irregularities attracting in provisions of the PC Act. However, even though a
contract may be covered by an Integrity Pact, the Central Vigilance Commission may, at its discretion,
have any complaint received by it relating to such a contract, investigated.
4. The Commission would recommend the Integrity Pact concept and encourage its adoption and
implementation in respect of all major procurements of the Govt. organizations. As it is necessary that the
Monitors appointed should be of high integrity and reputation, it has been decided that the Commission
would approve the names of the persons to be included in the panel. The Government Organizations are,
therefore, required to submit a panel of names of eminent persons of high integrity and repute and
experience in the relevant field, through their administrative Ministry, for consideration and approval by
the Commission as Independent External Monitors. The terms and conditions including the remuneration
payable to the Monitors need not be a part of the Integrity Pact and the same could be separately
communicated. It has also to be ensured by an appropriate provision in the contract, that the Integrity Pact
is deemed as part of the contract in order to ensure that the parties are bound by the recommendation of the
IEMs, in case any complaint relating to the contract, is found substantiated.
5. A copy of the Integrity Pact, which the SAIL got vetted by the Addl. Solicitor General is available
on the Commission’s web-site i.e. www.cvc.nin.in as an attachment to this Office Order in downloadable
form, which may be used in original or may be suitably modified in order to meet the individual
organization’s requirements.
Sd/-
Vineet Mathur
Deputy Secretary
Transparency in Works/Purchase/Consultancy contracts

awarded on nomination basis
Reference is invited to the Commission’s circular No.15/5/06 (issued vide letter No.005/CRD/19
dated 9.5.2006), wherein the need for award of contracts in a transparent and open manner has been
emphasized.
2. A perusal of the queries and references pertaining to this circular, received from various
organizations, indicates that several of them believe that mere post-facto approval of the Board is
sufficient to award a contracts on nomination basis rather than the inevitability of the situation, as
emphasized in the circular.
3. It is needless to state that tendering process or public auction is a basic requirements for the
award of contract by any Government agency as any other method, especially award of contract on
nomination basis, would amount to a breach of Article 14 of the Constitution guaranteeing right to
equality, which implies right to equality to all interested parties.
4. A relevant extract from the recent Supreme Court of India judgement in the case of Nagar Nigam,
Meerut Vs A1 Faheem Meat Export Pvt. Ltd. [arising out of SLP(civil) No.10174 of 2006] is reproduced
below to reinforce this point.
“The law is well-settled that contracts by the State, its corporations, instrumentalities and agencies
must be normally granted through public auction/public tender by inviting tenders from eligible
persons and the notifications of the public-auction or inviting tenders should be advertised in well
known dailies having wide circulation in the locality with all relevant details such as date, time
and place of auction, subject matter of auction, technical specifications, estimated cost, earnest
money deposit, etc. The award of Government contracts through public-auction/public tender is to
ensure transparency in the public procurement, to maximize economy and efficiency in
Government procurement, to promote healthy competition among the tenderers, to provide for fair
CVC 35 | P a g e
and equitable treatment of all tenderers, and to eliminate irregularities, interference and corrupt
practices by the authorities concerned. This is required by Article 14 of the Constitution.
However, in rare and exceptional cases, for instance, during natural calamities and emergencies
declared by the Government; where the procurement is possible from a single source only; where
the supplier or contractor has exclusive rights in respect of the goods or services and no reasonable
alternative or substitute exists; where the auction was held on several dates but there were no
bidders or the bids offered were too low, etc., this normal rule may be departed from and such
contracts may be awarded through ‘private negotiations’.”
(Copy of the full judgement is available on the web-site of the Hon’ble Supreme Court of India,
i.e., www.supremecourtofindia.nic.in )
5. The Commission advises all CVOs to formally apprise their respective Boards/ managements of
the above observations as well as the full judgement of the Hon’ble Supreme Court for necessary
observance. A confirmation of the action taken in this regard may be reflected in the CVO’s monthly
report.
6. Further, all nomination/single tender contracts be posted on the website
Sd/-
(Rajiv Verma)
Under Secretary
Use of Products with standard specification
A case has come to the notice of the Commission that the user department one organization
requisitioned an item of non-standard size. Requisitioning of item with non-standard size resulted in issue
of ‘Non-availability certificate’ by the stores keeper although the same item of standard size was already
available in the stock. Citing urgency, the item was procured by the user department at 10 times the cost of
the standard item by inviting limited quotations.
2. In order to avoid such occurrences, it is reiterated that the items with standard specifications only
should be stipulated in the bid documents. In case, items with non-standard specifications are to be
procured, reasoning for procuring such items may be recorded and reasonability of rates must be checked
before placing order.
Sd/-
(Smt. Padmaja Varma
Improving Vigilance administration by leveraging technology: Increasing transparency through

effective use of website
Please refer to Commission’s Circular no. 40/11/06 dated 22/11/2006 on the aforementioned
subject & also Circular No. 13/3/05 dated 16/03/2005 & Circular No. 46/7/05 dated 28/7/2005 regarding
details of award of tenders/contracts publishing on Websites/ Bulletin.
2. The Commission vide circulars dated 16/3/05 & 28/7/05 had directed all organizations to post on
their web-sites a summary, every month, of all the contracts/purchases made above the threshold value
covering atleast 60% of the transactions every month. A compliance report in this regard was to be
submitted to the Commission by the CVOs through their monthly report to the Commission. However, it is
seen that some of the departments have neither intimated the Commission about the threshold value
CVC 36 | P a g e
decided for posting the details of tenders awarded on the web-sites, nor a compliance report is being sent
through the monthly reports.
3. Further, vide circular dated 22/11/06, the Commission while emphasizing the need to leverage
technology, as an effective tool in vigilance administration, in discharge of regulatory, enforcement and
other functions had directed the organizations to upload on their websites, information in respect of the
rules and procedures governing the issue of licenses/permissions etc. and to make available all the
application forms on the websites in a downloadable form besides, making available the status of
individual application on the organization’s website. The Commission had directed the organizations to
implement its guidelines in two phases. The first phase relating to the posting of all application forms on
the website was to be implemented by 1/1/2007 and the second phase, by 1/4/2007. Although, the date for
implementation of second phase has passed by, the departments are yet to intimate the Commission about
the status of implementation of the two phases.
4. The Commission, therefore, while reiterating its aforementioned instructions directs the CVOs to
convey to the Commission the following information latest by 30/4/07:-
a) The threshold value decided by the organization for publishing on their web-site, details
of award of tenders/contracts;
b) The extent to which the details of awarded tenders are being posted on the web-site and
whether the web-sites are being updated regularly or not;
c) Whether first/second phase of the Commission’s circular dated 22/11/06 has been
implemented or not;
d) If not, the reasons thereof: steps being taken by the organization to ensure implementation
of the Commission’s circular and the exact date by which both the phases as mentioned in
the Commission’s circular would be fully implemented;.
5. Any failure on the part of organization to implement the directions contained in the Commissions
circulars as mentioned above would be viewed seriously by the Commission.
Sd/-
(Vineet Mathur)
Deputy Secretary
Mobilisation Advance
Commission has reviewed the existing guidelines on ‘Mobilisation Advance’ issued vide OM
No.UU/POL/18 dated: 08.12.97 and OM No.4CC-1-CTE-2, dated 08.06.2004.
The following guidelines are issued in supercession of earlier guidelines issued by the
Commission on ‘Mobilisation Advance’
1. Provision of mobilization advance should essentially be need-based. Decision to provide such

advance should rest at the level of Board (with concurrence of Finance) in the organization.
2. Though the Commission does not encourage interest free mobilization advance, but, if the
Management feels its necessity in specific cases, then it should be clearly stipulated in the tender
document and its recovery should be time-based and not linked with progress of work. This would
ensure that even if the contractor is not executing the work or executing it as a slow pace, the
recovery of advance could commence and scope for misuse of such advance could be reduced.
CVC 37 | P a g e
3. Part ‘Bank Guarantees’ (BGs) against the mobilization advance should be taken in as many
numbers as the proposed recovery instalments and should be equivalent to the amount of each
instalment. This would ensure that at any point of time even if the contractor’s money on account
of work done is not available with the organization, recovery of such advance could be ensured by
encashing the BG for the work supposed to be completed within a particular period of time.
4. There should be a clear stipulation of interest to be charged on delayed recoveries either due to the
late submission of bill by the contractor or any other reason besides the reason giving rise to the
encashment of BG as stated above.
5. The amount of mobilization advance; interest to be charges, if any; its recovery schedule and any
other relevant details should be explicitly stipulated in the tendered document upfront.
6. Relevant format for BG should be provided in the tender document, which should be enforced
strictly and authenticity of such BGs should also be invariably verified from issuing bank,
confidentially and independently by the organization.
7. In case of ‘Machinery and Equipment advance’, insurance and hypothecation to the employer
should be ensured.
8. Utilization certificate from the contractor for the mobilization advance should be obtained.
Preferably, mobilization advance should be given in instalments and subsequent instalments
should be released after getting satisfactory utilization certificate from the contractor for the
earlier instalment.
2. In order to avoid such occurrences, it is reiterated that the items with standard specifications only
should be stipulated in the bid documents. In case, items with non-standard specifications are to be
procured, reasoning for procuring such items may be recorded and reasonability of rates must be checked
before placing order.
Sd/-
(P. VARMA)
Tendering process – negotiations with L-1
Reference is invited to the Commission’s circulars of even number, dated 25.10.2005 and
3.10.2006, on the above cited subject. In supersession of the instructions contained therein, the following
consolidated instructions are issued with immediate effect:-
(i) As post tender negotiations could often be a source of corruption, it is directed that there
should be no post-tender negotiations with L-1, except in certain exceptional situations.
Such exceptional situations would include, procurement of proprietary items, items with
limited sources of supply and items where there is suspicion of a cartel formation. The
justification and details of such negotiations should be duly recorded and documented
without any loss of time.
(ii) In cases where a decision is taken to go for re-tendering due to the unreasonableness of
the quoted rates, but the requirements are urgent and a re-tender for the entire requirement
would delay the availability of the item, thus jeopardizing the essential operations,
CVC 38 | P a g e
maintenance and safety, negotiations would be permitted with L-1 bidder(s) for the supply
of a bare minimum quantity. The balance quantity should, however, be procured
expeditiously through a re-tender, following the normal tendering process.
(iii) Negotiations should not be allowed to be misused as a tool for bargaining with L-1 with
dubious intentions or lead to delays in decision-making. Convincing reasons must be
recorded by the authority recommending negotiations. Competent authority should
exercise due diligence while accepting a tender or ordering negotiations or calling for a re-
tender and a definite timeframe should be indicated so that the time taken for according
requisite approvals for the entire process of award of tenders does not exceed one month
from the date of submission of recommendations. In cases where the proposal is to be
approved at higher levels, a maximum of 15 days should be assigned for clearance at each
level. In no case should the overall timeframe exceed the validity period of the tender and
it should be ensured that tenders are invariably finalised within their validity period.
(iv) As regards the splitting of quantities, some organisations have expressed apprehension
that pre-disclosing the distribution of quantities in the bid document may not be feasible,
as the capacity of the L-1 firm may not be known in advance. It may be stated that if, after
due processing, it is discovered that the quantity to be ordered is far more than what L-1
alone is capable of supplying and there was no prior decision to split the quantities, then
the quantity being finally ordered should be distributed among the other bidders in a
manner that is fair, transparent and equitable. It is essentially in cases where the
organisations decide in advance to have more than one source of supply (due to critical or
vital nature of the item) that the Commission insists on pre-disclosing the ratio of splitting
the supply in the tender itself. This must be followed scrupulously.
(v) Counter-offers to L-1, in order to arrive at an acceptable price, shall amount to

negotiations. However, any counter-offer thereafter to L-2, L-3, etc., (at the rates accepted
by L-1) in case of splitting of quantities, as pre-disclosed in the tender, shall not be
deemed to be a negotiation.
2. It is reiterated that in case L-1 backs-out, there should be a re-tender.
3. These instructions issue with the approval of the Commission and may please be noted for
immediate compliance.
Sd/-
(Vineet Mathur)
Deputy Secretary
Investigation of complaints by the CVOs – seizure of records reg
It has come to the Commission’s notice that when a complaint is received by the CVO either from
the Commission or from other sources, the time taken by the department for investigating the complaint is
unduly long and beyond the time-limit of three months stipulated by the Commission vide its circular
No.000/VGL/18 dated 23.5.2000. The main reason cited by the CVOs for the delay is non-availability of
records/documents pertaining to that particular complaint/allegation. The Commission vide Para 4.4 (a) of
Vigilance Manual, 6th Edition has already issued guidelines stating that “if the allegations contain
information which can be verified from any document or file or any other departmental records, the
investigating / vigilance officer should, without loss of time, secure such records, etc., for personal
inspection. If any of the papers examined is found to contain evidence supporting the allegations, such
CVC 39 | P a g e
papers should be taken over by him for retention in his personal custody to guard against the possibility of
available evidence being tampered with”.
2. The Commission observes that these guidelines are not being adhered to and would therefore
reiterate its aforementioned guidelines and direct the CVOs to ensure that all relevant
records/documents/files etc. are taken into personal custody by the investigating officer immediately on
receipt of the reference/complaint for processing the allegations, and finalizing the investigation within the
stipulated three months’ time-limit prescribed by the Commission.
3. The Commission, exercising its authority as contained in para 8(1)(c&d) and para 11 of CVC Act,
2003, also conducts direct inquiry into complaints through Direct Inquiry Officers as nominated by the
Commission. It is directed that as soon as a direct inquiry is ordered by the Commission, the CVOs should
immediately seize the relevant records pertaining to the case and produce them before the Direct Inquiry
Officers (DIOs) without any delay.
4. The above instructions may be noted for strict compliance.

Sd/-
(Vineet Mathur)
Deputy Secretary
Improving vigilance administration by leveraging technology:
Increasing transparency through effective use of websites in discharge of regulatory, enforcement
and other functions of Govt. Organisations
The Commission has been receiving a large number of complaints about inordinate delays and
arbitrariness in the processing and issue of licenses, permissions, recognitions, various types of clearances,
no objection certificates, etc., by various Govt. organisations. Majority of these complaints pertain to
delays and non-adherence to the ‘first-come-first-served’ principle. In a number of cases, there are
complaints of ambiguities regarding the documents and information sought for the grant of such licenses,
permissions, clearances, etc. There is also a tendency in some organisations to raise piece-
meal/questionable queries on applications, often leading to the allegations of corruption. In order to reduce
the scope for corruption, there is a need to bring about greater transparency and accountability in the
discharge of regulatory, enforcement and other public dealings of the Govt. organisations.
2. Improvement in vigilance administration can be possible only when systems improvements are
made to prevent the possibilities of corruption. In order to achieve the desired transparency and curb the
malpractices mentioned above, the Central Vigilance Commission, in exercise of the powers conferred on
it under Section 8(1)(h) of the CVC Act, 2003, issues the following instructions for compliance by all
Govt. departments/ organisations/ agencies over which the Commission has jurisdiction:-
i) All Govt. organisations discharging regulatory/enforcement functions or service delivery of

any kind, which cause interface with the general public/private businesses, etc., shall provide
complete information on their websites regarding the laws, rules and procedures governing the
issue of licenses, permissions, clearances, etc. An illustrative list is given in the annexure.
Each Ministry should prepare an exhaustive list of such applications/matters and submit a
copy of same to the Commission for record and web-monitoring.
ii) All application forms/proformas should be made available on the websites in adown loadable
form. If the organisation concerned wishes to charge for the application form downloaded
from the computer, the same may be done at the time of the submission of the application
forms.
CVC 40 | P a g e
iii) All documents to be enclosed or information to be provided by the applicant should be clearly
explained on the websites and should also form part of the application forms.
iv) As far as possible, arrangements should be put in place so that immediately after the receipt of
the application, the applicant is informed about the deficiencies, if any, in the
documents/information submitted.
v) Repeated queries in a piece-meal manner should be viewed as a misconduct having vigilance
angle.
vi) All organisations concerned should give adequate publicity about these facilities in the
newspapers and such advertisements must give the website addresses of the organisations
concerned.
3. In the second stage, the status of individual applications/matters should be made available
on the organisation’s website and should be updated from time-to-time so that the applicants remain
duly informed about the status of their applications.
4. In addition to the manual receipt of applications, all organizations should examine the feasibility
of online receipt of applications and, wherever feasible, a timeframe for introducing the facility should be
worked out. As a large number of Govt. organisations are opting for e-governance, they may consider
integrating the above mentioned measures into their business processes so that duplication is avoided.
5. Instructions at para-2 above shall take effect from 1st January, 2007, and instructions at para-3
shall become effective from 1st April, 2007. All Heads of Organisations/Deptts. are advised to get
personally involved in the implementation of these important preventive vigilance measures. They should
arrange close monitoring of the progress in order to ensure that the required information is placed on the
website in a user-friendly manner before the expiry of the abovementioned deadlines. They should later
ensure that the information is updated regularly.
6. This issues with the approval of the Commission.

Sd/-
(Balwinder Singh)
Addl. Secretary
Annexure
Illustrative list
1. Land & Building Related Issues
(i) Applications for mutation; conversion from leasehold to freehold of lands & buildings;
approval of building plans by municipal authorities and landowning/ regulating agencies like
MCD; DDA; NDMC; L&DO and similar agencies in other UTs.
(ii) Application for registration deeds by Sub-Registrars/Registrars and other applications
connected with land record management.
(iii) Application for allotment of land/flats, etc., by urban development agencies like Delhi
Development Authority.
2. Contracts & Procurement.

(i) Applications for registration of contractors/suppliers/ consultants/ vendors, etc.
(ii) Status of all bill payments to contractors/suppliers, etc.
3. Transport Sector
Issue of driving licenses, registration of vehicles, fitness certificates, release of impounded
vehicles etc. by RTAs.
4. Environment & Pollution Related Matters

CVC 41 | P a g e
Issue of environment and pollution clearances for setting up industries and other projects by Min.
of Environment & Forests; Pollution Control Organsiations, etc.
5. Food & Hotel Industry

Applications connected with clearances, licenses for food industry/hotels/ restaurants, etc.
6. Ministry of Labour/Minstry of Overseas Indian Affairs.

(i) Applications by beneficiaries and employers in connection with EPFO; ESI etc.
(ii) Applications by recruiting/placement agencies and individuals submitted to Protectorate
General of Emigrants and the concerned Ministry.
(iii) Other applications connected with regulatory/enforcement systems of Labour Ministry.
7. CBDT & Income Tax Deptt.

(i) Application for PAN.
(ii) Applications submitted by NGOs for exemption from Income Tax.
(iii) Applications submitted for issue of certificates/income tax clearance for immigration/
public contracts or any other purposes.
(iv) Application for appointment of legal counsels/any other professionals.
8. Customs & Central Excise & DGFT

Applications/cases of Duty Drawback & other export incentives.
9. Telecom (BSNL & MTNL)

Applications for establishing STD booths, etc.
10. Petroleum Sector

Applications for allotment of petrol pumps/gas stations.
11. Ministry of External Affairs

(i) Applications for issue of passports.
(ii) Applications for issue of visas by Indian Embassies abroad.
12. Ministry of Home Affairs

(i) Applications submitted to FRRO.
(ii) Applications connected with FCRA.
13. Ministry of Health

Applications for recognition by Medical Council of India and similar other regulatory bodies.
14. Education
(i) Applications for accreditation handled by bodies like AICTE & others.
(ii) Applications for recognition of schools by Director of Education etc.
(iii) Grant of E.C. by Director of Education.
15. Agriculture, Dairying & Fisheries

(i) Various clearances/licenses, eg. clearance for operating fishing vessels.
(ii) Quarantine related applications.
16. Ministry of Social Justice/Tribal Affairs.

Applications for sanction of funds to NGOs.
CVC 42 | P a g e

Tendering process – negotiation with L1
Reference is invited to Commission’s instructions of even number dated 25.10.2005 on the above
subject. A number of references have been received in the Commission, asking for clarification on issues
pertaining to specific situations.
2. The Commission’s guidelines were framed with a view to ensuring fair and transparent purchase
procedure in the organizations. The guidelines are quite clear and it is for the organizations to take
appropriate decision, keeping these guidelines in view. In case they want to take action in deviation or
modification of the guidelines, to suit their requirements, it is for them to do so by recording the reasons
and obtaining the approval of the competent authority for the same. However, in no case, should there be
any compromise to transparency, equity or fair treatment to all the participants in a tender.
3. The above instructions may be noted for strict compliance.

Sd/-
(V. Kannan)
Director
Posting of details of award of tenders/contracts on websites/bulletins.
The Commission, vide its orders of even number dated 16.3.2005, 28.7.2005 and 20.9.2005, had
directed all organisations to post every month a summary of all contracts/purchases made above a certain
threshold value on the websites of the concerned organisations, and it was specified that the proposed
threshold limits would be acceptable to the Commission as long as they covered more than 60% of the
value of the transactions every month in the first instance, to be revised subsequently after the system
stabilized. The threshold values as decided by the organisations, were also to be communicated to the
Commission separately for its perusal and record. CVOs were required to monitor the progress in this
regard and ensure that the requisite details were posted regularly on respective websites. They were also
required to incorporate the compliance reports in this regard in their monthly reports.
2. The Commission has taken serious note that the aforementioned instructions are not being adhered
to by the organisations. CVOs are, therefore, once again advised to ensure that details of the tenders
awarded above the threshold value by the organizations are uploaded in time on the organisation’s official
website and are updated every month. The position in this regard should be compulsorily reflected in the
CVOs monthly reports to the Commission. CVOs should also specifically bring to the notice of the
Commission, any violation of this order.
3. Please acknowledge receipt and ensure due compliance.

Sd/-
(V.Kannan)
Director
Transparency in Works/Purchase/Consultancy contracts awarded on nomination basis
The Commission had, in it’s OM No. 06-03-02-CTE-34 dated 20.10.2003 on back to back tie up
by PSUs, desired that the practice of award of works to PSUs on nomination basis by Govt. of India/PSUs
needed to be reviewed forthwith. It is observed that in a number of cases, Works/Purchase/Consultancy
CVC 43 | P a g e
contracts are awarded on nomination basis. There is a need to bring greater transparency and
accountability in award of such contracts. While open tendering is the most preferred mode of tendering,
even in the case of limited tendering, the Commission has been insisting upon transparency in the
preparation of panel.
2. In the circumstances, if sometimes award of contract on nomination basis by the PSUs become
inevitable, the Commission strongly feels that the following points should be strictly observed.
(i) All works awarded on nomination basis should be brought to the notice of the Board of the
respective PSUs for scrutiny and vetting post facto.
(ii) The reports relating to such awards will be submitted to the Board every quarter.
(iii) The audit committee may be required to check at least 10% of such cases.
3. This may be noted for strict compliance.

Sd/-
(V. Kannan)
Director
Examination of Public Procurement (Works/Purchases/Services)
Contracts by CVOs
The Commission has been emphasising the need for close scrutiny by the CVO, of the Public
Procurement (Works/ Purchases/Services) Contracts of his department/organisation concerned, to ensure
that the laid down systems and procedures are followed, there is total transparency in the award of
contracts, and there is no misuse of power in decision making.
2. A number of booklets have been issued by the Chief Technical Examiner Organisation of the
Commission, bringing out the common irregularities/ lapses noticed in different contracts. A Manual for
Intensive Examination of Works/ Purchase Contracts and guidelines on tendering have also been issued.
These are available in the Commission’s website.
3. The need for CTE type examinations by the CVOs has been emphasised in the Zonal meetings.
The CVOs are required to reflect their examinations in the monthly reports. The Commission reiterates the
importance of such examinations by the CVOs, as an effective preventive vigilance measure.
4. For this purpose, the CVOs are required to be well conversant with their organisation’s
works/purchase manual. Wherever works/purchase manuals are non-existant, they should be got prepared,
particularly, in those organisations which have substantial procurement activities. CVOs should also
ensure that the manuals are updated from time to time. They should check and ensure that the field staff is
well conversant with the extant provisions of the manuals, and the guidelines issued by the
Commission/CVOs from time to time. CVOs should have a full and active participation during the CTE
inspections to know about the problem areas in the organisation’s procurement process.
5. CVOs must also familiarise themselves with the earlier CTE examination reports and ensure that
the lapses previously noticed are not repeated. If lessons are not learnt from the past, there would be need
to take a serious view of the repetition of lapses and initiate disciplinary proceedings against the officials
found responsible for repetition of the lapses committed previously.
6. On the basis of the lapses noticed by the Chief Technical Examiner’s Organisation over the years,
a checklist has been prepared which could be used by the CVO while examining procurements contracts.
CVC 44 | P a g e
The checklist may be seen in Annexure –1. If certain procurement contracts require an intensive
examination by the CTEO, a reference may be made to them with adequate justification.
7. This may please be noted for strict compliance.
Sd/-
(V.Kannan)
Director
Annexure-1
Check list for examination of Procurement (Works/ Purchases/ Services) Contracts by CVOs
I. Pre-Award Stage
1. Financial and Technical sanction of competent authority is available.
2. Adequate and wide publicity is given. Advertisement is posted on website and tender
documents are available for downloading.
3. Convenient tender receiving/opening time and address of the tender receiving
officials/tender box are properly notified.
4. In the case of limited tender, panel is prepared in a transparent manner clearly publishing
the eligibility criteria. The panel is updated regularly.
5. Pre-qualification criteria are properly defined/ notified.
6. Short listed firms/consultants are fulfilling the eligibility criteria. There is no deviation
from notified criteria during evaluation.
7. Experience certificates submitted have been duly verified.
8. Tenders/bids are opened in the presence of bidders.
9. Corrections/omissions/additions etc., in price bid are properly numbered and attested and
accounted page –wise. Tender summary note/ Tender opening register is scrupulously
maintained.
10. Conditions having financial implications are not altered after opening of the price bids.
11. In case of consultancy contracts (a)Upper ceiling limit is fixed for consultancy fee and (b)
Separate rates for repetitive works are fixed.
B. Post-award stage
(a) General
1. Agreement is complete with all relevant papers such as pre-bid conference minutes, etc.
2. Agreement is page-numbered, signed and sealed properly.
3. Bank Guarantee is verified from issuing bank.
4. Insurance policies, labour licence, performance guarantee are taken as per contract.
5. Technical personnel are deployed as per contract.
6. Plant and equipment are deployed as per contract.
7. Action for levy of liquidated damages is taken in case of delay/default.
(b) Payments to contractors
1. Price escalation is paid only as per contract.
2. Retention Money/Security Deposit is deducted as per contract.
3. Recovery of Mobilisation & Equipment advance is made as per the provisions in the
contract.
4. Recovery of I.Tax & Works Contract tax is made as per provisions in the contract.
5. Glaring deviations are supported with adequate justification and are not advantageous to
the contractor.
(c) Site Records
1. Proper system of recording and compliance of the instructions issued to the contractors is
maintained.
CVC 45 | P a g e
2. Proper record of hindrances is maintained for the purpose of timely removal of the
hindrance and action for levy of liquidated damages.
3. Mandatory tests are carried out as per the frequency prescribed in the Agreement.

Vigilance angle – definition of (partial modification regarding)
In partial modification to Commission’s Office Order No. 23/4/04 issued vide No. 004/VGL/18
dated 13.4.04 on definition of vigilance angle, the following is added at the end of para 2 for the purpose
of determination of vigilance angle as para 2 (b)
“Any undue/unjustified delay in the disposal of a case, perceived after considering all relevant
factors, would reinforce a conclusion as to the presence of vigilance angle in a case”. The existing para 2
will be marked as para 2 (a).
2. CVO may bring this to the notice of all concerned.
Sd/-
(Anjana Dube)
Deputy Secretary
Undertaking by the Members of Tender Committee/Agency
In continuation of the Commission's directions vide Order 005/VGL/4 dated 16.03.2005 regarding
transparency in the tender process, the Commission would advise that the members of the Tender
Committee should give an undertaking at the appropriate time, that none of them has any personal interest
in the Companies/Agencies participating in the tender process. Any Member having interest in any
Company should refrain from participating in the Tender Committee.
2. CVOs should bring this to the notice of all concerned.
Sd/-
(Anjana Dube)
Deputy Secretary
CVC – Office Order No. 98/VGL/25 dated 10/11/2005
Intensive Examination of works by CTE’s Organization – submission of quarterly progress report
Please refer to Commission’s OM No. 98-VGL-25 dated 16.5.2005 wherein it was clarified that
the consultancy contracts, all service contracts equipment & supplies of medicines to hospitals etc. are to
be included in the QPRs being furnished to the CTE’s Organization.
2. It was also enjoined upon all the CVOs to certify on the QPRs that all the works/
purchase/consultancy and other contracts in progress as per the prescribed monetary limit have been
included in the QPR.
3. It has been observed that many of the QPRs do not contain the consultancy contracts, service
contracts and equipment & medicine purchase contracts and also the requisite certificates from the CVOs.
4. It is once again enjoined upon all the CVOs that the QPRs should contain all the ongoing contracts
above prescribed financial limit, separately, for the below mentioned categories:-
Civil - Rs.1.00 Cr. and above

Elect/Mech.Works Rs.30 Lacs & above
Store Purchase Rs.2 Cr. and above
CVC 46 | P a g e
Hort. Rs.2 lacs and above

Medical equipment Rs.1 Cr. & above
Consultancy 2 largest value contracts
Service contracts 2 largest value contracts.
Supplies of medicines 4 largest value contract.
Requisite certificate by CVO, should also be enclosed along with the QPR.
5. In case organization, which are undertaking such works in the areas mentioned above where the
monetary value of all such works is less than the limits prescribed above, they may report 2 largest works
in progress in each discipline. If the organization is not undertaking any work under any particular
discipline, a ‘NIL’ report should be furnished.
6. The above instructions are for strict compliance with immediate effect.
Sd/-
P. Varma
Tendering Process – Negotiation with L-1

A workshop was organised on 27th July 2005 at SCOPE New Delhi, by the Central Vigilance
Commission, to discuss issues relating to tendering process including negotiation with L-1. Following the
deliberations in the above mentioned Work Shop, the following issues are clarified with reference to para
2.4 of Circular No. 8(1) (h)/98(1) dated 18th November, 1998 on negotiation with L-1, which reflect the
broad consensus arrived at in the workshop.
(i) There should not be any negotiations. Negotiations if at all shall be an exception and only in
the case of proprietary items or in the case of items with limited source of supply.
Negotiations shall be held with L-1 only. Counter offers tantamount to negotiations and
should be treated at par with negotiation.
(ii) Negotiations can be recommended in exceptional circumstances only after due application of
mind and recording valid, logical reasons justifying negotiations. In case of inability to obtain
the desired results by way of reduction in rates and negotiations prove infructuous,
satisfactory explanations are required to be recorded by the Committee who recommended the
negotiations. The Committee shall be responsible for lack of application of mind in case its
negotiations have only unnecessarily delayed the award of work/contract.
2. Further, it has been observed by the Commission that at times the Competent Authority takes
unduly long time to exercise the power of accepting the tender or negotiate or re-tender. Accordingly, the
model time frame for according such approval to completion of the entire process of Award of tenders
should not exceed one month from the date of submission of recommendations. In case the file has to be
approved at the next higher level a maximum of 15 days may be added for clearance at each level. The
overall time frame should be within the validity period of the tender/contract.
3. In case of L-1 backing out there should be re-tendering as per extant instructions.
4. The above instructions may be circulated to all concerned for compliance.
Sd/-
(Anjana Dube)
Deputy Secretary
CVC 47 | P a g e
CVC – Office Order No. 57/9/05 dated 20/09/2005

Details on award of tenders / contracts publishing on
websites / Bulletins – Reminder regarding
It has been observed that despite Commission’s directions vide its circulars dated 16/3/05 and
28/7/05, a number of organisations are yet to give details of the tenders finalized on the website of their
organisations. Some of the Organisations have informed that this is due to the delay in receipt of
information from their Regional/Subordinate Offices.
2. In this regard it is clarified that placing of such information on the website will be a continuous
process. The CVOs should ensure publishing of the details of the tenders awarded immediately with
available information and subsequently update it. The threshold limits as proposed by the CVOs in
consultation with CEOs can be taken as the starting point which could be revised subsequently to cover
60% of the transactions in a year and further 100% on stabilization.
Sd/-
(Mitter Sain)
Deputy Secretary
Details on award of tenders / contracts publishing on websites / Bulletins – Reminder regarding
Reference is invited to Commission’s Office Order No.13/3/05 dated 16.3.2005 regarding above
mentioned subject directing the organisations to publish every month the summary of contracts / purchases
made above a threshold value on the website. In this regard it is specified that the proposed threshold
limit is acceptable to the Commission as long as it covers more than 60% of the value of the
transactions every month. This limit can be raised subsequently once the process stabilizes.
2. CVOs may, therefore, ensure that such details are posted on the website of the organisation
immediately and compliance report in this regard should be sent by CVOs in their monthly report to the
Commission.
Sd/-
(Anjana Dube)
Deputy secretary
CVC – OM No. 98/VGL/25 dated 16.05.2005

Intensive Examination of works by CTE’s Organization – Submission of Quarterly Progress Report
Please refer to the Commission’s OM No. 98/VGL/25 dated 20.10.98, 98/VGL/25 dated 20.07.01
and OFF-I-CTE-I(Pt) dated 23.12.03 regarding submission of quarterly progress reports(QPR’s) to the
CTE’s Organization in the prescribed format in respect of Civil Works costing more than ₹1.00 crores,
Electrical/Mechanical and other Allied works costing more than ₹30.00 Lacs, Stores/Purchase contracts
costing more than ₹2.00 crores and Horticulture works costing more than ₹2.00 Lacs .
2. It is clarified that the consultancy contracts, all service contracts such as hiring/leasing of cycle
stands etc., transportation contracts, catering, equipment & supplies of medicines to hospitals etc are also
to be reported in the respective QPR.
3. As per above-mentioned office memorandums, all the works above the prescribed limit have to be
reflected in the quarterly progress reports. In case of organizations, which are undertaking such works in
the areas mentioned above, where the monetary value of all such works is less than the limits prescribed
above, they may report two largest works in progress in each discipline. Instances have come to the notice
of the Commission, where all the works in progress, were not reflected in the quarterly progress report
CVC 48 | P a g e
submitted by the organization. It is enjoined upon all the Chief Vigilance Officers to certify on the QPR
that “All the works/purchases/Consultancy and other contracts in progress, as per the prescribed monetary
limit, have been reported in this QPR.”
4. The above instructions are for strict compliance.
Sd/-
(Smt. Padmaja Varma)
CVC – Circular No. 2EE-1-CTE-3 dated 12/04/2005
Issues pertaining to Negotiation with L1 (i.e. Lowest tenderer)
During the recent Zonal Conference, some of the organizations have expressed some difficulties in
implementation of the subject order and requested the Commission for a review.
2. The Commission in its efforts to look at some of its own guidelines & instructions and fine tune
them with the organization’s requirement to make the system cost effective and more competitive
proposes to hold a workshop in the 3rd week of May with select CVOs. The Commission would, therefore
welcome the reasoned views of your organization for and against the banning of post- tender negotiations
with other than L 1 (lowest tenderer). Your views on the subject matter of negotiations, circulated vide
letter No. 8(I)(h)/98(I), dated 18.11.98 with justification of your stand and suggestion for modification, if
any, may please be arranged to be sent to this organization addressed to the undersigned immediately,
latest by 30.4.2005.
3. The date, time and venue of the workshop shall be intimated shortly.
Sd/-
( V. Ramachandran )
Banning of business dealings with firms/contractors – clarification regarding
Para 31 of Chapter XIII, Vigilance Manual Part-I provides that business dealings with the
firms/contractors may be banned wherever necessary. It was also suggested that for banning of the
business with such firms/contractors or for withdrawal of banning orders, advice of the Central Vigilance
Commission need not be sought.
It is however observed by the Commission that some of the departments/organizations cite the
Commission as the authority behind the decision in their orders while banning of the firms/contractors.
This is not appropriate. The Commission once again reiterates its instructions that banning of
business is an administrative matter to be decided by the management of the organization and the
Central Vigilance Commission does not give its advice in such matters. This may pleas be noted for
strict compliance.
Sd/-
(Anjana Dube)
Deputy Secretary

Notice inviting tenders - regarding
The Commission has observed that some of the Notice Inviting Tenders (NITs) have a clause that
the tender applications could be rejected without assigning any reason. This clause is apparently
incorporated in tender enquiries to safeguard the interest of the organisation in exceptional circumstance
and to avoid any legal dispute, in such cases.
CVC 49 | P a g e
2. The Commission has discussed the issue and it is emphasized that the above clause in the bid
document does not mean that the tender accepting authority is free to take decision in an arbitrary manner.
He is bound to record clear, logical reasons for any such action of rejection/recall of tenders on the file.
3. This should be noted for compliance by all tender accepting authorities.
Sd/-
(Anjana Dube)
Deputy Secretary
Details on award of tenders / contracts publishing on websites / Bulletins
The Commission vide its Circular No.8(1)(h)/98(1) dated 18.11.1998 had directed that a practice
must be adopted with immediate effect by all organisations within the purview of the CVC that they will
publish on the notice board and in the organisation’s regular publication(s), the details of all such cases
regarding tenders or out of turn allotments or discretion exercised in favour of an employee/party.
However, it has been observed by the Commission that some of the organisations are either not following
the above mentioned practice or publishing the information with a lot of delay thereby defeating the
purpose of this exercise, viz. increasing transparency in administration and check on corruption induced
decisions in such matters.
2. The Commission has desired that as follow up of its directive on use of “website in public
tenders”, all organisations must post a summary every month of all the contracts/purchases made above a
certain threshold value to be decided by the CVO in consultation with the head of organisation i.e.
CEO/CMD etc. as per Annexure-I. The threshold value may be reported to the Commission for
concurrence.
3. Subsequently, the website should give the details on the following:

a) actual date of start of work
b) actual date of completion
c) reasons for delays if any
A compliance report in this regard should be sent by the CVOs alongwith their monthly report to CVC.
Sd/-
(Anjana Dube)
Deputy Secretary
Details of contractors concluded during the Month
1 2 3 4 5 6 7 8 9 10 11 12 13 14
Tend Item Mode Dat Type Last Nos. Nos. Nos. & Wheth Contr Nam Value Sche-
er / of e of of date of & names er act e of dule
No. Natu Tend publ Biddi of tende names of contra No. & of Contr date
re of er i- ng recei rs of parties ct Date Contr act of
work Enqui cati (Singl pt of recd. parties not award a- comp
ry on e/ tend qualifi qualifie ed to ctor -
of Two er ed d after lowest letion
NIT Bid after technic tender of
Syste techni al er / suppli
m) cal evaluat evalua es
evalua ion ted L1
-tion
CVC 50 | P a g e

Delays in Payments to Contractors & Suppliers etc. – Reducing opportunities for corruption
regarding
The Commission has observed that in a large number of Government organisations and PSUs,
payments to contractors/suppliers are inordinately delayed. This makes the system vulnerable to
corruption, in addition to increasing the cost of procurement by the Government agencies.
2. The Commission has therefore directed that all the CVOs should undertake a review of bills
received during the last six months. The review is meant to primarily determine the time taken in clearing
the bills. Necessary help from the concerned Finance/Administration departments may be taken wherever
required. Wherever the systems have not yet been computerised there may be practical difficulties in
conducting such a review for all the bills. The organisations may fix a cut off limit for review. It is
suggested that the cut off limit for bills can be ₹1 lakh i.e. time taken for payment of all bills above this
amount should be seen. In smaller organisations the cut off limit can be lower depending on feasibility and
convenience.
3. The CVO should also review whether payments are being made on “first-come-first-serve” basis
or not.
4. A compliance report in this regard may be sent to the Commission by 15.4.2005 as per the
following details:
Statement on delays in Bill Payments
1. Name of Organisation :
2. Cut off limit : ₹1 lakh/others(in respect of small orgns.)
3. Bills received during Sept.,04-Feb,05 :
(from contractors/suppliers etc.)
Total No. of Bills :
Total amount involved :
4. Out of these
(a) Bills paid in 15 days
No. of Bills :
Amount Involved :
(b) Bills paid in 15-30 days
No. of Bills :
Amount Involved :
(c) Bills paid in 30-60 days
No. of Bills :
Amount Involved :
(d) Bills paid from 60 days to 120 days

No. of Bills :
Amount Involved :
(e) Bills paid over 120 days
No. of Bills :
Amount Involved :
CVC 51 | P a g e
5. There are also complaints that most of the organizations take inordinately long time in releasing
5% bills amount, which is normally retained as performance guarantee after it becomes due. CVO may do
a similar exercise with regard to release of this payment.
6. Has any ERP system or any other computerized system been installed for accounting purposes
which can monitor bill payment?
6A. If not, is there any plan to do so in near future? If so, please indicate the time frame.
Sd/-
(Balwinder Singh)
Additional Secretary
Participation of consultants in tender - guidelines regarding
Consultants are appointed by the organisation for preparation of project report. These
appointments are made for any new projects, expansions, modernization/modification of the existing
projects etc. The selection is made with maximum attention to the suitability, competence and proven
track record.
2. Further, during the CVO’s Conference convened by the Commission in Sept.1997, the Central
Vigilance Commissioner had constituted a Committee of CVOs to go into the system of contracts
prevalent in PSUs and to suggest, wherever required, methods of streamlining the contracting provisions.
The Committee after going through the contract system of various organisations had made
recommendations on consultants as under:-
Consultants:-A firm which has been engaged by the PSU to provide goods or works for a project
and any of its affiliates will be disqualified from providing consulting services for the same
project. Conversely, a firm hired to provide consulting services for the preparation or
implementation of a project, and any of its affiliates, will be disqualified from subsequently
providing goods or works or services related to the initial assignment for the same project.
Consultants or any or their affiliates will not be hired for any assignment, which by its nature, may
be in conflict with another assignment of the consultants.
3. It has come to the notice of the Commission that in a tendering process of a PSU, the consultant
was also permitted to quote for work for which they had themselves estimated the rates and the consultant
quoted 20% above their own estimated rates as against the awarded rates which were 20% below the
estimated cost. Such over dependence on the consultant can lead to wasteful and infructuous expenditure
which the organisation regrets in the long run. Meticulous and intelligent examination of the consultants
proposal is therefore essential for successful and viable completion of the project.
4. The Commission reiterates the recommendations made by the Committee that the consultants/firm
hired to provide consulting services for the preparation or implementation of a project, and any of its
affiliates, will be disqualified from subsequently providing goods or works or services related to the initial
assignment for the same project.Sd/-
(Anjana Dube)
Deputy Secretary
CVC 52 | P a g e

Transparency in tendering system - Guidelines regarding
In order to maintain transparency and fairness, it would be appropriate that organisations should
evolve a practice of finalizing the acceptability of the bidding firms in respect of the qualifying criteria
before or during holding technical negotiations with him. Obtaining revised price bids from the firms,
which do not meet the qualification criteria, would be incorrect. Therefore the exercise of short listing of
the qualifying firms must be completed prior to seeking the revised price bids. Moreover, the intimation of
rejection to the firms whose bids have been evaluated but found not to meet the qualification criteria,
along with the return of the un-opened price bid, will enhance transparency and plug the loop-holes in the
tendering system. All organizations/departments are advised to frame a policy accordingly.
Sd/-
(Anjana Dube)
Deputy Secretary
Turnkey contracts for net-working of computer systems
The Commission has been receiving complaints that in turnkey contracts for net-working of
computer systems a lot of unrelated products are being included in the contracts which are either not
required or which are stand alone in nature and can be procured separately at much lower cost. Inclusion
of these unrelated items creates opportunities for malpractices. The Commission is of the view that
wherever possible it will be advisable to take an independent third party view about the scope of turnkey
projects so that the tendency to include unrelated products as part of the turnkey project is avoided.
Sd/-
(Balwinder Singh)
Leveraging Technology – e-payment & e-receipt
Reference is invited to the Commission’s Office Order No. 20/4/04 dated 6.4.2004 regarding the
above mentioned subject.
2. The Commission had directed that by July 2004, 50% of the payment transactions both in value
terms as well as in lieu of number of transactions shall be made through ECS/EFT mechanism instead of
payments through Cheques; and urged all Banks, PSUs and Departments to provide an enabling
environment and facilities so that such an initiative is successful. It has been informed that some of the
organisations are yet to initiate the process in this regard. The organisations are, therefore, requested to
forward the details regarding the implementation of e-payment mechanism, as per the enclosed format by
November 15, 2004 positively.
Sd/-
(Anjana Dube)
Deputy Secretary
FORMAT
Leveraging Technology – e-payments & e-receipts
(A) Details regarding payments of salary etc. to employees.

(1) Total No. of employees -
(2) No. of employees whose Bank A/c details including MICR have been received -
(3) % in terms of numbers of employees to whom salary & other dues are being paid through
e-payments -
CVC 53 | P a g e
(B) Details regarding payments of dues to contractors/suppliers etc.

(1) Number of contractors/suppliers/agents/assessees etc. dealt with regularly during the
period July 2004 – September 2004.
(2) Number of contractors/suppliers/agents/assessees etc. whose Bank A/c details including
MICR have been received.
(3) Total payments made to all contractors/suppliers/assessees/CHA’s during the period July
2004 – September 2004 (Amount in Rupees in lakhs).
[Payments should include refunds of earnest money/income tax etc.]
(4) Total payments made through e-payments during the above period
(Amount in Rupees in lakhs).
(5) % of Bills (in terms of number of payments) in which e-payment is made.
(6) % of value of payments made through e-payments.
(7) List of nodal officers who have been entrusted with the responsibility of managing charge
to e-payment system.
(C) E-receipts
Separate details as per (1)-(7) above may also be provided in respect of e-receipts by organisations
getting regular payments in terms of license fee/income tax receipts/custom duty/sales
tax/property tax/freight charges/consultancy fees etc. (The organisations can give the type of
payments received).

Improving Vigilance Administration: Increasing Transparency in procurement/sale etc. - Use of
website regarding.
The Central Vigilance Commission has issued a directive on the above subject vide its Order
No.98/ORD/1 dated 18th Dec. 2003 making it mandatory to use web-site in all cases where open tender
system is resorted to. These instructions have been further extended vide Office Order No.10/2/04 dated
11.2.2004 to tenders of short-term nature (by whatever name it is called in different organizations).
Various organizations have been corresponding with the Commission seeking certain clarifications with
regard to the above directives. The main issues pointed out by organizations are as follows:
Issue 1 Size of Tender Documents
In cases of works/procurement of highly technical nature, tender documents run into several
volumes with large number of drawings and specifications sheets, etc. It may not be possible to place
these documents on website.
Clarification: These issues have been discussed with the technical experts and in their opinion, there is
no technical and even practical difficulty in doing the same. These days almost all the organizations do
their typing work on computers and not on manual typewriters. There is no significant additional effort
involved in uploading the material typed on MS Word or any other word processing softwares on the
website irrespective of the number of pages. The scanning of drawings is also a routine activity. Moreover
if the volume and size of tender document is so large as to make it inconvenient for an intending tendering
party to download it, they always have the option of obtaining the tender documents from the organization
through traditional channels. The Commission has asked for putting tender documents on web-site in
addition to whatever methods are being presently used.
Issue 2 Issues Connected with Data Security, Legality and Authenticity of Bid Documents.
CVC 54 | P a g e
Certain organizations have expressed apprehensions regarding security of data, hacking of

websites etc. They have also pointed out that certain bidding parties may alter the downloaded documents
and submit their bids in such altered tender documents which may lead to legal complications.
Clarification: This issue has been examined both from technical and legal angles. Technically a high
level of data security can be provided in the websites. The provisions of digital signatures through
Certifying Authority can be used to ensure that in case of any forgery or alteration in downloaded
documents it is technically feasible to prove what the original document was. There are sufficient legal
provisions under IT Act to ensure that e-business can be conducted using the website.
A copy of the remarks given by NIC on this issue are enclosed herewith.
Issue 3 Some organizations have sought clarification whether web site is also to be used for
proprietary items or items which are sourced from OEMs (Original Equipment Manufacturers) and
OESs (Original Equipment Suppliers).
Clarification: It is clarified that Commission’s instructions are with regard to goods, services and works
procured through open tender system, so these instruction do not apply to proprietary items and items
which necessarily need to be procured through OEMs and OESs.
Issue 4 Do the instructions regarding ‘short term tenders’ given in the CVC Order No.98/ORD/1
dated 11th Feb., 2004 apply to limited tenders also?
Clarification: In many organizations goods, services and works which as per laid down norms are to be
procured/executed through open tender system many times due to urgency are done through short term
tenders without resorting to wide publicity in newspapers because of time constraint. In all such cases
short term tenders (by whatever name it is called) etc. should also be put on the website of the dept. as it
does not involve any additional time or cost.
Regarding applicability of these instructions to limited tenders where the number of

suppliers/contractors is known to be small and as per the laid down norms limited tender system is to be
resorted to through a system of approved/registered vendors/contractors, the clarification is given below.
Issue 5 Some organizations have pointed out that they make their procurement or execute their
work through a system of approved/registered vendors and contractors and have sought
clarification about the implications of CVC’s instructions in such procurements/contracts.
Clarification: The Commission desires that in all such cases there should be wide publicity through the
web site as well as through the other traditional channels at regular intervals for registration of
contractors/suppliers. All the required proforma for registration, the pre-qualification criteria etc. should
be always available on the web-site of the organization and it should be possible to download the same and
apply to the organization. There should not be any entry barriers or long gaps in the registration of
suppliers/contractors. The intervals on which publicity is to be given through website and traditional
means can be decided by each organization based on their own requirements and developments in the
market conditions. It is expected that it should be done atleast once in a year for upgrading the list of
registered vendors/contractors.
The concerned organisation should give web based publicity for limited tenders also except for
items of minor value. If the organization desires to limit the access of the limited tender documents to only
registered contractors/suppliers they can limit the access by issuing passwords to all registered
contractors/suppliers. But it should be ensured that password access is given to all the registered
contractors/suppliers and not denied to any of the registered suppliers. Any denial of password to a
CVC 55 | P a g e
registered supplier/contractor will lead to presumption of malafide intention on the part of the tendering
authority.
Sd/-
(Balwinder Singh)
Addl. Secretary
CVC – Office Memorandum No. 4CC-1-CTE-2 dated 08/06/2004
Mobilization Advance
In order to address the problem of misuse of mobilization advance provision in the civil and other
works, the Commission had issued an O.M. dt. 8.12.1997 for grant of interest bearing ‘Mobilization
Advance’ in selected works. In view of references from certain organizations on this issue, the
Commission has reviewed the issue and it has been decided to modify and add the following provisions in
the existing O.M. This may be read as addendum to the Commission’s O.M. dt. 8.12.1997.
(i) If the advance is to be given, it should be expressly stated in the NIT/Bid Documents, indicating
the amount, rate of interest and submission of BG of equivalent amount.
(ii) The advance payment may be released in stages depending upon the progress of the work and
mobilization of required equipments etc.
(iii) There should be a provision in the contract for adjustment of advance progressively even as the
bills are cleared for payment.
Sd/-
(Gyaneshwar Tyagi)
Technical Examiner
CVC – Office Memorandum No. 05-04-1-CTE-8 dated 08/06/2004

Receipt and Opening of Tenders
In the various booklets issued by the CTE Organisation of the Commission, the need to maintain
transparency in receipt and opening of the tenders has been emphasized and it has been suggested therein
that suitable arrangements for receipt of sealed tenders at the scheduled date and time through
conspicuously located tender boxes need to be ensured.
A case has come to the notice of the Commission, where due to the bulky size of tender
documents the bid conditions envisaged submission of tenders by hand to a designated officer. However, it
seems that one of the bidders while trying to locate the exact place of submission of tenders, got delayed
by few minutes and the tender was not accepted leading to a complaint.
In general, the receipt of tenders should be through tender boxes as suggested in our booklets.
However, in cases where the tenders are required to be submitted by hand, it may be ensured that the
names and designation of atleast two officers are mentioned in the bid documents. The information about
these officers should also be displayed at the entrance/reception of the premises where tenders are to be
deposited so as to ensure convenient approach for the bidders. The tenders after receipt should be opened
on the stipulated date and time in presence of the intending bidders.
Sd/-
(Gyaneshwar Tyagi)
Technical Examiner
CVC 56 | P a g e
CVC – OM No. 12-02-1-CTE-6 dated 07.05.2004

Prequalification criteria (PQ)
Guidelines were prescribed in this office OM of even number dated 17/12/2002, on the above-
cited subject to ensure that the pre-qualification criteria specified in the tender document should neither be
made very stringent nor very lax to restrict/facilitate the entry of bidders. It is clarified that the guidelines
issued are illustrative and the organizations may suitably modify these guidelines for specialized
jobs/works, if considered necessary. However, it should be ensured that the PQ criteria are exhaustive, yet
specific and there is fair competition. It should also be ensured that the PQ criteria is clearly stipulated in
unambiguous terms in the bid documents.
(M.P. Juneja)

The Commission has received a complaint alleging that in Government tenders an agent
participates by representing a company officially and another bid is submitted as a ‘direct offer’ from the
manufacturer. At times, the agent represents a foreign company in one particular tender and in another
tender the said foreign company participates directly and the agent represents another foreign company.
There is a possibility of cartelization in such cases and thus award of contract at higher prices.
2. The issue has been deliberated in the Commission. In order to maintain the sanctity of tendering
system, it is advised that the purchases should preferably be made directly from the manufacturers. Either
the Indian Agent on behalf of the foreign principal or the foreign principal directly could bid in a tender
but not both. Further, in cases where an agent participates in a tender on behalf of one manufacturer, he
should not be allowed to quote on behalf of another manufacturer along with the first manufacturer in a
subsequent / parallel tender for the same item.
3. It is suggested that these guidelines may be circulated amongst the concerned officials of your
organization for guidance.
Sd/-
A.K. Jain
Technical Examiner
For Chief Technical EXaminer

Vigilance angle – definition of
[Read with modification vide office Order No.74/12/05]
As you are aware, the Commission tenders advice in the cases, which involve a vigilance angle.
The term “vigilance angle” has been defined in the Special Chapters for Vigilance Management in the
public sector enterprises, public sector banks and public sector insurance companies. The matter with
regard to bringing out greater quality and precision to the definition has been under reconsideration of the
Commission. The Commission, now accordingly, has formulated a revised definition of vigilance angle as
under:
“Vigilance angle is obvious in the following acts: -

(i) Demanding and/or accepting gratification other than legal remuneration in respect of an
official act or for using his influence with any other official.
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(ii) Obtaining valuable thing, without consideration or with inadequate consideration from a
person with whom he has or likely to have official dealings or his subordinates have
official dealings or where he can exert influence.
(iii) Obtaining for himself or for any other person any valuable thing or pecuniary advantage
by corrupt or illegal means or by abusing his position as a public servant.
(iv) Possession of assets disproportionate to his known sources of income.
(v) Cases of misappropriation, forgery or cheating or other similar criminal offences.
2. There are, however, other irregularities where circumstances will have to be weighed carefully to
take a view whether the officer’s integrity is in doubt. Gross or willful negligence; recklessness in decision
making; blatant violations of systems and procedures; exercise of discretion in excess, where no
ostensible/public interest is evident; failure to keep the controlling authority/superiors informed in time –
these are some of the irregularities where the disciplinary authority with the help of the CVO should
carefully study the case and weigh the circumstances to come to a conclusion whether there is
reasonable ground to doubt the integrity of the officer concerned.
3. The raison d'être of vigilance activity is not to reduce but to enhance the level of managerial
efficiency and effectiveness in the organisation. Commercial risk taking forms part of business. Therefore,
every loss caused to the organisation, either in pecuniary or non-pecuniary terms, need not necessarily
become the subject matter of a vigilance inquiry. Thus, whether a person of common prudence, working
within the ambit of the prescribed rules, regulations and instructions, would have taken the decision in the
prevailing circumstances in the commercial/operational interests of the organisation is one possible
criterion for determining the bona fides of the case. A positive response to this question may indicate the
existence of bona- fides. A negative reply, on the other hand, might indicate their absence.
4. Absence of vigilance angle in various acts of omission and commission does not mean that the
concerned official is not liable to face the consequences of his actions. All such lapses not attracting
vigilance angle would, indeed, have to be dealt with appropriately as per the disciplinary procedure
under the service rules.”
5. The above definition becomes a part of the Vigilance Manual and existing Special Chapter on
Public Sector Banks and Public Sector Enterprises brought out by the Commission, in supersession of the
existing definition.
CVOs may bring this to the notice of all concerned.
Sd/-
(Anjana Dube)
Deputy Secretary
Improving Vigilance Administration: Increasing Transparency and cutting delays by e-payments
and e-receipt by Govt. Organisations etc.
The Commission has been receiving complaints about inordinate delays in making payments to
the vendors and other suppliers to the Govt. organisations, Public Sector Undertakings etc. Similarly
complaints are received about delays in getting refunds from taxation dept. and other departments. Apart
from increasing the cost of procurement, the delays lead to opportunities for corruption. A number of
measures are required to cut down on delays in making payments. One such step is resorting to mechanism
of e-payments and e-receipts wherever such banking facilities exist.
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In the last few years tremendous progress has been made by the banking sector in computerization
including net-working of branches, making it possible to do e-banking by making use of facilities like
electronic clearing system (ECS) and electronic fund transfer (EFT) etc. These facilities are available in
most of the banks including the State Bank of India as well as in private banks. A large number of
corporates including public sector undertakings are already making e-payments to vendors and employees
instead of making payments by issue of cheques.
The Commission has been receiving complaints that delay is intentionally caused with ulterior
motives in the issue and dispatch of cheques in the accounts and finance wings of a large number of Govt.
Organisations. As the e-payment facility is already available in the metros as well as practically in all the
main urban centres of the country, in order to curb the above mentioned malpractices, the CVC in the
exercise of powers conferred on it under Section 8(1) (h) issues following instructions for compliance by
all govt. departments, PSUs, banks and other agencies over which the Commission has jurisdiction.
1. The payment to all suppliers/vendors, refunds of various nature, and other payments which the
organisations routinely make shall be made through electronic payment mechanism at all centres where
such facilities are available in the banks.
2. Salary and other payments to the employees of the concerned organisations at such centres shall
also be made through electronic clearing system (ECS) wherever such facilities exist.
As the organisations will have to collect bank account numbers from the vendor, suppliers,
employees and others who have interface of this nature with the Govt. organisations, the concerned
organisations may plan to switch over to e-payment system in a phased manner starting with transactions
with the major suppliers in the beginning or in whatever manner is found more convenient.
It is expected that in three months i.e. by 1st July, 2004, 50% of the payment transactions both in
value terms as well as in terms of number of transactions shall be made through ECS/EFT mechanism
instead of payment through cheques. The remaining 50% payment transactions at all centres where such
facilities exist shall be made by 31st Dec., 2004.
These instructions are applicable to all the metro cities and other urban centres where the banks
provide ECS/EFT and similar other facilities.
The departments, PSUs, Banks etc. should also provide an enabling environment and facilities so
that businessmen and other citizens can make payment of Govt. dues and payments to PSUs etc.
electronically.
In addition to significantly reducing processing costs in preparation and dispatch of cheques, the
above measures also reduce the risk of frauds by providing speed, efficiency and easier reconciliation of
accounts.
Sd/-
(Anjana Dube)
Deputy Secretary
Improving Vigilance Administration - Increasing transparency in procurement/tender process - use

of website - regarding
In CPWD, MCD, Civil Construction Division of Post & Telecom departments and in many other
departments/organizations, there is system of short term tenders (by whatever name it is called in different
organizations), wherein works below a particular value are undertaken without resorting to publicity as is
required in the open tenders. This practice is understandable because of cost and time involved in
organizing publicity through newspapers. In all such cases, notice can be put on the web-site of the
department as it does not take any time compared to giving advertisements in the newspapers and it
practically does not cost anything. This will benefit the department by bringing in transparency and
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reducing opportunities for abuse of power. This will also help the organizations by bringing in more
competition.
2. In view of the reasons given above, the Commission has decided that instructions given in the
Commission’s circular (No. 98/ORD/1 dated 18.12.2003) for the use of web-site will also apply to all such
works awarded by the department/PSEs/other organizations over which the Commission has jurisdiction.
Sd/-
(Balwinder Singh)
Improving Vigilance Administration - Increasing transparency in procurement/sale - use of web-site
regarding
The Commission has issued a directive vide No. 98/ORD/1 dated 18th December 2003 wherein
detailed instructions are issued regarding the use of website for tendering process. The objective is to
improve vigilance administration by increasing transparency. The instructions were to take effect from 1st
January 2004. It is noticed that many organisations whose web-sites are functional are still not putting
their tenders on the web-site. The Commission has desired that CVOs should ensure compliance of the
above directive. They should regularly pursue the Newspaper advertisements, the web-site of their
organisation and in general keep track to ensure that the directives of the Commission on this subject are
complied with. Further, the Commission has desired that the CVOs should indicate in their monthly report
in the column pertaining to tender notices whether all the tenders have been put on the web-site, and if not,
the reasons for non-compliance. The explanation of the concerned officers who are not complying with
these directions should be called and further necessary action taken.
Sd/-
(Balwinder Singh)
CVC – OM No. 8/2/04 (File No. OFF-1-CTE-1) dated 05.02.2004
Common Irregularities in the award of contracts
The CTE Organisation of the Central Vigilance Commission conducts independent intensive
examinations of various types of works and contracts executed by the organisations under its purview. The
lapses and deficiencies observed during the course of such examinations are brought to the notice of the
CVOs, for suitable corrective action. With a view to prevent recurrence of such lapses and irregularities
and for improving the systems and procedures in the organisations, a few booklets have also been issued
by the CTEO. However, it is observed that certain common deficiencies and irregularities continue to
plague the systems in a large number of organisations. Some of these noticed during recent inspections are
enumerated as under:
 Appointment of consultants continue to be done in an arbitrary manner. At times two or even

three consultants are appointed for a work with no clear cut and some times over lapping
responsibilities. A PSU, in a recent case, in addition to the engineering and project
management consultants appointed an inspection and expediting consultant with no well
defined role for them.
 The tendency of over dependence on the consultants continues. All activities are left
completely to the consultants. In a recent inspection of an Oil PSU, the tenders for a big work
of about Rs.20 crores were issued on the basis of a single page estimate submitted by the
consultants and the same was revised by the latter upwards by 20% after opening of price
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bids, in order justifying the quoted rates. A detailed and realistic estimate must be prepared
before issue of tender.
 Some organizations prefer limited tendering system, restricting competition to their approved
contractors. The selection of these contractors at times is arbitrary and due of lack of
competition or cartel formation amongst such group of contractors, the contractors are
awarded at high rates. This needs to be discouraged and the organisations must ensure that
contracts are awarded on the basis of competitive bidding at reasonable rates.
 The works are awarded without preparing any market rate justification. The comparison at
times is made with works which were awarded few years back. This procedure cannot be
considered objective and appropriate for justifying the awarded rates. The justification should
be based on realistic prevailing rates.
 In a recent inspection of an oil PSU, it was noticed that revised price bids were asked from all
the bidders, as rates were high vis-a-vis the estimate. This tantamounts to negotiations with
firms other than L-1 and is a clear violation of CVC instructions in this regard. The
negotiations should be an exception rather than a rule and should be conducted if required,
only with the L-1 bidder.
 The organizations generally make provisions for a very small amount of say Rs.50000/- or
Rs.1 lac as earnest money. This amount is grossly insufficient to safeguard the organisation's
interest in high rate tenders running into several crores of rupees. This needs to be revised to
a sufficient amount.
 The post award amendments issued by the organizations, at times recommended by

consultants, without into account the financial implications favour the contractors. Such post
award deviations without financial adjustments are unwarranted and against the principles of
competitive tendering.
 The tender documents, and the agreement are maintained in loose condition, are not page
numbered and not signed by both the parties. This is highly objectionable. In order to ensure
that the agreements are enforceable in court of law, it is imperative that he agreements are
well bound, page numbered, signed by both the parties and well secured. This shall also
prevent any possibility of interpolation and tampering of documents.
 Loose & incomplete implementation of contract clauses pertaining to insurance, Workmen's

Compensation Act, ESIC, Labour Licenses etc., has been noticed, which give undue financial
benefit to the contractors.
 Time is the essence of any contract. It has been observed that at times the work is extended
and even payments released without a valid extension to the agreement. This has legal
implications and in case of disputes, may jeopardize the interests of the organization. Timely
extensions of the contracts and BGs if any must be ensured.
In order to make contract management more transparent and professional, CVO's are requested to
circulate this memorandum to the concerned officials in their organizations. This OM is also available in
the Commission's website www.cvc.nic.in.
Sd/-
(M.P. Juneja)
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CVC – Office Order No. 98/ORD/1 dated 18/12/2003
Improving Vigilance Administration: Increasing Transparency in

Procurement / Sale etc.
The Commission is of the opinion that in order to bring about greater transparency in the
procurement and tendering processes there is need for widest possible publicity. There are many instances
in which allegations have been made regarding inadequate or no publicity and procurement officials not
making available bid documents, application forms etc. in order to restrict competition.
2. Improving vigilance administration is possible only when system improvements are made to
prevent the possibilities of corruption. In order to bring about greater transparency and curb the mal-
practices mentioned above the Central Vigilance Commission in the exercise of the powers conferred on it
under Section 8(1)(h) issues following instructions for compliance by all govt. departments, PSUs, Banks
and other agencies over which the Commission has jurisdiction. These instructions are with regard to all
cases where open tender system is resorted to for procurement of goods and services or for auction/sale
etc. of goods and services.
(i) In addition to the existing rules and practices regarding giving publicity of tenders through
newspapers, trade journals and providing tender documents manually and through post
etc. the complete bid documents alongwith application form shall be published on the web
site of the organization. It shall be ensured by the concerned organization that the parties
making use of this facility of web site are not asked to again obtain some other related
documents from the department manually for purpose of participating in the tender
process i.e. all documents upto date should remain available and shall be equally legally
valid for participation in the tender process as manual documents obtained from the
department through manual process.
(ii) The complete application form should be available on the web site for purposes of
downloading and application made on such a form shall be considered valid for
participating in the tender process.
(iii) The concerned organization must give its web site address in the advertisement/NIT
published in the newspapers.
(iv) If the concerned organization wishes to charge for the application form downloaded from
the computer then they may ask the bidding party to pay the amount by draft/cheques etc.
at the time of submission of the application form and bid documents.
3. While the above directions must be fully complied with, efforts should be made by organizations
to eventually switch over to the process of e-procurement/e-sale wherever it is found to be feasible and
practical.
4. The above directions are issued in supersession of all previous instructions issued by the CVC on
the subject of use of web-site for tendering purposes. These instructions shall take effect from 1st January,
2004 for all such organizations whose web-sites are already functional. All other organizations must
ensure that this facility is provided before 1st April, 2004.
Sd/-
(P. Shankar)
Central Vigilance Commissioner
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CVC – Office Memorandum No. 06-03-02-CTE-34 dated 20/10/2003

Back to back tie up by PSUs - instructions regarding
It has been observed during intensive examination of various works/contracts awarded by

construction PSUs on back to back basis that the works are being awarded in an ad-hoc and arbitrary
manner without inviting tenders and ascertaining the performance, capability and experience of the
tenderers. In some cases, the works were awarded on single tender basis/limited tender basis though
sufficient time was available with the Organisation to invite open tenders.
2. Some of the common irregularities/lapses observed during the examination of works were as
under:
a) No transparency in selection of contractor for the back to back tie up which is the main
source of corruption.
b) Collusion among the contractors was observed where more than one contractors were
involved at various stages.
c) Ineligible contractor obtains the contract through the PSUs.
d) Purchase preference misused by the PSUs.
e) PSUs sublet the complete work to a private contractor without obtaining permission from
the client which invariably put a condition insisting such permission since the client is
generally not interested in such back to back sublet of the work.
f) Infructuous work (to the exchequer) due to the involvement of intermediary PSUs and
cost of project goes up ultimately.
g) No supervision by the PSU as they put the staff mainly for coordination work.
h) Quality ultimately suffers due to lack of supervision by the PSUs.
3. Commission is of the view that the practice of award of works to PSUs on nomination basis by
Govt. of India/PSUs needs to be reviewed forthwith.
4. The irregularities observed during intensive examination of work and difficulties being faced by
the PSUs in inviting tenders were considered and it has been decided that the procedure to be
followed for award of work by Construction PSUs shall be finalised taking into account the
following points:
a) PSUs (when bag the contract from the client Department) as a contractor, has to execute
the work by functioning like a contractor instead of sub-letting the 100% work on back to
back basis.
b) Open tenders to be invited for selection of sub-contractors as far as possible
c) In case, it is not possible to invite open tenders, selection should be carried out by inviting
limited tenders from the panel approved in the following manner. Panel of contractors are
to be prepared for different categories. monetary limits, regions, in a transparent manner
clearly publishing the eligibility criteria etc. The above panel is to be updated every year.
d) Tenders to be opened confidentially by a high level committee to maintain the secrecy of
rates, if required. Tender opening register should be maintained in this regard duly signed
by the officers opening the tender and kept confidentialy. This should be available for
perusal when required by audit/vigilance.
e) The terms and conditions of the contract of the client especially those pertaining to
subletting of works should be strictly adhered to by the PSUs.
f) Adequate staff to be deployed by the PSUs to ensure quality in construction etc.
g) The record of enlistment/updation of contractor and tender opening register shall be
produced to the CTEO as well as audit officials when demanded for scrutiny.
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5. It is, therefore, suggested that the procedure for award of work on back to back basis be finalised
keeping in view the above points and circulated amongst the concerned officials of your organisation for
strict compliance in future works.
Sd/-
(R.A. Arumugam)
CVC – Office Memorandum No. 2EE-1-CTE-3 dated 15/10/2003
Tender Sample Clause
The Commission has received complaints that some organizations, while procuring clothing and
other textile items insist on submission of a tender sample by the bidders though detailed specifications for
such items exist. The offers are rejected on the basis of tender samples not conforming to the requirements
of feel, finish and workmanship as per the ‘master sample’ though the bidders confirm in their bids that
supply shall be made as per the tender specifications, stipulated in the bid documents.
2. While it is recognized that samples may be required to be approved to provide a basis in respect of
indeterminable parameters such as shade, feel, finish & workmanship for supplies of such items but
system of approving/rejecting tender samples at the time of decision making is too subjective and is not
considered suitable, especially for items which have detailed specifications. The lack of competition in
such cases is also likely to result in award of contracts at high rates.
3. It is thus advised that Government Departments/Organizations should consider procurement of

such items on the basis of detailed specifications. If required, provision for submission of an advance
sample by successful bidder(s) may be stipulated for indeterminable parameters such as, shade/tone, size,
make-up, feel, finish and workmanship, before giving clearance for bulk production of the supply. Such a
system would not only avoid subjectivity at the tender decision stage but would also ensure healthy
competition among bidders and thus take care of quality aspect as well as reasonableness of prices.
4. It is requested that these guidelines may be circulated amongst the concerned officials of your
organization for guidance. These are also available on the CVC’s website, http://cvc.nic.in.
Sd/-
(A.K. Jain)
Technical Examinerfor Chief Technical Examiner

E-procurement/Reverse Auction
The Commission has been receiving a number of references from different departments /
organisations asking for a uniform policy in this matter. The departments / organisations may themselves
decide on e-procurement/reverse auction for purchases or sales and work out the detailed procedure in this
regard. It has, however, to be ensured that the entire process is conducted in a transparent and fair manner.
Sd/-
(Mange Lal)
Deputy Secretary
Irregularities in award of contracts
While dealing with the case of a PSU, the Commission has observed that the qualification criteria
incorporated in the bid documents was vague and no evaluation criterion was incorporated therein. It is
also seen that the category-wise anticipated TEUs were not specified in the bid documents and the same
was left for assumptions by Tender Evaluation Committee for comparative evaluation of financial bids,
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which led to comparative evaluation of bids on surmises and conjectures. Further, it was also provided as a
condition in the tender bid that the tenderer should have previous experience in undertaking handling of
similar work and/or transportation works preferably of ISO containers, however, no definition of 'similar
works' was, indicated in the bid documents.
2. It should be ensured that pre-qualification criteria, performance criteria and evaluation

criteria are incorporated in the bid documents in clear and unambiguous terms as these criterion
very important to evaluate bids in a transparent manner. Whenever required the
departments/organisations should have follow two-bid system, i.e. technical bid and price bid. The
price bids should be opened only of those vendors who were technically qualified by the Deptt./
Organisation. The Commission would therefore advise that the Deptt./ Organisation may issue necessary
guidelines in this regard for future tenders.
3. It has also observed that the orders were allegedly split in order to bring it within the powers of
junior officers and that the proper records of machine breakdown were not being kept. It is therefore,
decided that in the matters of petty purchase in emergency items all departments/organisations must keep
proper records of all machine breakdown etc.
4. All CVOs may bring this to the notice of all concerned.

Sd/-
(Anjana Dube)
Deputy Secretary
Short-comings in bid documents
The Commission has observed that in the award of contracts for goods and services, the detailed
evaluation/exclusion criteria are not being stipulated in the bid document and at times is decided after the
tender opening. This system is prone to criticism and complaints as it not only leads to a non-transparent
and subjective system of evaluation of tenders but also vitiates the sanctity of the tender system.
2. The Commission would reiterate that whatever pre-qualification, evaluation/exclusion criteria, etc.
which the organization wants to adopt should be made explicit at the time of inviting tenders so that basic
concept of transparency and interests of equity and fairness are satisfied. The acceptance/rejection of any
bid should not be arbitrary but on justified grounds as per the laid down specifications,
evaluation/exclusion criteria leaving no room for complaints as after all, the bidders spend a lot of time
and energy besides financial cost initially in preparing the bids and, thereafter, in following up with the
organizations for submitting various clarifications and presentations.
3. This is issued for strict compliance by all concerned.

Sd/-
(Mange Lal)
Deputy Secretary
Telefax No.24651010
CVC – Letter No. 98/ORD/1 dated 05.05.2003
Purchase of computer systems by Govt. departments/organisation
It has come to the notice of the Commission that some departments/ organisations are issuing
tenders for purchase of computers where they mention and insist on the international brands. This not only
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encourages the monopolistic practices but also vitiates the guidelines issued by the Ministry of Finance,
D/o Expenditure vide its OM No. 8(4)-E.II(A) 98 dated 17.12.1998 (copy enclosed).
2. It is, therefore, advised that departments/organisations may follow the instructions issued by the
Department of Expenditure.
Sd/-
(Anjana Dube)
Deputy Secretary
CVC – Letter No. 98/ORD/1 (Pt. IV) dated 12.03.2003
Use of web-site in Government procurement or tender process
Attention is invited to the instructions issued by the Commission vide communication No.
98/ORD/1 dated 28.03.2002 regarding publishing of tender documents on the web-site.
2. The Commission has received a number of references from various departments / organisations
expressing reservations in implementation the said instructions in toto The matter has been reviewed in the
Commission and it is observed that it is a fact that use of web-site for accessing the information has so far
not picked up in the country and it would not be possible for the vendors to access the web-site of every
organisation to know the tender details. There is also no centralised web-site for the tenders
3. Therefore, it has been decided by the Commission that till such time the penetration of
Information Technology is adequate and a dedicated web-site for Government tenderers is available,
Departments/Organisations may continue with publishing of NIT in newspapers in concise format and put
the detailed information in their respective web-sites.
Sd/-
(Mange Lal)
Deputy Secretary
CVC – OM No. 12-02-06/CTE/SPI(I)-2 dated 07.01.2003
The Commission has received a complaint alleging that in Government tenders at times an Indian
Agent participates on behalf of two different foreign suppliers and in the event of only offers of these two
suppliers getting short-listed, then the Indian representative knowing the prices of the two foreign
suppliers/manufacturers may take an undue advantage.
2. The issue has been deliberated in the Commission. In order to maintain sanctity of the tender
system, it is advised that one Agent cannot represent two suppliers or quote on their behalf in a particular
tender.
3. It is suggested that these instructions may be circulated amongst the concerned officials of your
organisation for guidance.
Sd/-
Niranjan Singh
Under Secretary
CVC – OM No. 12-02-1-CTE-6 dated 17.12.2002
Prequalification criteria (PQ)
The Commission has received complaints regarding discriminatory prequalification criteria

incorporated in the tender documents by various Deptts./Organisations. It has also been observed during
intensive examination of various works/contracts by CTEO that the prequalification criteria is either not
clearly specified or made very stringent/very lax to restrict/facilitate the entry of bidders.
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2. The prequalification criteria is a yardstick to allow or disallow the firms to participate in the bids.
A vaguely defined PQ criteria results in stalling the process of finalizing the contract or award of the
contract in a non-transparent manner. It has been noticed that organizations, at times pick up the PQ
criteria from some similar work executed in the past, without appropriately amending the different
parameters according to the requirements of the present work. Very often it is seen that only contractors
known to the officials of the organization and to the Architects are placed on the select list. This system
gives considerable scope for malpractices, favouritism and corruption. It is, therefore, necessary to fix in
advance the minimum qualification, experience and number of similar works of a minimum magnitude
satisfactorily executed in terms of quality and period of execution.
3. Some of the common irregularities/lapses observed in this regard are highlighted as under: -
(i) For a work with an estimated cost of Rs.15 crores to be completed in two years, the criteria
for average turnover in the last 5 years was kept as Rs.15 crores although the amount of
work to be executed in one year was only Rs.7.5 crores. The above resulted in
prequalification of a single firm.
(ii) One organization for purchase of Computer hardware kept the criteria for financial annual
turnover of Rs.100 crores although the value of purchase was less than Rs.10 crores,
resulting in disqualification of reputed computer firms.
(iii) In one case of purchase of Computer hardware, the prequalification criteria stipulated was
that the firms should have made profit in the last two years and should possess ISO
Certification. It resulted in disqualification of reputed vendors including a PSU.
(iv) In a work for supply and installation of A.C. Plant, retendering was resorted to with diluted
prequalification criteria without adequate justification, to favour selection of a particular
firm.
(v) An organization invited tenders for hiring of D.G. Sets with eligibility of having 3 years
experience in supplying D.G. Sets. The cut off dates regarding work experience were not
clearly indicated. The above resulted in qualification of firms which had conducted such
business for 3 years, some 20 years back. On account of this vague condition, some firms
that were currently not even in the business were also qualified.
(vi) In many cases, “Similar works” is not clearly defined in the tender documents. In one such
case, the supply and installation of A.C. ducting and the work of installation of false ceiling
were combined together. Such works are normally not executed together as A.C. ducting
work is normally executed as a part of A.C. work while false ceiling work is a part of civil
construction or interior design works. Therefore, no firm can possibly qualify for such work
with experience of similar work. The above resulted in qualification of A.C. Contractors
without having any experience of false ceiling work although the major portion of the work
constituted false ceiling work.
4. The above list is illustrative and not exhaustive. While framing the prequalification criteria, the
end purpose of doing so should be kept in view. The purpose of any selection procedure is to attract the
participation of reputed and capable firms with proper track records. The PQ conditions should be
exhaustive, yet specific. The factors that may be kept in view while framing the PQ Criteria includes the
scope and nature of work, experience of firms in the same field and financial soundness of firms.
5. The following points must be kept in view while fixing the eligibility criteria:-
CVC 67 | P a g e
A) For Civil/Electrical Works

(i) Average Annual financial turnover during the last 3 years, ending 31st March of the
previous financial year, should be at least 30% of the estimated cost.
(ii) Experience of having successfully completed similar works during last 7 years
ending last day of month previous to the one in which applications are invited should
be either of the following: -
a. Three similar completed works costing not less than the amount equal to 40% of
the estimated cost.
or
b. Two similar completed works costing not less than the amount equal to 50% of
the estimated cost.
or
c. One similar completed work costing not less than the amount equal to 80% of the
estimated cost.
(iii) Definition of “similar work” should be clearly defined. In addition to above, the
criteria regarding satisfactory performance of works, personnel, establishment, plant,
equipment etc. may be incorporated according to the requirement of the Project.
B) For Store/Purchase Contracts

Prequalification/Post Qualification shall be based entirely upon the capability and
resources of prospective bidders to perform the particular contract satisfactorily, taking into
account their (i) experience and past performance on similar contracts for last 2 years (ii)
capabilities with respect to personnel, equipment and manufacturing facilities (iii) financial
standing through latest I.T.C.C., Annual report (balance sheet and Profit & Loss Account) of last 3
years. The quantity, delivery and value requirement shall be kept in view, while fixing the PQ
criteria. No bidder should be denied prequalification/post qualification for reasons unrelated to its
capability and resources to successfully perform the contract.
6. It is suggested that these instructions may be circulated amongst the concerned officials of your
organization for guidance in fixing prequalification criteria. These instructions are also available on
CVC’s website, http://cvc.nic.in.
Sd/-
(M.P. Juneja)
CVC – OM No. OFF 1 CTE 1 dated 25.11.2002

Appointment of Consultants
While highlighting the common lapses/ irregularities observed in the Construction works
undertaken by the PSUs/Banks, under the guidance of Consultants, the Commission had issued certain
guidelines vide letter No. 3L PRC 1 dated 12.11.1982 [ copy enclosed-Annexure-1] so as to avoid
recurrence of such lapses. These were further emphasized vide letter No. 3L-IRC-1 dated 10.1.1983 [copy
enclosed-Annexure-II], inter-alia, bringing out the guidelines circulated by the Bureau of Public
Enterprises in their letter no. DPE/GL-025/78/Prodn./PCR/ 2/77/BPE/Prodn. dated 15.07.1978 and it was
reiterated that the appointment of Consultants should be made in a transparent manner.
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2. However, it has been observed during intensive examination of various works/contracts by the
CTEO that these instructions are not being followed by a large number of organizations. The consultants
are still appointed in an ad-hoc and arbitrary manner without inviting tenders and without collecting
adequate data about their performance, capability and experience. In some cases, the consultants were
appointed after holding direct discussions with only one firm without clearly indicating the job-content
and consultation fee payable to them. Often the scope of work entrusted to the consultants is either not
defined property or the consultants are given a free hand to handle the case due to which they experiment
with impractical, fanciful and exotic ideas resulting in unwarranted costs. The organizations display an
over-dependence on consultants and invariably abdicate their responsibility completely to the latter. The
officials do not over see the working of the consultants resulting in the latter exploiting the circumstances
and at times, in collusion with the contractors, give biased recommendations in favour of a particular firm.
It has also been noticed that the consultants recommend acceptance of inferior items/equipments / payment
for inadmissible items and also give undue benefit to the contractors like non-recovery of penalties for the
delayed completion. The position in respect of projects with multiple consultants is still worse as the self-
interest of so many outside agencies takes precedence over the loyalty towards the organization. These
agencies tend to collude or collide with each other, and both the situations are detrimental to the smooth
implementation of the project.
3. Some of the common irregularities/lapses observed during the last four years or so in this regard
are highlighted as under:-
i) One organization engaged architect from a very old panel, prepared about 15 years back.
ii) An organization invited and short-listed 5 consultants but awarded the contract to the highest
bidder on the plea that the bidder had done a very good job in some other project with the
organization. Extra amount of account of travel expenses, boarding and lodging was also
sanctioned beyond contractual terms.
iii) A bank for construction of its Head Office in Mumbai, shortlisted three firms after a thorough
scrutiny of offers submitted by a large number of bidders. The price bids of these firms were
opened, but in a surprising manner, the work of consultancy was awarded to an L-2 firm thus
compromising all ethics of tendering.
iv) The payment terms to the contractors are often allowed quite liberally. In one case, the
consultant’s fee was paid on quarterly basis without linking the same with the progress of the
project. Full payments had been authorized even before the completion of the project. In another
work, the consultants were paid substantial amount at an early stage of the project though they had
submitted only preliminary drawings. Subsequently, the consultants failed to complete the job and
the department took no action against them. In yet another case, the consultant was allowed extra
payment for additional documents that he had to generate due to retendering of the case. However,
the reasons for re-tendering were found attributable to the consultants and instead of penalizing,
they were rewarded with extra payment.
v) The consultants tend to increase the cost of the work for more fees as generally the fee of the
consultants is fixed at a certain percentage of the final cost of project. In an office building work,
tender was accepted for Rs.10.00 crores but during execution, specifications were changed and
actual cost on completion was twice the tendered cost. Thus, the consultant was unduly benefited
as there was no maximum limit fixed for the consultant’s fee.
vi) In the consultancy agreement generally the nature of repetitive type of work is not defined. In one
work, 4 similar blocks comprising of 100 hostel rooms each were constructed. The consultants
were paid same standard fees for each block. Due to this, the organization suffered loss at the cost
of the consultant.
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vii) There is no check on consultant’s planning, design and execution. In one work, pile
foundation for a workshop building was designed with the capacity of the piles, capable of
carrying twice the required load. In the same project, high capacity piles (450 mm dia, 20 m deep)
were provided for a single-storeyed ordinary office building, which did not require pile foundation
at all.
viii) In another case, the project was for a design and construction of a training institute on a
big plot of land in a very posh and expensive area. The whole construction was two storyed with
no scope for future expansion Ironically all other buildings in the vicinity are multi-storeyed
highlighting the fact that space utilization here was very poor. Further, the walls in the reception
area and on the outside of the auditorium were provided with acoustic insulation with no rationale.
For air-conditioning of the library instead of providing a single AHU of suitable capacity with
ducting, etc. 20 plus AHUs had been provided in the room. Such fanciful ideas along with poor
planning and supervision resulted in the project suffering heavy cost and time overruns.
ix) In one of the works for a bank in Mumbai, the substation equipment has been installed in the
basement area, jeopardizing the safety aspect, as Mumbai gets its fair share of heavy rains and the
area is also in close proximity to the sea.
x) In many cases, the consultants charge exorbitant traveling expenses. For a work in Punjab,
Mumbai based Architects were appointed. The fee payable to them was Rs. 6.00 lakhs, but the
actual traveling expenses ultimately paid to them were to the tune of Rs. 7.5 lakhs.
xi) Sometimes the consultants pass on their responsibility to the contractor. In one work, the
consultant was supposed to give design ad drawing as per the consultancy agreement. While
preparing the tender document for construction work, the responsibility for the preparation of
drawings and structural design was entrusted with the construction contractor by adding a
condition to that effect. The contractors loaded the quoted rates for the above work and the
consultant was benefited at the cost of the organization.
xii) In case of road projects, it was observed that consultants under different categories like
general consultants, planning & design consultants and construction management consultants were
appointed for almost all the activities of the projects without competitive bidding. The work done
by the consultants is not checked by the departmental engineers who feel their job is mainly to
issue cheques to the consultants/contractors.
4. The above list is only illustrative and not exhaustive. The Commission would like to reiterate the
instructions regarding appointment of consultants. The appointment of consultants should be absolutely
need based and for specialized jobs only. The selection of consultants should be made in a transparent
manner through competitive bidding. The scope of work and role of consultants should be clearly defined
and the contract should incorporate clauses having adequate provisions for penalizing the consultants in
case of defaults by them at any stage of the project including delays attributable to the consultants. As far
as possible a Project Implementation Schedule indicating maximum permissible time for each activity
should be prepared with a view to arrest time overruns of the projects. There should be no major deviation
in the scope of work after the contract is awarded and the consultant should be penalized for poor planning
and supervision if the deviations result in excessive cost overruns. Further, the consultant’s fee should be
pegged based on the original contract value. The role of the consultants should be advisory and
recommendatory and final authority and responsibility should be with the departmental officers only.It is
suggested that these instructions may be circulated amongst the concerned officials of your organization
for guidance in appointment/working of consultants in the engineering works/contracts. These instructions
are also available on CVC’s web site, http://cvc.nic.in
CVC 70 | P a g e
Sd/-
(M.P.Juneja)
CVC – Circular No. 98/ORD/1 dated 03/08/2001

Improving Vigilance Administration – Tenders
Please refer to the instructions issued by the Commission vide its communication No.
8(1)(h)/98(1) dated 18.11.1998, banning post-tender negotiations except with L-1.
2. It is clarified that the CVC's instructions dated 18.11.1998, banning post-tender negotiations
except with L-1 (i.e. the lowest tenderer), pertain to the award of work/supply orders etc., where the
Government or the Government company has to make payment. If the tender is for sale of material by the
Government or the Government company, the post-tender negotiations are not to be held except with H-1
(i.e. the highest tenderer), if required.
Sd/-
(K.L. Ahuja)
CVC – Letter No. 98/ORD/1 dated 24/08/2000
Improving Vigilance Administration - Tenders
Please refer to the instructions issued by Commission vide its communication No. 8 (1) (h)/98(1)
dated 18.11.98, banning post tender negotiations except with L-1.
2. The Commission has been getting a number of queries on how to handle the matter if the quantity
to be ordered is more than L-1 can supply or about placement of orders on Public Sector Undertakings. It
is requested that such matters may be dealt with in accordance with the clarifications issued by the
Commission vide its letter of even number dated 15.3.99 (copy enclosed).
3. Some of the organisations have sought clarification as to whether they can consider the L-2 offer
or negotiate with that firm if L-1 withdraws his offer before the work order is placed, or before the supply
or execution of work order takes place. In this regard, it is clarified that such a situation may be avoided if
a two-bid system is followed (techno-commercial) so that proper assessment of the offers is made before
the award of work order., Therefore, if L-1 party backs out, there should be retendering in a transparent
and fair manner. The authority may in such a situation call for limited or short notice tender if so justified
in the interest of work and take a decision on the basis of lowest tender.
4. The Commission has also been getting references for its advice on the procedures being followed
in individual cases of tenders. The Commission would not involve itself in the decision making process of
individual organisations. It, however, would expects the organisations to implement its instructions dated
18.11.98, in its spirit and to ensure that the decisions of administrative authorities are transparent.
Sd/-
(K.L.Ahuja)
CVC – Circular No. 3(V)/99/9 dated 01/10/1999

Applicability of CVC’s instruction No.8(1)(h)/98(1) dated 18/11/98 on
post-tender negotiations to Projects of the World Bank & other
international funding agencies
CVC 71 | P a g e
The Commission has banned post- tender negotiations except with L-1 vide its instruction
No.8(1)(h)/98(1) dated 18/11/98. Subsequently, the Commission had also issued a clarification vide
No.98/ORD/1 dated 15/3/99. Notwithstanding the clarifications issued by the Commission, many
Departments/Organisations have been approaching the Commission on specific issues which were
clarified to the individual departments/organisations.
2. A clarification sought by many Departments/Organisation, which is vital and has relevance to
many of the organisations relates to the applicability of the above said instruction of CVC to World Bank
Projects. It has been decided after due consideration, that in so far as the World Bank Projects and other
international funding agencies such as IMF, ADB etc. are concerned, the department/organisations have
no other alternative but to go by the criteria prescribed by the World Bank/concerned agencies and the
Commission's instruction would not be applicable specifically to those projects. However, the instructions
of the CVC will be binding on purchases/sales made by the departments within the Country. The CVC's
instruction of 18/11/98 will apply even if they are made with sources outside the Country and if they are
within the budget provisions and normal operations of the Department/Organisation.
3. All CVOs may ensure strict compliance of this instruction.
4. This instruction is also available on CVC's Website at http://cvc.nic.in
Sd/-
N. Vittal
Central Vigilance Commissioner
CVC – Letter No. 98/ORD/1 dated 15/03/1999

Improving vigilance administration - Tenders
Please refer to CVC’s instructions issued under letter No.8(1)(h)/98(I) dt. 18.11.98 banning post
tender negotiations except with L-1 i.e., the lowest tenderer. Some of the organizations have sought
clarifications from the Commission as they are facing problems in implementing these instructions. The
following clarifications are, therefore, issued with the approval of Central Vigilance Commissioner
(i) The Government of India has a purchase preference policy so far as the public sector
enterprises are concerned. It is clarified that the ban on the post tender negotiations does
not mean that the policy of the Government of India for purchase preference for public
sector should not be implemented.
(ii) Incidentally, some organisations have been using the public sector as a shield or a conduit
for getting costly inputs or for improper purchases. This also should be avoided.
(iii) Another issue that has been raised is that many a time the quantity to be ordered is much
more than L1 alone can supply. In such cases the quantity order may be distributed in
such a manner that the purchase is done in a fair transparent and equitable manner.
Sd/-
(P.S.Fatehullah)
Director
Ministry of Finance (Deptt. of Expenditure) – Office Memorandum No. 8(4)-E.II(A)/98 dated
17/12/1998
Purchase of Computer Systems by Government Departments
The undersigned is directed to invite attention to the provisions of GFR 102(1) and the Annexure
to the same according to which "Open Tender" system (that is, invitation to tender by public
advertisement) should be used as a general rule in all cases in which the estimated value of demand is
₹50,000/- and above.
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2. It has been brought to the notice of this Ministry by Deptt. of Electronics that certain
Ministries/Deptts etc. issue tenders for purchase of personal computers where they specify the
international brands like IBM, Compaq, HP, Digital, DELL or Gateway Micron. This vitiates the
guidelines for open tender system laid down in GFRs and deprives other brands including domestic
manufacturers of an opportunity to participate in the tender. Further Deptt. of Electronics have pointed out
that brand names do not have any great advantage since at the broad level there is hardly any difference
between the competing products because they predominantly use Intel microprocessors.
3. Separately, DGS&D have informed that generalised specifications for personal computers have
been finalised and the process of concluding rate contract is being initiated.
4. It is, therefore advised that Ministries/Departments should follow the open tender system without
vitiating it by specifying brand names in accordance with the provisions in GFRs for purchase of personal
computers till a rate contract for computers is concluded by DGS&D. Thereafter, computers could be
purchased on rate contract basis.
Sd/-
(Narain Das)
Under Secretary to the Govt. of India
CVC – Circular No. 8(1)(h)/98(1) dated 18/11/1998

Improving vigilance administration
The Central Vigilance Commission Ordinance 1998 under Section 8(1)(h) directs that the power
and function of the CVC will be the following:
“exercise superintendence over the vigilance administration of the various Ministries of the
Central Government or corporations established by or under any Central Act, Government
companies, societies and local authorities owned or controlled by that Government”.
2. Improving vigilance administration is possible only if system improvements are made to prevent
the possibilities of corruption and also encourage a culture of honesty. In exercise of the powers conferred
on the CVC by Section 8(1)(h), the following instructions are issued for compliance:
2.1 Creating a culture of honesty
Many organisations have a reputation for corruption. The junior employees and officers who join the
organisations hopefully may not be so corruption minded as those who have already been part of the
corrupt system. In order to ensure that a culture of honesty is encouraged and the junior officers do not
have the excuse that because their seniors are corrupt, that they have to also adopt the corrupt practices, it
is decided with immediate effect that junior employees who initiate any proposal relating to vigilance
matters which is likely to result in a reference to the CVC can send a copy directly to the CVC by name.
This copy will be kept in the office of the CVC and data fed into the computer. If within a reasonable time
of say three to six months, the reference does not come to the CVC, the CVC then can verify with the
concerned authorities in the department as to what happened to the vigilance case initiated by the junior
employee. If there is an attempt to protect the corrupt or dilute the charges, this will also become visible.
Above all the junior officers will not have the excuse that they have to fall in line with the corrupt seniors.
Incidentally, the seniors also cannot treat the references made directly to the CVC as an act of indiscipline
because the junior officers will be complying with the instructions issued under Section 8(1)(h) of the
CVC 73 | P a g e
CVC Ordinance 1998. However, if a junior officer makes a false or frivolous complaint it will be viewed
adversely.
2.2 Greater transparency in administration
2.2.1 One major source of corruption arises because of lack of transparency. There is a scope for patronage
and corruption especially in matters relating to tenders, cases where exercise of discretion relating to out
of turn conferment of facilities/ privileges and so on. Each Organisation may identify such items which
provide scope for corruption and where greater transparency would be useful. There is a necessity to
maintain secrecy even in matters where discretion has to be exercised. But once the discretion has been
exercised or as in matters of tenders, once the tender has been finalised, there is no need for the secrecy. A
practice, therefore, must be adopted with immediate effect by all organisations within the purview of the
CVC that they will publish on the notice board and in the organisation’s regular publication the details of
all such cases regarding tenders or out of turn allotments or discretion exercised in favour of an
employee/party. The very process of publication of this information will provide an automatic check for
corruption induced decisions or undue favours which go against the principles of healthy vigilance
administration.
2.2.2 The CVC will in course of time take up each organisation and review to see whether any additions
and alterations have to be made to the list of items which the organisation identified in the first instance
for the monthly communications for publicity in the interests of greater transparency. This may be
implemented with immediate effect.
2.3 Speedy departmental inquiries

2.3.1 One major source of corruption is that the guilty are not punished adequately and more important
they are not punished promptly. This is because of the prolonged delays in the departmental inquiry
procedures. One of the reasons for the departmental inquiry being delayed is that the inquiry officers have
already got their regular burden of work and this inquiry is to be done in addition to their normal work.
The same is true for the Presenting Officers also.
2.3.2 Each organisation, therefore, may immediately review all the pending cases and the Disciplinary
Authority may appoint Inquiry Officers from among retired honest employees for conducting the inquiries.
The names of these officers may be got cleared by the CVC.
The CVC will also separately issue an advertisement and start building a panel of names all over India
who can supplement the inquiry officers work in the department. In fact, it will be a healthy practice to
have all the inquiries to be done only through such retired employees because it can then be ensured that
the departmental inquiries can be completed in time. If any service/departmental rules are in conflict with
the above instructions they must be modified with immediate effect.
2.3.3 In order to ensure that the departmental inquiries are completed in time, the following time limits are
prescribed:
(i) In all cases which are presently pending for appointment of Inquiry Officer and Presenting
Officer, such appointment should be made within one month. In all other cases, the Inquiry
Officer and the Presenting Officer should be appointed, wherever necessary, immediately after
the receipt of the public servant’s written statement of defence denying the charges.
(ii) The Oral inquiry, including the submission of the Inquiry Officer’s report, should be
completed within a period of 6 months from the date of appointment of the Inquiry Officer. In
the preliminary inquiry in the beginning requiring the first appearance of the charged officers
and the Presenting Officer, the Inquiry Officer should lay down a definite time-bound
CVC 74 | P a g e
programme for inspection of the listed documents, submission of the lists of defence
documents and defence witnesses and inspection of defence documents before the regular
hearing is taken up. The regular hearing, once started, should be conducted on day-to-day
basis until completed and adjournment should not be granted on frivolous grounds.
2.3.4 One of the causes for delay is repeated adjournments. Not more than two adjournments should be
given in any case so that the time limit of six months for departmental inquiry can be observed.
2.3.5 The IO/PO, DA and the CVO will be accountable for the strict compliance of the above instructions
in every case.
2.4 Tenders
Tenders are generally a major source of corruption. In order to avoid corruption, a more transparent and
effective system must be introduced. As post tender negotiations are the main source of corruption, post
tender negotiations are banned with immediate effect except in the case of negotiations with L1 (i.e.
Lowest tenderer).
3. Hindi version will follow.
Sd/-
( N.VITTAL)
CENTRAL VIGILANCE COMMISSIONER
CVC – OM No. UU/POL/19 dated 08/10/1997
Grant of interest free mobilization advance
It has come to the notice of this Commission that PSUs are stipulating payment of interest free
mobilization advance in their tenders. Many times mobilization advance is allowed after acceptance of
tender also. The amount of mobilization advance thus paid to the contractor is prone to be used by him for
building his own capital or for the purpose other than the one for which it is disbursed. For big projects
mobilization advance of 5 to 10% stipulated in the contract works out to a huge amount and the contractor
is likely to be benefited with interest free amount to a very big extent. Normally while preparing
justification, elements of gain in terms of interest on capital investment by way of mobilization advance is
also not considered and thus the contractor gets higher rates than that may be justified. In case there is a
delay in commencement of work the contractor is likely to get undue benefit by way of retention of huge
money.
2. It is, therefore, desired that adequate steps may be taken to ensure stipulation of mobilization
advance only for selected works and advance should be interest bearing so that contractor does not draw
undue benefit. Timely execution/completion of all projects is an essential requirement and the contractor
would like to draw interest bearing mobilization advance only when he needs to maintain his cash flow.
Sd/-
(P.K.Gopinath)
Director
CVC – Circular No. 3L-IRC 1 dated 10/01/1983

Appointment of Consultant
Guidelines in connection with the selection of consultants by Public Sector Enterprises for
preparation of project reports have been laid down by Bureau of Public Enterprises vide letter No.
BPE/GL-025/78/Prodn./PCR/2/77/BPE/Prodn. dt. 15th July, 1978.
In brief the guidelines laid down are: -
CVC 75 | P a g e
A. For any new projects, expansions, modernization/modification of the existing projects involving
an expenditure of Rs.5 crores and above these guidelines are applicable.
B. The pre-qualifications public notice should be issued to enlist names of suitable consultants.
C. The pre-qualification bid should be screened by a scrutinising committee.
D. The final selection and commissioning of the consultant should be done with the approval of the
board of public sector enterprises.
E. Based on the above guidelines each enterprise should prepare their own instructions and procedure
duly approved by the board for the appointment of consultants to ensure that the selection is made
with maximum attention to the suitability, competence and proven track record.
The Chief Technical Engineer Organisation under the control of the Commission has had occasion
to examine and comment upon works undertaken by public sector undertakings. Common
irregularities/lapses noticed in the construction works undertaken by the public sector undertakings/banks
have already been brought to your notice vide engineering works, it was observed that consultants were
appointed on ad-hoc basis without going through proper formalities as suggested by B.P.E. and/or the
consultant was chosen from an old panel thereby
restricting competition. In most of the cases public sector enterprises have not framed their own
instructions and procedures duly approved by the Board.
Even though individually such works are less than ₹5 crores, it is necessary that the appointment
of consultant should not be made arbitrary or ad-hoc.
It is, therefore, necessary that urgent action is taken to formulate a rational policy for employment
of consultants based on the broad outlines given by B.P.E.
This may be given priority and progress made in formulation of rules and procedure may be
reported by 31-3-1983.
Sd/-
(D.C. Gupta)
Director
CVC – Circular No. 3L-PRC 1 dated 12/11/1982
Irregularities/lapses observed in the construction works undertaken by

Public sector undertakings/banks
The Chief Technical Examiner’s Organization under the Commission has had occasion to examine
and comment upon the works undertaken by Public Sector Undertakings, Banks etc. under the guidance of
consultants. Common lapses noticed as a result of these inspections are enumerated below:-
i) Employment of consultant without verifying his credentials and capacity or capability to do the
work assigned to him.
ii) Inadequate planning of work and incorrect preparation or non-preparation of detailed estimates by
consultants.
iii) Non-preparation of justification statement for the rates quoted in tender, resulting in contract being
awarded at very high rates.
iv) Rejection of the lowest tender without adequate justification, on the ground that the contractor is
not reliable or lacks capacity to execute the work, even though he was included in the original pre-
qualification list.
v) Improper evaluation of tenders, leading to allotment of works wrongly with ultimate loss to the
public undertaking.
CVC 76 | P a g e
vi) Allowing upward revision of rates in some cases by contractors on very flimsy grounds during the
process of negotiations, so that the lowest tenderer manages to make up the difference of cost
between his quotation and the second lowest quotation.
vii) Payment of money to contractors outside the terms of contract. For example, in a large number of
cases contract is for fixed price, but substantial payment is made on the ground of escalation of
prices.
viii) Use of inferior material in the construction, while payment is made at full rates on the approval of
the consultant without making any financial adjustment.
ix) Substitution of low-rated items by higher-rated items beneficial to contractor.
x) Lack of proper supervisory arrangement by the undertakings placing total reliance on the consultant
for even preparation of the bill which leads to incorrect measurement of works and payment for the
items of work not done.
In view of these factors, it is recommended that while consultants may be engaged for the
purposes of original planning and designing, scrutiny of tenders and execution of work should, as far as
possible, be done by technical officers directly and fully answerable to the public undertaking/banks etc.
concerned. For this purpose, engineers may be taken on deputation from Government departments, such as
the CPWD. To the extent a consultant is engaged, it is also necessary to ensure that the relationship
between the undertaking and the consultant is correctly defined so that the consultant can be held legally
and financially responsible for the work entrusted to him.
It is requested that suitable arrangements may be made for properly awarding works and
exercising effective supervision and control in their execution with a view to ensure timely and systematic
completion. Care may also be taken to guard against the types of irregularities indicated above.
Sd/-
(D.C. Gupta)
Director
CVC 77 | P a g e
CHIEF TECHNICAL INSPECTORS’ ORGANISATION
I Background
5.1 The Chief Technical Examiner’s Organisation (CTEO) was established in the year 1957 under the
Ministry of Works, Housing and Supply, now known as the Ministry of Urban Development. The
objective of Chief Technical Examiner’s Organisation was to conduct concurrent technical audits
of works of the Central Public Works Department (CPWD) and securing economy in expenditure
including better technical and financial control.
5.2 The Santhanam Committee on prevention of corruption, while appreciating the contribution of
Chief Technical Examiner’s Organization (CTEO) in the year 1963, recommended its
strengthening so as to make it more effective. It also recommended enlarging the jurisdiction of
CTEO so as to cover construction works undertaken by other Ministries/Departments too and to
place it under the administrative control of the Central Vigilance Commission. As these
recommendations were accepted by the Government, CTEO was placed under the administrative
control of the Central Vigilance Commission (CVC) in the year 1964.
5.3 The CTEO initially started with intensive examination of selected civil and electrical construction
works only. However later, with the growing expenditure on purchase of stores, outsourcing of
services etc., CTEO started examining these contracts also. Presently, intensive examination is
being done by CTEO in respect of all contractual activities of the Central Government / Central
PSUs and other Government organizations ranging from execution of work, purchase of stores,
hiring of services etc.,that are financed from public funds.
5.4 The Commission has been emphasising from time to time use of e-procurement technologies for
procurements / contracting which would lead to transparency, savings in procurements and better
project management in the government organisations. Considering the increasing complexities
and use of technology in contracting and procurements, the Commission is of the view that the
CTEO requires expertise of technical personnel with diverse engineering backgrounds and
experience in sectors like Petroleum, IT, Steel, Power, Coal and such other areas. Induction of
specialists having expertise and training in emerging technologies would enable the CTEO to
address complex issues in a better way. The Commission is at present constrained in terms of lack
of desired infrastructure for better insight into large value contracts.
5.5 Excerpts on CTEO’s working from 76th Report, Demand for Grants (2015-16) of the Ministry of
Personnel, Public Grievances and Pensions are as follows “The Committee commends the
work of the CTEO which helped in saving of resources and recommends that avenues may
be explored on how the CTEO can be provided with the desired manpower as soon as
possible. The nature of graft and corruption is becoming highly complex and appropriate
analysis can only be carried out with the help of professionals with experience and expertise
in the area. The DoPT must look into the matter expeditiously and ensure that the
organisation is well staffed. Sufficient budgetary allocations should be made to ensure that
the organisation can attract the right personnel and is able to create required support
infrastructure to investigate complaints. The organisation may also explore the possibility of
taking professionals on deputations or on contract.” (Reference: Para 4.20, PP 53 of 76th
Report, Demand for Grants (2015-16) of the Ministry of Personnel, Public Grievances and
Pensions).
5.6 The selection of procurement cases, works or contracts for Intensive Examination is either suo-
motu or based on inputs like Quarterly Progress Reports (QPRs) made available by the Chief
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Vigilance Officers (CVOs) of the different organisations. The CVOs in the QPR are required to
furnish details pertaining to on-going Civil Works/Turnkey Works/Stores & Purchase/Contracts
under Public Private Partnership/ Leasing / Purchase / Sale of Goods/ Scrap/Land etc. with
contract value above the prescribed threshold values. Some of the reported works are selected for
intensive examination. If the CVO of any organization feels the necessity of conducting Intensive
Examination of a lower value Contract or Works, he/ she may recommend so. The threshold
values w.e.f. July-September, 2012 quarter are: Rs. 5 crores and above for Civil and Turnkey
works, Contracts for Stores & Purchase, Public Private Partnership, Sale of Goods, Scrap and
Land etc; Rs. 1 crore for Electrical, Mechanical works, Maintenance & Service contracts,
Manpower supply and Consultancy contracts etc.; Rs. 50 lakhs and above for Medical
Equipments; Rs. 10 lakhs for Horticulture works and four largest value contracts for supply of
medicines.
5.7 It is observed that QPRs from several organisations / departments are not forthcoming either in
time or otherwise. As such, those works remain unreported. This results in such works remaining
unconsidered during selection for carrying out intensive examination. As the QPRs received are
voluminous in nature, it is difficult for the Commission to pinpoint the defaulting organization(s)
that have either not submitted or submitted it late. CVOs/Heads of the organizations have been,
therefore, requested to ensure timely submission of QPRs covering all works/procurement cases
above threshold values.
5.8 In the Intensive Examination reports, observations on over-payments, quality deficiencies, time
and cost overrun, lack of transparency and fairness, non-adherence to public procurement
procedures, tax compliance, etc. are brought to the notice of executing organizations. The action
taken on these observations resulted in a large number of systemic improvements, besides
punitive action against erring officials, during the year 2015. Recoveries to the tune of Rs. 99.01
Crores were also made by various departments from the contractors after such deficiencies were
pointed out during examinations in the year 2015.
5.9 Apart from Intensive Examinations, CTEO provides technical advice to the Commission in the
vigilance investigation against complaints. During the year 2015, such advice was furnished in
682 cases. CTEO also facilitates / conducts training sessions on the subjects like Preventive
Vigilance, Tendering and Contracts, e-Procurement and Reverse Auction, etc., for the benefit of
CVOs and other executives of different government entities and organizations.
II Technical Examinations
5.10 During the year 2015, the CTEO undertook examination of sixty seven projects/works covering
forty eight organizations. The value of these projects/contracts was over Rs. 28,055 crores. The
summarised position of number of Intensive Examinations conducted in Governments
Departments, Banks & PSUs is given below in Table -11.
Table – 11
Intensive Examinations conducted by CTEO during the year 2015
Organization No. of Organisations No. of Intensive Examinations
Government Departments 12 19
Banks/Insurance Companies & 02 03
Financial Institutions
Public Sector Undertakings, 34 45
Autonomous Bodies, etc.
Total 48 67
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5.11 As per the extant instructions, the first reply by CVO to the para / observations of Intensive
Examination Report is required to be furnished within 60 days from the date of issue of I/E
Report while replies to subsequent rejoinders should be given by CVOs within 45 days from their
receipt. However, delay in submitting the reply has been observed in general causing delays in
bringing the report to its logical conclusion. Such cases of delay / non-compliance observed
during 2015 are listed below: -
a. Construction of North Eastern Institute of Ayurveda & Homeopathy at NEIGRIHMS, Shillong

under department of AYUSH, Ministry of Health & Family Welfare.
b. Construction of AIIMS Housing Complex, Phase-II at Bhubaneshwar under Ministry of Health &
Family Welfare.
c. Construction of Hospital Complex at AIIMS Bhopal under Ministry of Health & Family Welfare.
d. Face lifting/Interior of Existing Hospital Block & C/o staff quarters at ESIC hospital, Noida,
ESIC under Ministry of Labour.
e. Construction of ESIC Medical College & Housing, Basaidarpur, N Delhi, ESIC under Ministry of
Labour.
f. Construction of ESIC Medical College & Hospital, Bihta, Patna, ESIC under Ministry of Labour.
In view of abnormal delays/ non-compliance, the cases mentioned at a, b & c were converted into
vigilance references, with the approval of the Commission, for conducting detailed vigilance investigation
by respective CVOs. Cases at d, e & f above are being pursued further.
5.12 Some of the organizations, where Intensive Examination was undertaken in the year 2015 are Air
India (AI), Airports Authority of India (AAI), Central Public Works Department (CPWD),
Defence Research Development Organisation (DRDO), Employees’ State Insurance Corporation
(ESIC), Gas Authority of India Ltd. (GAIL), Hindustan Aeronautics Ltd.(HAL), Indian Institute
of Management, Lucknow (IIM-L), Indian Institute of Technology, Hyderabad (IIT-H), Indian
Railways, IRCTC, Municipal Corporation of Delhi (MCD), National Buildings Construction
Corporation (NBCC), National Highways Authority of India (NHAI), New Delhi Municipal
Corporation (NDMC), Rail India Technical and Economic Services (RITES), Oil and Natural Gas
Corporation (ONGC) State Bank of India (SBI) etc.
5.13 Inspection reports are forwarded to the concerned head of the organisation and the respective
CVOs for their comments. The Commission refers serious cases involving suspected criminal
culpability to CBI. Other cases of irregularities / misconducts with perceived vigilance angle are
referred to respective CVO for detailed vigilance investigation and fixing responsibility. During
the year 2015, thirty such cases were referred to the CVOs for detailed vigilance investigation.
5.14 As a result of the inspections conducted by the CTEO, recoveries to the tune of Rs. 99.01 crores
were made during the year 2015. The recoveries pertained mainly due to overpayments made to
contractors, deficiencies either in the quality of materials used or services rendered, damages due
to delay in execution, non adherence to the contract clauses, non compliance of tax provisions etc.
Some important irregularities observed during the Intensive Examinations are at Appendix-VI.
III System improvements arising out of CTEO Examinations during 2015
5.15 As a result of observations made by CTEO during the Intensive Examinations, a number of
system improvements were initiated by respective organisations. These system improvements
were on subjects like accuracy in preparation of cost estimate, framing of rules pertaining to
percentage limit above justified cost for acceptance of tenders, compliance with Commission’s
circulars, etc. Some of the system improvements undertaken in various organizations are given in
Appendix-VII.
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IV Cases arising out of Intensive Examination taken up for detailed vigilance investigations
during 2015
5.16 In a residential building work being executed by a Central PSU costing around Rs. 100 crores,
another work for construction of (a) Club Building and Swimming Pool (b) Local Shopping and
Milk Booth (c) Convenience Shopping and (d) Play School amounting to Rs.8.5 crores approx.
was awarded to the main contractor on nomination basis at the same percentage applicable for
original work. This work had no direct link with the agreement of main work. CVO of the
organisation had agreed that separate tenders should have been invited for this additional work.
Para has been referred to CVO concerned on 19.02.2015 for carrying out detailed vigilance
investigation. Report is awaited.
5.17 In a work executed by a Rail Corporation costing around Rs. 153 crores, one of the bidders
submitted experience certificate of a work done by them in a JV formation with another firm with
equal partnership. As per tender conditions, only 50% value of this work should have been
considered for qualification of this firm. Had only 50% value of this work been considered, this
firm would not have qualified. This firm later on emerged as L1 bidder and was considered for
award of work. Thus, the work was awarded to an ineligible firm. Para has been referred to CVO
concerned on 01.09.2015 for carrying out detailed vigilance investigation. Report is awaited.
5.18 In a residential building work being executed by a Central PSU costing around Rs. 22.6 crores,
one of the bidders was initially technically qualified along with other bidders. After opening of
price bids this bidder emerged as L1 bidder. After opening of financial bid, performance
certificate submitted by this bidder was sent for verification. The issuing authority of the
certificate did not confirm the issue of the certificate. Therefore, bid submitted by this bidder was
rejected and snap bids were invited. Work was awarded to L1 bidder in snap bids. The credentials
submitted by other bidders who submitted snap bid were not got verified. The bidder to whom
work was awarded after snap bids, had submitted Bank Solvency of Rs.650 lakhs against
requirement of Rs.652.20 lakhs but he was qualified for opening of price bid. The agency should
have been disqualified in the pre-qualification criteria. Thus, an ineligible firm was awarded the
work. Para has been referred to CVO concerned on 19.02.2015 for carrying out detailed vigilance
5.19 In a residential building work being executed by a central PSU costing around Rs. 23.3 crores, as
per agreement condition, a maximum of 428.59 MT of reinforcement steel available in
organisation’s store was to be issued to the contractor. Balance steel was to be arranged by the
contractor himself at his cost. During execution, 284.20 MT additional steel was also procured by
the organisation from the market and issued to the contractor. Recovery for the additional steel
was not made at market rate, resulting in undue advantage to the contractor. Later on, the contract
of main contractor was rescinded and he was informed that the balance work shall be got
executed at his risk and cost. The balance work left over by this firm amounting to Rs.13.20
crores was awarded to another contractor at an amount of Rs.16.20 crores. No recovery for this
risk and cost amount, the tentative value of which is approximately Rs.3.0 crores was made from
the initial contractor resulting in undue favour to this firm. Para has been referred to CVO
concerned on 19.02.2015 for carrying out detailed vigilance investigation. Report is awaited.
5.20 In a case of construction of residential and academic buildings of an institute valuing more than
Rs. 100 crores, 11 bidders were qualified at Pre Qualification (PQ) stage but bid documents were
issued to 07 bidders only, 04 were eliminated on flimsy grounds in an arbitrary manner. Out of
the seven, only three had submitted their bids. However, during opening, one of the bids was
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found incomplete and was disqualified. It was decided that bids of other two bidders shall not be
opened and tenders would be called afresh. But in second call, an additional condition prohibiting
the bidders who were disqualified in earlier call was incorporated without approval of the
competent authority eventually eliminating all bidders. Thus, financial bids were allowed to be
received from the same seven (07) bidders only, despite the fact that four of them were non-
responsive and one was disqualified in the first call; ending up with the same two bidders who
had submitted earlier. Due to such illegitimate and restrictive condition the same two bidders
submitted their bids in the second call. Work was awarded to the lowest bidder @ 22.75% higher
than the estimated cost justifying an exorbitant rate on flimsy and inadmissible factors. Para has
been referred to CVO concerned on 12.02.2015 for carrying out detailed vigilance investigation.
Report is awaited.
5.21 River protection work costing around Rs 200 crores was awarded by a State Government to a
Central PSU on nomination @ 10% margin money. The Central PSU invited Expression of
Interest (EOI). Expression of interest was deficient regarding definition of similar work, quantum
of work executed as experience, financial qualification etc., for associating for a work with PSU.
Publicity was given for six days only, the Pre-Qualification (PQ) criteria was scaled down and
published only 3 days before receipt of the bid. Due to inadequate publicity, apparently only 2
bidders participated in the bid i.e. ‘A-B’ & ‘C-D’. Offer of both the bidders were received in the
form of JVs, inspite of no such provision in invitation of bid for allowing JVs.
“Director of ‘A’ in one JV and Proprietor of ‘C’ of another JV was the same. Scope of the work
was split and divided among both the JV bidders i.e. Detailed Project Report (DPR) &
Supervision work was awarded to ‘A-B’ (JV) and execution work to “C-D” (JV), without any
explicit provision to do so. Such award of work to two different entities having a common person
is in violation of Commission’s guidelines regarding conflict of interest. In addition work was
awarded without any apparent competition. The Contract was awarded without any apparent
competition & receiving of financial offer by awarding the work at stipulated rates of standard
schedule of Bihar prevalent at that time. The awarded rate was revised upward every time on
revision of such standard Schedule of rate by the State Govt. in a non transparent manner. Non
stipulation of conditions of Milestones, Date of Start, Completion Period and other contract
conditions facilitated the contractor to get away without attracting provisions of any liquidated
damages inspite of delay on his part. Consultancy work of DPR and Supervision was awarded by
mutual negotiation without any financial bid in a non-transparent manner. Consultancy contract
of DPR and Supervision was awarded at percentage of actual project cost, instead of initial
estimated cost in violation of extant CVC guidelines in this regard. Para has been referred to
CVO concerned on 08.06.2015 for carrying out detailed vigilance investigation. Report is
awaited.
5.22 In a procurement case of Primary Reformer Catalyst Tube by a Fertilizer PSU costing around Rs.
12 crores, contract was awarded on ‘Resultant Single Bidder Situation’. In this case, Limited
Tender Enquiries were issued to five enlisted vendors. The tender was issued for Tubes
manufactured through a particular welding technology although same was not going to affect the
operation of tubes and globally there was only one manufacturer of tubes with such technology.
The tender conditions in respect of Delivery Period and value of Earnest Money Deposit (EMD)
were made stringent due to which two shortlisted vendors did not participate and one vendor
submitted bid without EMD. Moreover, one bidder submitted delayed bid (submitted after bid
submission time but before bid opening time) due to which this bid was not considered. Even the
successful bidder had not submitted EMD along with his original techno-commercial bid. The
sole technically qualified bidder did not meet basic technical specification and the complete
tender terms and conditions but was accepted on the plea of urgency. There were many instances
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of substantial delay on part of concerned officials before and during tender process, which
indicated that urgency was artificially created. The bid validity of sole technically qualified
bidder was allowed to expire and then fresh price bid was taken. The original price bid was not
opened and subsequently same was found to be untraceable. After analyzing the rates of tubes
having same specifications in other Fertilizer PSUs, it was found that finalized rate of Reformer
tubes in the impugned contract was substantially on the higher side. Para has been referred to
CVO concerned on 06.04.2015 for carrying out detailed vigilance investigation. Report is
awaited.
5.23 In a composite works tender of a PSU having estimated value of about Rs. 66 crores, the
eligibility criteria in respect of Consortium were relaxed during tendering process. As per the
original eligibility criteria, all Consortium members were mandatorily required to possess
experience in any of the broad fields covering scope of work. But after relaxation, only the
Leader of the Consortium was allowed to possess entire work experience if other members of
Consortium were lacking in relevant criteria. Among all bidders, there was only one Consortium
which was eventually found to be successful after bid evaluation process. The Consortium
comprises of two companies in which the Secondary member did not possess relevant experience
of the tendered work. In the Consortium agreement, responsibility matrix mentioned that both
Leader and Secondary member will have ‘Prime Responsibility’ towards all activities. The
Consortium was finally awarded the contract although tender condition mentioned that division in
scope of work between Consortium members shall be commensurate with their past experience.
After award of work, the entire project was handled by the inexperienced member of the
Consortium. Leader of the Consortium expended merely five man-days in the entire project
having a time span of more than two years. Despite significant slippage from the beginning, the
Leader was not communicated and payments were released to the bank account of the
Consortium which was handled by an employee of Secondary member of the Consortium. The
Consortium was given preferential treatment as the awarded value of contract (which also
includes value of extra works) was considered for computing advance amount to the contractor
whereas reduced value of entrusted works (due to offloading of work on other contractors) was
considered for computing the values of Price Reduction Schedule / security tools. The invocation
of Risk & Cost clause was avoided by not revealing the quantum of offloaded work. During the
contract execution period, it was found that secondary member of the Consortium had submitted
forged documents in several tenders of the PSU. After verifications, the Consortium and both its
members were banned and their contract was short-closed without reconciliation of high valued
owner issued materials. Para has been referred to CVO concerned on 24.04.2015 for carrying out
detailed vigilance investigation. Report is awaited.
5.24 In a Consultancy contract of Public Sector Bank for implementing Core Banking Solution (CBS)
costing around Rs. 1.35 crores, open tenders were invited on two instances. As none of the
bidders in first tender managed to secure qualifying technical marks, it was decided to retender
with relaxed evaluation criteria. During retendering, apart from relaxing few parameters, the
majority of evaluation criteria were made restrictive by seeking consultant’s experience in only
Indian Public Sector Banks. This was contrary to the conditions of first tender where experience
in mid-sized Scheduled Commercial Banks was stipulated. Due to this restriction, no additional
eligible offer was received during retendering. Even the modified scoring criteria in the second
tender were favourable to a particular consultant. Para has been referred to CVO concerned for
carrying out detailed vigilance investigation. Report is awaited.
5.25 In a Consultancy contract, the Consultant escalated estimated cost of Core Banking Solution
(CBS) project from Rs. 164 crores to Rs. 254 crores just after issue of Core Banking Solution
CVC 83 | P a g e
tender, which was not found to be logical. The Consultant submitted an invoice against the
submission of a deliverable (study on integration of software applications with CBS) which was
dependent on the implementation of new CBS application and its interfaces. This invoice was
submitted by the Consultant well before the official finalization of CBS implementation tender.
This showed that the Consultant was confident about a particular CBS application before the
finalization of CBS implementation tender. The Consultant was reimbursed for traveling and
lodging expenses incurred during site visits for CBS tender evaluation, which was not permissible
as per contractual conditions. Para has been referred to CVO concerned for carrying out detailed
vigilance investigation. Report is awaited.
5.26 In a Core Banking Solution (CBS) tender of a Public Sector Bank having original estimated cost
of about Rs. 164 crore, there were 29 eligibility criteria having inconsistencies and were tailor-
made to suit some specific Original Equipment Manufacturers (OEMs). Even after utilizing the
two-staged screening process along with normalization process to bring all bids at par, the
Quality cum Cost Based evaluation (weightage of 80:20 to technical and financial part) was
adopted which had severe financial implication and was detrimental to the competition.
Evaluation conditions in respect of credential strength were favourable to a particular vendor.
Even the Consultant in its presentation to the Bank had predicted well before tender closing date
about the participation of only three vendors and their respective scores against credential
strength. Para has been referred to CVO concerned for carrying out detailed vigilance
V Important initiatives taken by the CTEO
In continuation of the efforts towards emphasis on preventive vigilance, CTEO provided

technical inputs to various organizations towards capacity building and sensitizing officials about
various aspects of vigilance. Specific areas pertaining to tenders and contracting, estimation of
rates, legal aspects in contracting etc. were covered in various training programs and seminars.
The organizations covered during the year were as under:
 Reserve Bank of India (RBI)

 Defence Research and Development Organization at Mussoorie & Pune
 Indian Institute of Material Management Summits at Mumbai & Vadodara
 Delhi Jal Board (DJB)
 United India Insurance Company Limited (UIICL)
 Engineering Projects India Ltd. (EPIL)
 Oil and Natural Gas Corporation (ONGC)
 Ordnance Factory, Kanpur
***************
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CVC Circulars/Guidelines on Procurement of Works, Goods & Services

44 40/11/06 22.11.2006 Improving vigilance administration by leveraging technology : Increasing

Short-comings in bid documents

CVC-Circular No. 18/12/12 dated 11.12.2012

Transparency in Works/Purchase/Consultancy contracts awarded on nomination basis – reg.

CVC – Circular No. 06/07/12 dated 23.07.2012

CVC – Circular No. 15/07/12 dated 30.07.2012

Works/Contracts Revised Value

CVC – Circular No. 12/06/12 dated 12/06/2012

Cases below ₹3 crore - Local police/State police.

Consideration of Indian Agents

Ref: Commission’s Circular Nos. 12-02-6-CTE/SPI(I)-2 dated 7.01.2003 and 21.04.2004

CVC – Circular No. 01/01/2012 dated 12/01/2012

Guidelines for compliance to Quality Requirements of e-Procurement Systems

Ref.: Commission’s Circular No. 23/06/010 dated 23/06/2010

4. This may be brought to the notice of all concerned.

CVC – Circular No. 11/09/11 dated 12/09/2011

Recoveries arising out of intensive examination conducted by Chief Technical Examiner

It is requested that these instructions may be notified to all concerned.

CVC – Circular No. 08/06/11 dated 24/06/2011

CVC – Circular No. 02/02/11 dated 17.02.2011

Commission had earlier issued guidelines on granting of ‘Mobilization Advance’ vide OM

CVC – Circular No. 01/02/11 dated 11.02.2011

Transparency in Tendering System

CVC – Circular No. 34/10/10 dated 07/10/2010

Design Mix Concrete

CVC – Circular No. 31/08/10 dated 13.08.2010

CVC – Circular No. 23/06/10 dated 23.06.2010

Leveraging of Technology for improving vigilance administration in the

Delay in initiating Disciplinary Proceedings.

During Intensive Examination of contracts/complaints by CTEO/CVC or CVOs of various

2. In such cases, two-fold actions is normally recommended by CVC -

3. In view of the above, following directions are hereby issued:

CVC – Office Order No. 19/05/10 dated 19.05.2010

Transparency in Works/Purchase/Consultancy contracts awarded on Nomination basis.

A check list to achieve security considerations in e-Procurement solutions is enclosed for

CHECK POINTS TO ACHIEVE SECURITY CONSIDERATIONS IN E-PROCUREMENT

Sl. SECURITY CONSIDERATIONS Please Tick√

CVC – Circular No. 17/04/2010 dated 19.04.2010

Integrity Pact – Selection and Recommendation of Independent

The Commission receives a number of requests for implementation of Integrity Pact in

CVC – Circular No. 01/01/2010 dated 20.01.2010

Tendering Process – Negotiations with L1

Review of Purchase Preference Policy for Products and Services of

The undersigned is directed to refer to this Department’s O.M. no.DPE.13(12)/2003-Fin. Vol.II

(DPE OM No.DPE/13(15)/2007-Fin dated 21st November 2007)

CVC – Circular No. 29/9/09 dated 17.09.2009

Implementation of e-tendering solutions

CVC – Circular No. 13/06/09 dated 11/08/2009

3. The organization-wise list of pending vigilance references of CTE is enclosed as Annexure’A’.

1.0 E-Procurement System

2. Security of e-Procurement system.

2.1 Security of e-procurement system is essentially an amalgamated output of Security of

2.2 Security Infrastructure level:

Issues Best Practices to achieve security considerations

management guessing during an authenticated session.

CVC – Circular No. 22/08/09 dated 11.08.2009

Adoption of Integrity Pact – Periodical regarding