Proprietary Article Certificate

Proprietary Article Certificate (PAC) is obtained after getting necessary approvals from the competent authorities (as per General Financial Rules-2017) if the buyer wants to buy any specific Original Equipment Manufacturer (OEM) product.[1]

PAC should be operated on manufacturer only. There are occasions when PAC products cannot be procured from OEM and have to be procured from another vendor as per sample, in the absence of detailed specifications or drawing. For such items, the supplier prepares detailed specification as well as drawing. Efforts could be taken to indigenize high value items as import substitute and in such cases, specifications including the drawing and other details could be formulated by the user department. Specification should be available (inspection can also be done) to ensure conformity with required quality standard of item being supplied.[2]

General-purpose items have easily available substitutes in the market and hence do not fall under the category of proprietary items. In addition, procurement of such general items from single agency/ manufacturer through PAC buying may lead to violation of Rule 149 (ii) and Rule 166 of GFR 2017.[3]

● Obtaining a PAC

Rule 166 of the GFR 2017[4]Single Tender Enquiry.

Procurement from a single source may be resorted to in the following circumstances:

(i) It is in the knowledge of the user department that only a particular firm is the manufacturer of the required goods

(ii) In a case of emergency, the required goods are necessarily to be purchased from a particular source and the reason for such decision is to be recorded and approval of competent authority obtained.

(iii) For standardisation of machinery or spare parts to be compatible to the existing sets of equipment (on the advice of a competent technical expert and approved by the competent authority), the required item is to be purchased only from a selected firm.

Proprietary Article Certificate in the following form is to be provided by the Ministry/Department before procuring the goods from a single source under the provision of sub Rule 166 (i) and 166 (iii) as applicable.

(i) The indented goods are manufactured by M/s…………………..

(ii) No other make or model is acceptable for the following reasons : ………………………………………………

(iii) Concurrence of finance wing to the proposal vide: ………………..

(iv) Approval of the competent authority vide

Signature with date and                                                          Signature, Head of the Department

designation of Indenting Officer                                            With Office Seal

Date:

While PAC is issued only in respect of the concerned OEM, the item may be bought from any dealer, stockist or distributor specified in that particular PAC on the basis of the information provided by the OEM, provided the purchase is accompanied by a proper manufacturer certification.[5]

●Availability of Specifications:[6]

Industrial specifications of item available: Indenter must indicate general parameters (dimensional, performance, etc.) Such specifications must be broad enough to permit participation of suppliers and adequate competition must not be obviated.

Specifications not available: Firm’s certificate of quality acceptable.

● Pricing Parameters

Proprietary Article Certificate (PAC) Buying[7] (as per General terms and conditions on GeM 3.0 (Version 1.12)):

 

While making procurement under PAC Buying on GeM, Buyer has to comply with following conditions:

a. In case a Govt. Buyer on GeM wants to make procurement on proprietary basis on the GeM Portal after obtaining the requisite approvals/PAC certificate from their competent authority as per Rule 166 of GFR-2017, the Buyer can use PAC filter provided on GeM for selecting a specific model/ make available from a particular GeM Seller.

b. The Seller’s price on the Portal is just their offer prices and the proper discovery of price generally happens through bidding/RA. Moreover, in PAC procurement irrespective of multiple listing by authorised sellers, the important issue of price control remaining with the OEM cannot be overlooked. Therefore, in case of all the PAC procurements, the Buyers will have to carry out extra due diligence in establishing the reasonableness of prices before placement of contract as per Para (vii) of Rule -149 of GFR-2017.

c. Except for direct buying up to Rs. 25,000/- subject to establishing the reasonableness of price, the bidding will be mandatory for procurements above Rs. 25,000/-. As result of bidding, the response could be as under:

  1. Only OEM is available or only single authorised seller is available.
  2. OEM as well as multiple authorised Sellers are available.
  3. Multiple authorised Sellers of the OEM are available.

d. After bidding, under PAC buying, the Buyer may take decision with the approval of the competent authority to process the procurement subject to establishing the reasonableness of prices before placement of contract as per Para (vii) of Rule – 149 of GFR-2017

Author:  Harsshita Pothiraj (intern), a 3rd Year student of University School of Law & Legal Studies (GGSIPU), New Delhi, and Sudhansu Sahoo, Legal Associate, at Khurana & Khurana, Advocates and IP Attorneys.  In case of any queries please contact/write back to us at sudhanshu@khuranaandkhurana.com.

References:

[2] Procurement- Purchase of Proprietary Items- Circular- Reg., Circular Date: 23/04/2013 https://www.imu.edu.in//images/Proprietary%20Items.pdf (Page No.2-3)

[3] id

[4] General Financial Rules, 2017 https://doe.gov.in/sites/default/files/GFR2017_0.pdf (Page No. 48)

[5]Supra note 2

[6]id

Leave a Reply

Archives

  • October 2021
  • September 2021
  • August 2021
  • July 2021
  • June 2021
  • May 2021
  • April 2021
  • March 2021
  • February 2021
  • January 2021
  • December 2020
  • November 2020
  • October 2020
  • September 2020
  • August 2020
  • July 2020
  • June 2020
  • May 2020
  • April 2020
  • March 2020
  • February 2020
  • January 2020
  • December 2019
  • November 2019
  • October 2019
  • September 2019
  • August 2019
  • July 2019
  • June 2019
  • May 2019
  • April 2019
  • March 2019
  • February 2019
  • January 2019
  • December 2018
  • November 2018
  • October 2018
  • September 2018
  • August 2018
  • July 2018
  • June 2018
  • May 2018
  • April 2018
  • March 2018
  • February 2018
  • January 2018
  • December 2017
  • November 2017
  • September 2017
  • August 2017
  • July 2017
  • June 2017
  • May 2017
  • April 2017
  • March 2017
  • February 2017
  • January 2017
  • December 2016
  • November 2016
  • October 2016
  • September 2016
  • August 2016
  • July 2016
  • June 2016
  • May 2016
  • April 2016
  • March 2016
  • February 2016
  • January 2016
  • December 2015
  • November 2015
  • October 2015
  • September 2015
  • August 2015
  • July 2015
  • June 2015
  • May 2015
  • April 2015
  • March 2015
  • February 2015
  • January 2015
  • December 2014
  • November 2014
  • October 2014
  • September 2014
  • August 2014
  • July 2014
  • June 2014
  • May 2014
  • April 2014
  • March 2014
  • February 2014
  • January 2014
  • December 2013
  • November 2013
  • October 2013
  • September 2013
  • August 2013
  • July 2013
  • June 2013
  • May 2013
  • April 2013
  • March 2013
  • February 2013
  • January 2013
  • December 2012
  • November 2012
  • September 2012
  • August 2012
  • July 2012
  • June 2012
  • May 2012
  • April 2012
  • March 2012
  • February 2012
  • January 2012
  • December 2011
  • November 2011
  • October 2011
  • September 2011
  • August 2011
  • July 2011
  • June 2011
  • May 2011
  • April 2011
  • March 2011
  • February 2011
  • January 2011
  • December 2010
  • September 2010
  • July 2010
  • June 2010
  • May 2010
  • April 2010