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Monday, 6 February 2012

Disposal of Surplus or Obsolete or Unserviceable Items in Government Offices


 

 Rule 196 Disposals of Goods

 
(i)  An item may be declared surplus or obsolete or unserviceable if the same is of no use to the Ministry or
Department. The reasons for declaring the item surplus or obsolete or unserviceable should be recorded
by the authority competent to purchase the item.

(ii) The competent authority may, at his discretion, constitute a committee at appropriate level to declare
item(s) as surplus or obsolete or unserviceable.

 
(iii) The book value, guiding price and reserved price, which will be required while disposing of the surplus
goods, should also be worked out. In case where it is not possible to work out the book value, the original
purchase price of the goods in question may be utilised. A report of stores for disposal shall be prepared in
Form GFR - 17.

(iv) In case an item becomes unserviceable due to negligence, fraud or mischief on the part of a Government
servant, responsibility for the same should be fixed.

 
Rule 197 Modes of Disposal

(i) Surplus or obsolete or unserviceable goods of assessed residual value above Rupees Two Lakh should be
disposed of by :

a) Obtaining bids through advertised tender or

b) Public auction.

(ii) For surplus or obsolete or unserviceable goods with residual value less than Rupees Two Lakh, the mode
of disposal will be determined by the competent authority, keeping in view the necessity to avoid accumulation
of such goods and consequential blockage of space and, also, deterioration in value of goods to be disposed
of.


(iii) Certain surplus or obsolete or unserviceable goods such as expired medicines, food grain, ammunition
etc., which are hazardous or unfit for human consumption, should be disposed of or destroyed immediately
by adopting suitable mode so as to avoid any health hazard and/or environmental pollution and also the
possibility of misuse of such goods.

 
(iv) Surplus or obsolete or unserviceable goods, equipment and documents, which involve security concerns
(e.g. currency, negotiable instruments, receipt books, stamps, security press etc.) should be disposed of/
destroyed in an appropriate manner to ensure compliance with rules relating to official secrets as well as
financial prudence.

Rule 198 Disposals through Advertised Tender

 
(i) The broad steps to be adopted for this purpose are as follows:

 
a) Preparation of bidding documents.

b) Invitation of tender for the surplus goods to be sold.
c) Opening of bids.

d) Analysis and evaluation of bids received.

e) Selection of highest responsive bidder.
f) Collection of sale value from the selected bidder.

g) Issue of sale release order to the selected bidder.
h) Release of the sold surplus goods to the selected bidder.

i) Return of bid security to the unsuccessful bidders

 
(ii) The important aspects to be kept in view while disposing the goods through advertised tender are as
under:-

 
(a) The basic principle for sale of such goods through advertised tender is ensuring transparency,
              competition, fairness and elimination of discretion. Wide publicity should be ensured of the sale plan
              and the goods to be sold. All the required terms and conditions of sale are to be incorporated in the
              bidding document comprehensively in plain and simple language. Applicability of taxes, as relevant,
              should be clearly stated in the document.

 
(b) The bidding document should also indicate the location and present condition of the goods to be sold so
 that the bidders can inspect the goods before bidding.


(c) The bidders should be asked to furnish bid security along with their bids. The amount of bid security
              should ordinarily be ten per cent. of the assessed or reserved price of the goods. The exact bid security
amount should be indicated in the bidding document.

 
(d) The bid of the highest acceptable responsive bidder should normally be accepted. However, if the price offered by that bidder is not acceptable, negotiation may be held only with that bidder. In case such negotiation does not provide the desired result, the reasonable or acceptable price may be counteroffered to the next highest responsive bidder(s).


(e) In case the total quantity to be disposed of cannot be taken up by the highest acceptable bidder, the remaining quantity may be offered to the next higher bidder(s) at the price offered by the highest
              acceptable bidder.


(f) Full payment, i.e. the residual amount after adjusting the bid security should be obtained from the
              successful bidder before releasing the goods.


              (g) In case the selected bidder does not show interest in lifting the goods, the bid security should be
              forfeited and other actions initiated including re-sale of the goods in question at the risk and cost of the
              defaulter, after obtaining legal advice.

(iii) Late bids i.e. bids received after the specified date and time of receipt should not to be considered.

Rule 199 Disposals through Auction

(i) A Ministry or Department may undertake auction of goods to be disposed of either directly or through
approved auctioneers.


(ii) The basic principles to be followed here are similar to those applicable for disposal through advertised
tender so as to ensure transparency, competition, fairness and elimination of discretion. The auction plan
including details of the goods to be auctioned and their location, applicable terms and conditions of the sale
etc. should be given wide publicity in the same manner as is done in case of advertised tender.

(iii) While starting the auction process, the condition and location of the goods to be auctioned, applicable
terms and conditions of sale etc., (as already indicated earlier while giving vide publicity for the same),
should be announced again for the benefit of the assembled bidders.

(iv) During the auction process, acceptance or rejection of a bid should be announced immediately on the
stroke of the hammer. If a bid is accepted, earnest money (not less than twenty-five per cent. of the bid
value) should immediately be taken on the spot from the successful bidder either in cash or in the form of
Deposit-at-Call-Receipt (DACR), drawn in favour of the Ministry or Department selling the goods. The
goods should be handed over to the successful bidder only after receiving the balance payment.


(v) The composition of the auction team will be decided by the competent authority. The team should however
include an officer of the Internal Finance Wing of the department.

Rule 200 Disposal at scrap value or by other modes


If a Ministry or Department is unable to sell any surplus or

Obsolete or unserviceable item in spite of its attempts through advertised tender or auction, it may dispose off the same at its scrap value with the approval of the competent authority in consultation with Finance division. In case the Ministry or Department is unable to sell the item even at its scrap value, it may adopt any other mode of disposal including destruction of the item in an eco-friendly manner.


 
Rule 201. A sale account should be prepared for goods disposed of in Form GFR 18 duly signed by the officer who supervised the sale or auction.


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