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Systemic Improvement in Procurement Process

Systemic Improvement in Procurement Process

16.0 Brief Introduction:

A study was carried out on the time taken for from raising a Procurement Requisition (PR) till placement of order (PO) and the reasons for delays. Accordingly, all commercial departments were asked to forward the details of time taken from release of PR to release of PO in respect of PO/WO/Contracts of Rs 50 lakhs & above for the last three years.

16.1 Background:

During the study 490 cases of orders having Value of Rs. 50 Lakhs and above, received from various purchase departments of MDL, were referred. The time taken to convert a PR in to PO was varying from less than 3 months to more than a year. There were 63 PO that took more than a year to get finalized.

The procurement cycle consists of four major stages i.e. PR to Tender, Tendering Period, Tender opening Technical Clearance and Price bid opening to Placement of order. On detailed scrutiny, it was observed that in most of the cases, where the equipments are procured from customer nominated source (most of the cases single nomination) and are of high to very high value orders, the involvement of customer in technical scrutiny & price negotiations essentially takes much time and also necessitate several rounds of PNC with the firms. However, with respect to equipments where there is no customer involvement during technical scrutiny & price negotiations, delays happened mainly due to unforeseen reasons emerged during the course of tender evaluations.

A separate study for delay in technical clearance were carried out. It has been noticed that for some orders below Rs 50 Lakhs without customer involvement, technical scrutiny took much more time resulting delay in placement of orders. This type of delay could definitely be avoided/expedited being in MDL control.

16.2 Implementation:

In order to reduce the procurement lead time, following directives have been issued.

(i) Timeline for technical scrutiny of bids should be normally not more than 3 weeks. Exceptional cases, where more time is required for technical scrutiny, it should be brought to the notice of Functional Director along with justification by TNC.

(ii) Minutes of TNC, CNC and PNC meetings should be signed by all members on the same day. In case of involvement of IHQ/DND representative, these minutes should be signed within two weeks.

(iii) Weekly review meetings shall be held for high value orders by HOD(SB-C): (Above Rs. 5 Crore) & HOD (Commercial): Up to Rs. 5 Crore. These reports shall be submitted to D(S) on fortnightly basis and to CMD on monthly basis.

16.3 Impact and Benefits:

With the periodic review, control and monitoring and accountability to adhere to the timelines. The delay in procurement is minimized.


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  • Mazagon Dock Shipbuilders Limited,
    Dockyard Road, Mazagon,
    Mumbai - 400 010,
    Maharashtra, India.
  • Telephone No.:
    Board: +91 - 2376 2000, 2376 3000,
    2376 4000

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