(Short title : INSCOCSA-96)

Definitions

1. The ‘Purchaser’ is the President of India acting through the authority issuing the purchase order.
2. The ‘Supplier’ is the party, which contracts to supply goods and services. The term includes his employees and agents.
3. The ‘Consignee’ is the authority specified in the contract to whom supplies are to be delivered.
4. The ‘Inspector’ is the authority designated in the contract to assure the quality of the item contracted for.

Application

5. These standard conditions of contract (SCOC) shall apply to all contracts concluded by the Director of Procurement, Indian Navy or his representatives. The terms contained in the SCOC may be modified by the contract concluding authority to the extent state in the tender enquiry or in the acceptance of tender.

Tender

6. The Purchaser may reject a tender without assigning reason.
7. The Purchaser may not accept the lowest tender.

Contract

8. The contract shall seem to have been concluded by the ‘acceptance of tender’ issued in the form of a purchase order. The acceptance may be communicated to the Supplier by fax or registered/speed post. The Supplier is required to acknowledge receipt of the acceptance within 7 days. However, non-acknowledgement on the part of the Supplier does not affect the ‘acceptance of tender’ or the conclusion of contract.

9. All communications by the Purchaser to the Supplier will be deemed to have been made if sent by fax, telex or registered/speed post to the number or address furnishes by the Supplier.

10. The Supplier shall not alienate his rights and responsibilities under the contract to any one.

11. The Purchaser shall not be liable for any obligation, monetary or otherwise, that has not been expressly stated in the contract.

12. The Supplier shall deem to have indemnified the Purchaser against all claims by third parties relating to the contract, including but not limited to intellectual property rights.

13. The Supplier shall not disclose any information provided to him by the Purchaser except to the extent required to execute the contract.

Specifications

14. The specifications governing the item to be supplied will be provided with the tender enquiry. A quote received against a tender enquiry shall be deemed to commit the Supplier to those specifications, unless explicitly stated otherwise in the quote.

15. Where an aspect is not covered in the specifications, the Supplier shall be required to confirm to the highest quality standards that he had provided in the past to the Purchaser or to any other buyer.

16. The specifications contained in the tender enquiry may be modified, by mutual consent, before the contract is accepted.

Price

17. When quoting against a tender enquiry all components of the price such as the basic price and different types of taxes and charges shall be listed separately. Where ‘rates’ are applicable, they shall be explained clearly.

18. Prices quoted in the tender shall be fixed. In exceptional circumstances, where a price variation clause becomes unavoidable, the conditionality of price variation must be explicitly stated.

19. The Purchaser shall not be liable for any payment that has not been included in the tender.

20. The Supplier should quote to the Purchaser the lowest price at which he is supplying the item of similar quality to other buyers.

Third Party Approvals

21. The Supplier shall be responsible for obtaining all approvals, from third party authorities required to execute the contract till the point the item is delivered at the purchaser’s premises.

Inspection

22. Normally an item will be accepted on the warranty of the Supplier. Such warranty shall be valid for a period of 12 months from the date the consignment is received at the consignee’s premises

23. In case the contract specifies pre-despatch inspection, the inspection will be arranged by the Purchaser. The inspection may be in stages if so stipulated. The decision of the Inspector with regard to when, how and where the inspections carried out shall be binding on the Supplier. The Supplier shall provide the Inspector all facilities including testing equipment. The Supplier shall have no claim on the Purchaser on matters arising out of inspection.

Packing

24. It shall be the Supplier’s responsibility to so pack the consignment that it arrives undamaged at the consignee’s premises. The stores should be properly preserved before packing. Each package must contain a packing note, listing the contents in detail. Consignment must be palletized.

Delivery Documents

25. As soon as a consignment is despatched, the Supplier should forward to the Purchaser copies of all documents concerning delivery and payment, by speed post or courier. This is in addition to dispatching such documents to the bank for payment through letter of credit.

Delivery

26. The consignment will be shipped FOB, by sea or air, through the forwarding agent nominated by the Purchaser. The Supplier should give at least 6 weeks notice, with regard to the readiness of the consignment, to the Purchaser’s agent under intimation to the Purchaser. All expenses up to the point of delivery on board the nominated ship or aircraft shall be borne by the Supplier. INCOTERMS 1990, as amended from time to tie shall apply.

27. The date of the bill of lading or airway bill will be considered as the actual date of delivery with reference to the stipulated date of delivery in the contract.

Consignee’s Right of Rejection

28. Notwithstanding the fact that an item may have been inspected prior to the despatch, the consignee will have the right to reject it, in whole or part, if it is observed that the item supplied does not conform to the specifications or has been damaged. Such rejection shall be communicated to the Supplier with in 90 days of the item reaching the consignee’s premises.

29. If an item is rejected, the Supplier is required to replace the rejected item within a period determined by the Supplier, failing which he shall make financial restitution based on the order value. If the Supplier does not remove the rejected item from the Purchaser’s premises with in the period stipulated by the Purchaser, which shall not be less that 45 days, the Supplier shall have no claim on the rejected items and the Purchaser shall be free to dispose the items as he dreams fit.

Payments

30. Payment will be made through Bank transfer within 30 days of receipt of the document provided for in the contract.

31. Alternatively, payment may be made through a letter of credit on production of requisite documents by the Supplier. The customs and practices for documentary credit shall be as stipulated in the international Chamber of Commerce publication 500/93, as amended from time to time.

Liquidated Damages

32. In the event of the Supplier’s failure to deliver on time, the Purchaser, at his sole discretion, and not by way of penalty, may deduct from the payment of 1% of the contracted price of the undelivered stores for each month or part thereof till the item is delivered, subject to a maximum of 5% of the price of the stores not delivered on time.

Warranty

33. The Supplier is deemed to have guaranteed the Purchaser that the item supplied by him shall continue to conform to the specifications and quality standards prescribed in the contract for a period of 12 months from the date the item has reached the consignee’s premises, not withstanding the fact that the item may have been inspected and accepted.

34. Should the item be found not conforming to the required specifications and quality during the 12 months period, the Supplier shall at the sole discretion of the Purchaser, either replace the item or make full financial restitution. If the item is replaced, the above-mentioned conditions of warranty shall also apply to the replaced item.

Short Closure or Termination

35. The contract may be short closed to terminated, at the discretion of the purchaser, on the following grounds:
a) The Supplier fails to deliver the item as per the delivery date, including the staggered delivery date.
b) Any of the information provided by the Supplier is found to be untrue.
c) The Supplier is found to have attempted to influence any person involved with the contract through unethical means.

Force Majeure

36. Each contracting party shall be excused for the non-performance or delayed performance of his contractual obligation to the extent it is caused by the supervening of Force Majeure, provided that the party so affected notifies the other party immediately. Force Majeure shall cover fire, natural disasters, war, civil strife, strike, sabotage, epidemic and such other occurrences beyond the control of the party. In the event the performance of contract being delayed beyond 60 days for reasons of Force Majeure the Purchaser may terminate the contract without prejudice to either party.

Validity

37. The standard conditions of contract stipulated here under, except to the extent agreed to be modified by the Purchaser, in writing, shall supercede any condition stipulated by the Supplier.

Agents

38. Government of India rules prohibits the engagement of agents, consultants to middlemen in any for while finalizing a contract with a supplier. If it is discovered later that a supplier has engaged any agent, the contract would be liable to be cancelled and/or contract amount reduced by the amount of the commission.

Arbitration

39. In the event of any disputer arising out of there contract, it shall be referred to the sole arbitrator, Secretary, Ministry of Defense, Govt if India or his nominee. The award of the arbitrator shall be final and binding on both parties to the contract.

Law

40. The contract shall be governed by the Laws of India. The contract shall be deemed to have been made at the place from where the purchase order is issued and only the courts of that place shall have the jurisdiction to decide on any dispute arising out of the contract