Study of E-tendering and procurement management at Delhi tansco Ltd

Study of E-Tendering &
Procurement Management
at Delhi Transco Ltd
Submitted to Presented by
Dr. Mary M Jacintha Ashwani Chaudhary
HoD (MBA (IT)) 00611819917

Objective & Scope of Study
Objective :
 The objective of this project is to study in detail the E-tendering and procurement
management in Delhi Transco Limited and its mapping over SAP.
Scope of Study :
 The Scope of this projects limits to where procurement is done through E-tendering.

Organization Profile
 Delhi Transco Limited, a successor company of erstwhile Delhi Vidyut Board, came
into existence on 1st July 2002, as a State Transmission Utility of the National
Capital. After unbundling of DVB the distribution sector has been handed over to
private companies while the generation and transmission are still with the
government.
 DTL has been responsibly playing its role in establishment, upgrading, operation
and maintaining the EHV (Extra High Voltage) network. It has also been assigned
the responsibility of running the State Load Dispatch Centre (SLDC) which is an
apex body to ensure integrated operations of power system in Delhi.SLDC is
responsible for the real time Load Dispatch function, O&M of SCADA (Supervisory
Control and Data Acquisition) System and Energy Accounting.

 Vision, Mission and Core Values
Vision:
 Global Power in Power Sector
Mission:
 To establish, operate & maintain secure EHV network on sound commercial principal
integrating HRD, R&D, process re-engineering creating intellectual power, maximizing
stakeholder’s delight
Core Values:
 Corporate Ethics,
 Trust & Commitment,
 Learning & Development,
 Result & Excellence,
 Organizational Pride.
Motto:
 “Our Pride: Stakeholder’s Delight”
Goal:
 Sarve Bhavantu Sukhinah: Good to all

Departments
 DTL has dedicated and efficient work force of around 1800 personnel comprising of
all categories of employees. The head of the organization, CMD is assisted by three
full- time Director along with the work force for execution of various obligations of
the company. There are three main wings viz. Human Resources, Finance and
Operations headed by Director (HR), Director (F) & Director (Operation)
respectively and consist of following departments:

Organizational Structure
Organizational Structure

Services offered by Organization
 Delhi Transco Ltd is Transmission Company (TRANSCO) which is unbundled from
Delhi Vidyut Board and is responsible for transmission of Extra High Voltage (EHV)
to the Distribution Companies (DISCOM) which are
 Tata Power Delhi Distribution Ltd. (TPDDL)
 BSES Rajdhani Power Ltd. (BRPL)
 BSES Yamuna Power Ltd. (BYPL)
 New Delhi Municipal Council (NDMC)
 Military Engineering Services Delhi (MES)
 Establishing and maintaining substations at various locations in Delhi for proper
transmission of electricity until now it has set up 4 substation of 400 KV and 35
substation of 220 KV.
 Laying and maintenance of Transmission lines of 400 KV and 220 KV for proper
transmission of electricity and reduce transmission losses.

Customers of Organization
 Delhi Transco Ltd is a Transmission company and its clients are the distribution companies
the DISCOMS which are responsible for providing electricity to the consumer.
 Tata Power Delhi Distribution Ltd. (TPDDL) - Tata Power Delhi Distribution Limited is a joint
venture between Tata Power and the Government of NCT of Delhi with the majority stake being
held by Tata Power Company (51%). It distributes electricity in North & North West parts of
Delhi and serves a populace of 7 million.
 BSES Rajdhani Power Ltd. (BRPL) – A joint venture of Reliance Infrastructure Ltd. and Govt. of
NCT of Delhi with majority stake being held by Reliance Infrastructure Ltd. (51%) and is
responsible for distribution of electricity in in 21 districts across South and West areas of Delhi.
 BSES Yamuna Power Ltd. (BYPL) - A joint venture of Reliance Infrastructure Ltd. and Govt. of
NCT of Delhi with majority stake being held by Reliance Infrastructure Ltd. (51%) and is
responsible the company serves its customer base through 3 Circles (South-East Circle, North-
East Circle and Central Circle).
 Military Engineering Services, Delhi (MES) - The Military Engineer Services (MES) is the premier
construction agency and one of the pillars of Corps of Engineers of the Indian Army which
provides rear line engineering support to the Armed Forces.
 New Delhi Municipal Council (NDMC) – It is responsible for providing electricity to all the
offices either govt. or private, schools, etc. and covers an area of 43.7 km2.

Data Analysis and Interpretation
To understand the E-Tendering process we will look over the various Terminologies used and
Documents alongside the steps involved in E-Tendering.
E-Tender :
 A tender is a formal offer to perform work in return for payment. ’Work’ is the supply of goods
or service or both. Organization who requests for tender are called “Buyers” and organization
who respond to tender requests are called “Suppliers”. An E- Tender is simply putting up that
tender online and receiving bids for that tender electronically on a centralized website.
Types of E-Tender :
Various types of e-tenders which are used in the DTL which are listed below :
 Open Tender : A bidding process that is open to all qualified bidders and where the sealed bids
are opened in public for scrutiny and are chosen on the basis of price and quality. Also called
competitive tender or public tender.

 Limited or Closed Tender: The process of selling a product by inviting a select group of
potential suppliers to provide their lowest written offers by a specified date.
 Single Tender: The process in which only single source of supplier is available then single
tender is addressed to the selected supplier, like in case of OEM maintenance.
 International Competitive Bidding: The process in which the tender process is open to
suppliers having company registered outside India.
 Expression of Interest (EOI): An EOI is an invitation process involving the marketplace, to
provide information to the company of their potential and ability. This process may in turn
lead to a tender process or directly to a negotiation with one or several preferred suppliers.

E- Tendering Process :
The Tendering process can be divided into six stages. These stages are as shown below:
 Stage I: Preparation of Requisition : Understanding the need of the requirement raised, or works
to be done. Deciding on the budget to be allocated to the project, Deciding about the time limit
and creating a project management plan.

Whenever requirement arise for procurement of any goods or service in any department a
purchase requisition is created on the SAP system using the Transaction Code (ME51N).
Login Screen of SAP

 Stage II : Approval of Tender : Discussion and decision on the type of tender to be used on the
basis of the type of need, deciding about the EMD and Tender Fee. Deciding on award criteria
whether L1 or H1. Deciding on the number of covers, form of contract and obtaining digital
certificates, generation of password, defining of server clock, tender schedule and timeline
of downloading, uploading, and opening of bids.
Covers :
Covers in Tender means the number of envelope in which you have to submit your bids for the
tender titling first cover as “Fee/PreQual/Technical” containing information about EMD and
other document and second cover as “Finance” means the Price Bid.
Earnest Money Deposit (EMD) :
Earnest Money Deposit is a kind of security deposit taken by the tender floating organization
so that a bidder does not submit a dummy bid, it is charged so that only people who are
serious in doing work will apply to tender. It usually takes up to 5 % of the tender value. It is
kept with the organization in form of DD or Banker’s Cheque and is never en-cashed.

Approval is mapped over the SAP using Release Strategy. Release strategy means approving
the document for processing further by the authority with the power of controlling the
procurement process. It is a fall-safe option included in SAP in order to keep check that
people who are not authorized to raise procurement requisition doesn’t do so and are kept in
check. Release strategy is invoked using the Business Workflow where the authority receive
the requisition for his/her approval
Purchase Requisition Release Strategy Screen

 Stage III : Preparation of Tender Documents : After getting the requisition approved the
request is forwarded to the DGM (T) M&S or DGM (T) Contracts under the Contracts and
Material Management (C&MM) department through proper communication channel and the
tender is created and uploaded along with the relevant documents on the websites. There are
various type of tender documents generated during issue of tender, some of which are
explained below:
1. Pre-Qualification/Qualification Requirement : These documents shall contain eligibility
criteria, detailed evaluation criteria for assessment of capabilities of Tenderers and the
Performa for submission of details/documents required for assessment of eligibility / detailed
evaluation.
2. Instruction To Tenderers (ITT) : This document contain instruction for the bidders as to how
to apply for tenders, fill in the details, whether the tender fee and EMD are to be submitted
in person or online, details about the pre-bid meeting.

3. General Conditions of Contract (GCC) – It is a document containing information regarding the
various terminology used in the contracts, the obligations of the party awarded tenders,
conditions under which contract will be terminated, conditions regarding payment,
jurisdiction conditions for settling dispute and other conditions.
4. Special Conditions of Contract (SCC) – It is a contract which is applicable only for the current
project it is prepared for and has conditions vary from GCC to accommodate any changes or
special demand the project requires.
5. Technical Specification - The technical specification is the most important section of the
tender document, both for the procuring organization as well as for the bidders, since it is
the specification which sets out precisely what characteristics are required from the
materials, plant and equipment, services, or site activities being sought by the procuring
organization.
Sample Technical Specification

6. Technical Deviation : It is a document which specifies the deviation from the technical
conditions mentioned in the technical specification document for reasons as need of the
project or maybe a better technology is available with the tenderer.
7. Deviation from GCC : This is a document which specifies the deviation from the general
condition of contract maybe due to the nature of the work or of any other arrangement
between the procuring organization and tenderer.
8. Bill of Quantity (BoQ) : Bill of Quantity is a document which contains the details of all the
materials being supplied along with their quantity and the rate of each item filled by the
tenderer. The Bill of Quantities is used to calculate the Contract Price. The tendered shall be
paid for the quantity of the item supplied at the rate in the Bill of Quantities for each item.
Sample of Bill of Quantity

 Stage IV : Invitation of Tender : In this process the tender is published electronically on
website inviting the parties who are registered on the website to participate in the tender
process electronically, submission of bids online along with uploading relevant documents and
payment of Tender fee and EMD online or offline as required.
Delhi Govt. E-Procurement Website

 Stage V : Tender Evaluation : Checking tenders received in proper format with all the
documents required. Opening of the bids according to the bid system i.e. Single Part Bid or
Two Part Bid starting with EMD, Qualifying Requirement, Technical and then Price bid to find
the L1/H1 bidder as per case. Eliminating informal and incorrect bids. The bid system is of
two type :
Single Part Bid : In single bid system the techno-commercial bid and price bid are opened
together at the same time and then the L1 is selected from them.
Double Part Bid : In double part bid system first the techno-commercial bid is opened first
and only those vendors price bid will be opened whose techno-commercial capability is found
at par of company requirement and L1 is selected from them.

 Stage VI : Award Contract : The bidder selected in the processing of the tender will be awarded
the contract after pre-bid meeting where signing of rate contract is done to bide the bidder for
a fixed rate on the procuring item until the contract is not void or end. A Letter of Acceptance
may be issued as confirmation of awarding of tender to the bidder. Awarding of contract is
mapped over SAP as shown below.
Create Request for Quotation (RFQ): After opening of tender a Request for Quotation is created
against the Purchase Requisition using the Transaction Code (ME41) for the vendors who has
been found the L1 bidder in the tender.
RFQ creation screen

The “RFQ Date” is the opening date of the E-Tender on the website when the tender will be
available to be downloaded and submit quotations against it & “Quotation Deadline” is the
last date of submission of quotation against the E-Tender.
The “Collective Number” mentioned above is the Tender No of the tender published on the
procurement website.

Create vendor in SAP : The Vendor who has been selected as the L1 against the tender
floated if his data is already maintained in the organization SAP system then we move on to
creating Purchase Order against that vendor else we create the vendor in the organization
SAP system using the Transaction Code (FK01).
Vendor Details Display after Creation

Create Purchase Order : After selecting the proper vendor using the E – Tendering process a
purchase order is to be created against the vendor in the SAP system using the Transaction
Code (ME21N).
Purchase Order Creation Screen

Purchase Order Created Confirmation

Purchase Order Release Strategy : Release strategy means approving the document for
processing further by the authority with the power of controlling the procurement process.
It is a fall-safe option included in SAP in order to keep check that people who are not
authorized to raise procurement requisition doesn’t do so and are kept in check. Release
strategy is invoked using the Transaction Code (ME51N).
Purchase Order Release Strategy

Goods Movement : When the vendor supply us with the goods for which the whole procurement
process was invoked to update those goods into stock inventory it is done in the SAP system
using Transaction Code (MIGO).
Goods receipt creation screen

Service Entry Sheet : Service Entry Sheet is used to make entry for the services availed by the
vendor maybe like installation of transformer or maintenance which cannot be inventoried.
The service entry sheet is created in the SAP system using the Transaction Code (ML81N).
Service Entry Sheet Creation Screen

Parking Invoice : After entering all the details in the service entry sheet and updating the
stock after checking it properly the final step is to create invoice and park it so that the
financial department can clear it and settle the payment of the vendor. Parking of invoice in
the SAP system is done by using the Transaction Code (MIR7).
Parking Invoice Screen

Simulated Invoice containing total price and tax code

Conclusion
 From the study conducted at the Delhi Transco Ltd to understand their
procurement process through E-Tendering and how SAP is utilized to ease up
that process after studying the whole process the following conclusion can be
drawn :
 ERP system has helped in interconnecting the different department of Delhi
Transco Ltd and helped in creating a seamless communication between them.
 Use of E-Tendering process has helped the Delhi Transco Ltd. achieve the Govt.
objective of going digital for all procurement process and currently running 80-90%
of its Tendering procedures online.
 E-Tendering has helped in increasing the scope of the potential vendors for the
organization as International Competitive Bidding is possible only because of E-
Tendering.
 E-Procurement website run by the Govt. has also resulted in ease of doing business
as the people have to deal with less paperwork and can apply to various tenders of
various organizations under one central, synchronized & real-time running website.

Recommendation
 After closely studying the processes being followed at the Delhi Transco Ltd.
for the E-Tendering and procurement process the following recommendations
are suggested to the organization.
 The Quotation maintenance for all the vendors who have applied to the E-Tender is
not done in the SAP system so recommended to use that functionality of the SAP
system.
 Recommended to use the price comparison feature (ME49) available in SAP system
to select the L1 vendor.

Limitations
 The data of tender is private to the organization so access to bids and other
tender document was not available.
 Procurement data and the other tender documents are only available to the
bidders who are registered to the e-procurement website.

References
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0of%20indian%20power%20sector.html
[3] DTL ERP/IT Department, Retrieved From: http://www.dtl.gov.in/Content/23_1_ProjectOjas.aspx
[4] Leon, Alexis. 2014. Enterprise Resource Planning. Chennai: McGraw Hill Education (India) Private
Limited
[5] Madanhire, Ignatio and Charles Mbohwa. 2016. “Enterprise Resource Planning (ERP) in Improving
Operational Efficiency: Case Study.” Procedia CIRP 40:225–29. , Retrieved From :
https://doi.org/10.1016/j.procir.2016.01.108
[6] Uwizeyemungu, Sylvestre & Raymond, Louis. (2012). “Essential characteristics of an ERP system:
Conceptualization and operationalization.” Journal of Information and Organizational Sciences.
29. 69-81. Retrieved From:
https://www.researchgate.net/publication/286331820_Essential_characteristics_of_an_ERP_syst
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[7] Shang, Shari and Seddon, Peter B., "A Comprehensive Framework for Classifying the Benefits of
ERP Systems" (2000). AMCIS 2000 Proceedings. 39. Retrieved From:
https://aisel.aisnet.org/amcis2000/39
[8] Yılmaz, Yucel and Ozcan Gurkan., "Implementing ERP-systems with accelerated ERP more
efficient and quickly – a best practice" (2011).Journal of Systems Integration, Vol 2, No 3.
Retrieved From : http://dx.doi.org/10.20470/jsi.v2i3.97

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