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Procurement of items on PAC basis

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Procurement of items on PAC basis

Sub: Procurement of items on PAC basis

Ref: Audit Para No. 5,1 for the year 2025 -12

Reference above, audit has pointed out that in some cases of procurement of PAC items involving advance payment against proforma invoice, delay/short receipt are noticed. Therefore, steps should be taken, if not already there, to ensure the timely and full supply of material against P.l. payment cases.

(Santosh Mittal)
Dy. Director, Rly. Stores(G)I
Railway Board,

Click below link to view the Original order

Procurement_110814

When procurement in Indian Railways is carried out on a PAC basis, it refers to purchases made under a Proprietary Article Certificate (PAC)—that is, items available from a single source only. Here’s how that works:

1. What is PAC-Based Procurement?

A PAC (Proprietary Article Certificate) is mandated when procuring non-stock items from a sole supplier. This occurs when no alternate vendors manufacture a similar item. Indents must be supported by either a PAC or solid justification for a single-source purchase.

2. Who Signs the PAC?

The consuming (user) department is responsible for signing the PAC. However, the authorizing officer varies with the item’s estimated value. The thresholds are:

  • Indenting Officer: up to ₹25,000
  • JAG/Selection Grade Officer: up to ₹75,000
  • SAG Officer: up to ₹3 lakhs
  • PHOD/CHOD of the User Department: above ₹3 lakhs

3. What Happens Next?

  • Stores Officers (e.g., COS, CMM, Dy.CMM) can place purchase orders against such single-source tenders—but their spending powers depend on the PAC status:
    • With a PAC Certified item, authority limits vary:
      • COS up to ₹5 lakh
      • CMM up to ₹3 lakh
      • Dy.CMM up to ₹2 lakh
      • SMM up to ₹1 lakh
      • AMM up to ₹50,000
    • Without valid PAC certification, such purchases should not proceed via single tender.

4. Oversight & Periodic Review

  • PAC procurements are monitored for fairness; pressure to resort to PAC vs. open tendering is discouraged.
  • Railways are required to publish PAC purchase details every six months. If an item is regularly needed, departments are encouraged to convert it into a stock item.
  • According to audit data (2007–12), PAC purchases formed only about 2.3% of procurement by value, but a significant share comprised “other than safety/vital” items, raising concerns over misuse.

Summary Table

Step Action
1 User department must certify PAC when single-source procurement is justified.
2 Appropriate authority signs PAC based on value slab.
3 Stores Officers issue single-tender procurement within their delegated powers.
4 Regular PAC items should be stock-listed; all PAC procurements should be disclosed biannually.

Let me know if you’d like officer-level delegation charts, differences between PAC types (e.g., PAC-a/c), or how PAC rules vary for emergency purchases—I’m happy to assist further!

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