Suppliers shouldn't pay inspecting officials' bills: FinMin to ministries

Suppliers and vendors should be "discouraged" from paying for the travel, stay, hospitality and other expenses of inspecting officials whose primary job is to ensure standards are maintained in these firms, says a letter from the finance ministry to all Union ministries.

The letter, sent on October 24 by the finance ministry to secretaries and financial advisers of all central ministries and departments, says such a provision risks the independence of inspection teams which among other things determine if firms are following standards or not.

In the letter, the finance ministry says that it has been brought to its notice that contracts signed with suppliers by some ministries and departments have clauses of pre-inspection at the firm's premises, where there is a provision that the suppliers or the vendors will pay for the travel, stay, hospitality and other expenses of the inspecting officials.

"This is not in keeping with need to safeguard the independence of the inspecting teams. Such provisions in contracts need to be discouraged, so that inspections are not compromised. Necessary steps may be taken to strictly avoid such provisions in the contracts with suppliers and vendors," the letter states.

The railway ministry, which employs perhaps the country's largest number of suppliers and vendors for its various projects, has issued the instruction on November 8 for compliance with the finance ministry's missive.

Inspection teams comprise officials who ensure that the material or goods being procured from the supplier or vendor pass the prescribed quality checks.

These inspections generally include checking of the premises, process control, product control, internal inspection, the source of procurement for raw materials and other details.