SubContInstnRev 3

Procedure for Sub-Contracting of Tooling, Components & Assemblies
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Issue date: 12 Nov 2009

PROCEDURE FOR OUTSOURCING/ SUB-CONTRACTING OF
TOOLING,COMPONENTS AND ASSEMBLIES
Policy

1. In the fulfillment of their mission and goals, the Divisions shall consider outsourcing of its
workload where such outsourcing could improve efficiency and effectiveness and allow
the Divisions to dedicate itself to its core mission of meeting the annual production
targets.

2. The Divisions will undertake outsourcing with care and due diligence. Proposals to
outsource will include a cost benefit analysis that takes into account both economic and
technical factors.

3. Full utilization of available facilities/ Capacities shall remain the guiding principle for
any outsourcing decisions.

4. Outsourcing may be resorted for any of the following reasons:
a) Lack of internal capacity for the outsourced work
b) Lack of time to complete the task
c) Non-availability of Facilities for the intended Outsource work
d) Savings in cost
e) Reduction in cycle time of the final product
f) Any other reasons, to be recorded.

Market Exploration and Registration of Sub-Contractor/s & Service provider/s

5. In case of work, for which sub-contractors/Service providers are not already registered
with the Divisions, or in case of additional work, where adequate number of Sub-
Contractors/Service providers are not registered, Divisions shall carry out intensive
market survey. For this purpose, the requirements shall be put up on HAL website in
detail. Further, if considered necessary, Vendor Directory of similar industry within MoD
may be referred. Further, press advertisements, if necessary, may be issued as laid
down in Purchase Manual, for issue of open tenders.

6. Vendors desirous of registering shall be issued with an application form for registration
as Sub-Contractor/Service providers. Copy of the Draft application format is placed at
Annexure-I & II. Application form shall also be made available on HAL Web Site for
intending Sub-contractors/Service providers to download and apply. The advertisement /
invitation to register must clearly specify the department / agency, to which the
application forms need to be submitted.

7. Vendors, who seek registration on their own, may be asked to provide information in the
prescribed application form (Annx 1 & II) and considered for registration.

8. Application forms complete in all respects and received by the Division shall be
evaluated by a Committee nominated by Divisional Head for the purpose, consisting
members from appropriate technical disciplines, Quality Control Dept., head of
Outsourcing & Finance or their authorized representatives. Divisions will ensure that, for
registration of Sub-Contractors/Service providers, complete information as per the
prescribed format is insisted upon and is obtained.

9. After preliminary screening of the applications received from intending Sub-
Contractors/Service providers, the Committee may visit the vendors works/Tier-II
suppliers works of Service providers, if considered necessary, for better assessment of
their technical capabilities and financial strength / standing before registration. In the
case of assessment of Sub-Contractors/Service providers for the manufacture of

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airborne/ aeronautical standard components / assemblies, it is suggested to include
CRI/DGAQA representative also in the Committee visiting the vendors works. The
Committee shall evaluate the intending Sub-Contractors/Service providers for
registration considering the following criteria:

For sub-contractors:
Facilities available with the sub-contractors for manufacture of tools, components
and assemblies
Experience of the sub-contractors in the manufacture of tools, components &
assemblies etc.
Past performance of the sub-contractors if registered / dealt with previously.
Adequacy of systems and procedures
Elimination of sub-contractors who do not have their own main facilities for the
intended job
Elimination of vendors not conforming to quality standards (based on past
performance).
Financial Standing
Profile of customers; if required feedback regarding subcontractors performance
/ credibility may be obtained directly from the customers.
After sales organization & depth of service

Engagement of service provider:

10. In order to mitigate the difficulty of continuous follow up and monitoring the vendor
spread across the country and also for efficient project management and scheduling
activities which are necessary to avoid delays in execution / completion of contract/
orders, it may become necessary to engage the services of a Service Provider.

11. The service providers will act as Tier-I suppliers between HAL and their Tier-II Suppliers /
manufacturing entities. The scope of Service Providers to include:
Identification of competent manufacturing sources.
Development of potential vendors.
Overseeing and monitoring of contracts
Project management
Approvals/implementation of quality plan / process plan etc.
Responsibility for safe custody of Materials / Tools supplied by HAL.
Compliance with applicable regulations involved in manufacture of products.
Responsibility for certifying product quality.
Value addition to HAL in (a) Effective Supply Chain Management & (b) Inventory
reduction to HAL

12. Service Providers (viz. Tier-I suppliers) should arrange to provide details from Tier-II
suppliers as per the format enclosed at Annexure-I. Service Provider should also arrange
to provide updated details of Tire-II suppliers periodically which include additions /
deletions as per the format enclosed at Annexure-1. The registration of the Service
Provider to be done only after assessing (i) the existence of the quality system with the
Service Provider to monitor the performance & also the internal approval process of their
Tire-II suppliers (sub-contractors) which are acceptable to HAL quality requirements and
(ii) the capabilities of their Tier-II suppliers(sub-contractors). The Service Providers will
compete with other registered Sub-Contractors.

Selection of service provider:

13. The criteria to asses the capability of Service Providers at the time of registration should
take into the account the following aspects:

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Capability of the Service Providers to manage a reasonable number of Sub-
contractors
Experience of the Service Providers in the area of tooling/machining of aircraft
components, sound technical knowledge on Material specifications & understand
the technical drawings of both component level and Assembly level.
Availability of Quality System for approval and monitoring performance of their
Tire-II suppliers.
The business agreements entered into by the Service Providers with the Sub-
Contractors covering the various works e.g Machining, CNC machining, Turning,
boring, Heat treatment etc. to offer to HAL a finished components in conformity
with the quality standards.
Availability of adequate resources in terms of manpower and facilities for project
management/monitoring of contracts/implementation of plans, technical
guidance, product quality assurance, logistics.
The spareable capacity of the Tier-II suppliers of the Service Providers.
The financial strength of the Service Providers
Should have demonstrated his ability to integrate and co-ordinate among vendors
as Cluster leader
Firm / Corporate entity who have their own manufacturing facility or group of their
own companies having similar or different business manufacturing facility or
group of associates working under separate agreements identified as Tire-II
suppliers.

14. The Committee shall also record reasons / justification for the Sub-Contractors/Service
providers rejected/ not considered for registration. The Committee shall categorize the
Sub-Contractors/Service providers according to their capabilities / interest as suppliers of
Cutting tools / Jigs and Fixtures/ Press tools / Ground Handling Equipment or Sheet
metal / Machined (general purpose / CNC) / Nonmetallic components, Sub-Assemblies,
Assemblies etc. The Committee shall make recommendation for registration of the Sub-
Contractors/Service providers as per sample format Annexure - III. Documents used for
registration of Vendors are to be properly maintained for future access & verification. The
process of registration shall be completed in shortest possible time, but in no case, later
than 2 calendar months from date of application. If, for any reasons, such process is
taking longer, the applicant Sub-Contractors/Service providers shall be informed.

15. Divisions need to shortlist 5 10 Sub-Contractors/Service providers for each category of
items to ensure availability of good Sub-Contractors/Service providers base to take the
load and also generate adequate competition. Data collected during registration process
and assessment of Sub-Contractors/Service providers is to be shared with other
Divisions, to avoid duplication of efforts. All the Divisions would exchange the list of short
listed Sub-Contractors/Service providers.

16. A vendor, who has been registered as a Sub-Contractors/Service providers with any of
the Divisions of HAL, shall be considered for registration as approved supplier by other
Divisions for similar / same family of items without resorting to the formality of fresh
application and scrutiny. If necessary, records may be called for from the Divisions who
have registered them. However, if one Division has registered a vendor for tooling and
the other Division intends to sub-contract components, it needs to re-assess the Sub-
Contractors/Service providers for suitability to take up components.

17. Registration of same Sub-Contractors/Service providers for more than one category of
work is acceptable, provided the Sub-Contractor/Service providers has adequate
capacity and capability to take up work.

18. As and when a Sub-Contractors/Service providers informs the Divisions with regard to
any material change in the information declared by him at the time of registration, the
Divisions shall note such changes and update the records with a view to decide whether

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the Sub-Contractors/Service providers can be entrusted with further subcontract work or
otherwise. Notwithstanding voluntarily disclosure, i,e the Divisions need to ascertain any
material changes to the information, declared by the Sub-Contractors/Service providers
at the time of registration, at least once in six months and update the records accordingly
and share the information with other Divisions.

Directory of Sub-Contractors/Service Providers

19. The respective Division / Office shall maintain a directory of Sub-Contractors/Service
providers registered by them. The directory shall be updated at least once in a year with
appropriate additions / deletions depending upon performance of the registered Sub-
Contractors/Service providers and new registrations done by the Division.

20. For the purpose of a consolidated Directory of Sub-Contractors/Service providers, the
Divisions shall forward their directory in soft copy by 31st December of each year to IMM
at Corporate Office for consolidation and issue of a companywide directory till a system
is put in place, whereby Divisions shall access and update a common Vendor Directory
on HAL LAN/ WAN system.

21. Divisions shall issue enquiries / RFQs to currently registered Sub-Contractors/Service
providers only.

Sub-Contractor Rating/Service Providers Marketing:

22. A Performance Evaluation Committee shall rate the registered Sub-Contractors/Service
providers, category-wise at least once in a year on their performance on the previous
supplies. The responsibility of Sub-Contractors/Service providers rating will rest with
Head of Sub-Contracting Group of the Division. A Committee comprising of Members
from appropriate Technical disciplines (Tool Engineering, Production Engineering,
Production and Quality etc.), Head of Sub-Contracting Group and Finance or their
authorized representative will review Sub-Contractors/Service providers performance
based on quality, price and delivery. The Committee shall rate the performance level of
each Sub-Contractors/Service providers on a scale of 100 on cumulative basis
considering weightage for each criterion as follows:

Quality assessed for 50 marks based on the formula

No. of Items accepted without re-work X 50
Total No. of Items received

Delivery of Items assessed for 30 marks based on the formula

No. of Items received in time X 30
Total No. of Items received.

Price is assessed for 20 marks based on the formula

1 - Sub-Contractor/Service provider Unit Cost X 20
HAL estimated cost X 20

Weightage on price shall at the minimum be zero and not negative.

23. Sub-Contractors/Service providers should be classified as Class-A (performance rating
80% and above), B (performance rating between 60% and 80%), and C (performance
rating less than 60%). The performance rating needs to be communicated to the Sub-

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Contractors/Service providers to give an opportunity for improvement, wherever
warranted. Future enquiries may not be sent, for the same category of items, to a Sub-
Contractors/Service providers falling under Class-C in case of Sub-Contractors and
Class-B & Class-C in case of Service Providers for two immediately preceding years. In
case of a necessity to place orders on a Class-C Sub-Contractors and Class-B Service
providers, the same shall be specifically recorded and performance shall be closely
monitored by the Divisions. This information may also be shared with other Divisions.

24. Further, in case of any adverse reports from Vigilance and others for any breach of
contract, indulgence in malpractice, fraud by the Sub-Contractors/Service providers, the
Performance Evaluation Committee shall look into the same immediately on receipt of
such reports and take appropriate action. Proper records shall be maintained in support
of such decision.

Procedure for Out-sourcing

25. Outsourcing shall be considered for clearly spelt out reasons. In case the reason is
stated as shortage in capacity, measure of the internal capacity will be based on
available man-hours for the specific work centre. Guidelines for determination of internal
capacity, in a uniform manner across all Divisions, shall be issued separately by
Management Services Deptt., Corporate Office. The guiding principles would be that the
capacity needs to be determined taking into account the availability of machines and the
manning levels in the Division. Further, the OT hours sanctioned, and the higher
efficiency levels attained by the Divisions would also be reckoned for working out the
capacity. Instructions being issued by Management Services Deptt., Corporate Office
shall be followed in this regard.

26. It is to be ensured that full utilization of available facilities / capacities shall remain the
guiding principle for any outsourcing decision. No outsourcing should be resorted to
OEM / proprietary sources. It is to be ensured that outsourcing should result in cost
savings.

Material Sub-contracting Request (MSR):

27. MSR is an authority for outsourcing of tools/components etc. from the Sub-
Contractors/Service providers. Divisions Sub-Contracting Cell shall centrally receive all
MSRs, raised by concerned departments, like Production Engineering / Methods (for
production tasks), Tool Engg / Methods (for tooling requirements) etc. after due approval
. MSR shall indicate drawing number, nomenclature, quantity required and
recommended names of the vendors to whom enquiries are to be sent (from the
approved register) & likely requirement for next 3-5 years alongwith yearwise
requirements. The reason and the necessity for subcontracting the item shall be
recorded on MSR and coordinated by the Facility Planning/ Management Services
department. No estimates of SMH/ Cost shall be indicated on MSR.

28. Man-hours / estimates required to manufacture the tools / components will be assessed
by the management Services / Production Engineering Department in co-ordination with
Finance Deptt. Further, Production Engineering Department shall provide assessment of
materials & the quantity thereof required for executing each item and with indication of
cutting & machining allowances. The estimates, thus prepared, shall be approved by
authority approving the MSR. The Deptt initiating the MSR shall be responsible for
obtaining approval of MSR and shall send the MSR alongwith approved estimates
(placed in confidential cover) to the Sub-Contracting Cell. The confidential cover,
containing the estimates, shall be opened along with the quotes received for the tools /
components to arrive at reasonability of the quotes.

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Competitive Bidding:

29. For the purposes of issuing request for quotations, selection of Sub-Contractors/Service
providers will be done from Directory of registered sub-contractors/Service providers
only.

30. The short listed Sub-Contractors/Service providers will be assessed for adequate
capacity and capability to take up the proposed additional work considering the workload
already available with the vendors and the surplus/spareable capacity available with the
vendor to meet the proposed additional work, in case of order placed on the vendor.

31. In case of Service Providers, the RFQs are to be sent only to Service Providers (Tier-I)
and not to their Sub-Contractors (Tier-II suppliers). In RFQ it should be indicated that
HAL would deal with only Service Providers and not to their Sub-contractors if the orders
are placed on them and it is for the Service Providers to manage their sub contractors to
execute the orders placed on Service Providers.

32. For Tooling, the enquiries / RFQ shall be issued by Outsourcing Group (or the deptt
entrusted for this task by the Division) of the Divisions following Commercial procedures
indicating type of tool and delivery requirement as per sample format (Annexure - IV).
Every RFQ shall have Sub-Contractors/Service Providers registration number. Division
will provide required Tool drawings and other technical details etc. along with the enquiry
to all the Sub-Contractors/Service Providers. Sub-Contractors/Service Providers will be
required to submit their offer indicating price for fabrication of tool including the material.
In cases where HAL needs to give the material for fabrication of tool, the same shall be
clearly indicated in the enquiry and the Sub-Contractors/Service Providers would be
required to quote only for the labour charges. Sealed offers from registered Sub-
Contractors/Service Providers only will be opened following the commercial procedure.

33. Negotiations, if required, may be carried out with L1 Sub-Contractors/Service Providers by
a negotiating committee as per DOP and orders placed, with such terms & conditions as
agreed upon, as per Commercial Procedure

34. Commercial procedure covers Purchase Manual as well as guidelines issued by way of
Materials Management Circulars / CVC guidelines / MoD guidelines etc. issued from time
to time.

35. In case of Components & Assemblies, the registered vendors category-wise may be
officially invited, if considered necessary, to show the drawings / items proposed for sub-
contract, and to explain the important features, requirements, technologies etc. as well
as to clarify technical doubts. Thereafter, enquiry will be issued as per the normal
Commercial procedure. In all cases of sub-contracting of assembly work packages
without exception, and the detailed components, wherever considered necessary, two-
bid system shall be followed.

36. The RFQ should include a projection to the Sub-Contractors/Service Providers on total
number of sets / assemblies planned to be out-sourced over a specified number of years
(say 3-5 years) to enable Sub-Contractors/Service providers quote best price keeping in
view the long term requirement. RFQ may also indicate HALs willingness to enter into a
Long Term Agreement with Sub-Contractors/Service providers on satisfactory
completion of initial orders considering the recurring and non-recurring costs as well as
possible cost reduction due to effect of learning curve.

37. RFQ shall specifically require bidders to reflect the cost benefits in base price accruing
on account of learning, improvement in productivity etc. and indicate corresponding
reduction in base price in the subsequent batches after the initial development batch.

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38. In order to generate adequate competition and a good Sub-Contractors/Service
Providers base, it is suggested to have as many Sub-Contractors/Service Providers as
possible (at least 5 Sub-Contractors/Service Providers). However, Para 7.2 of Annexure
IV of Delegation of Powers, approved by the Board, provides, that where the number of
available sources of supply is less than five, the number of suppliers to be addressed
may be reduced at the discretion of the CFA. Accordingly CFA, based on a recorded
justification, may take a decision.

39. RFQs for sub-contracting must clearly specify, whether BOIs / Raw Material etc. shall be
issued by the Division or the Sub-Contractors/Service Providers is required to arrange
for the same on his own. In the later case, RFQ should stipulate that the cost of BOIs /
Raw Materials / Consumables, to be procured by Sub-Contractors/Service Providers, is
quoted separately and clearly.

40. Offers received from Sub-Contractors/Service Providers will be evaluated and order
processed as per commercial procedures. The offers from the Service Providers shall
indicate the names of their Tier-II suppliers/Sub-Contractors where the job will be
executed. HAL should have the right of entry to inspect / audit the Tire-II suppliers/Sub-
Contractors. It is to be ensured that their Tier-II suppliers/Sub-Contractors of the service
provider are approved at the time of registration of Service Providers by their own quality
system. Any new Tire-II suppliers / sub-contractors included by the service provider at
the time of submitting offer should have been approved by the service provider by their
own quality system. Before placement of Purchase Order, the Tire-II suppliers / sub-
contractors should have been approved as per HAL Quality System.

Purchase Order Placement:

41. Purchase order will be placed on the selected L-1 Sub-Contractors/Service Providers by
the Division in accordance with DoP.

42. General Terms & Conditions of the order are placed at Annexure V, as a guideline.
However, the purchase order must lay down clearly norms of material consumption, if
supplied by the Division, agreement on methodology to regulate the scrap etc.

43. The order should also indicate that go ahead for the supply of pilot batch will be given
only after successful manufacture / supply of first off sample and further orders after
successful execution of the pilot batch. The order may also include a provision to the
effect that a long-term agreement may be entered into for supply of the component,
depending upon Sub-Contractors/Service Providers performance.

44. While the Purchase Orders are released to the maximum capacity declared by the Sub-
Contractors/Service Providers or / as agreed to between the Sub-Contractors/Service
Providers and HAL based on competitive bidding, there should be close and continuous
monitoring to ensure that the Sub-Contractors/Service Providers is not overloaded
beyond the declared / agreed capacity after taking into consideration the mutually agreed
delivery schedule.

45. RFQ should stipulate that reproduction of drawings / documents without written
permission from the Division is an offence and prohibited. Divisions shall collect back
drawings / documents from unsuccessful tenderers. Division may also consider entering
into a Non-Disclosure Agreement (NDA) with the successful bidder in the case of
assemblies of vital nature. In case of Service providers, there should be non dis-closure
agreement (NDA) to be signed by the Service provider with their sub contractors (Tire II
Supplier).

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46. The Sub-contract Order shall clearly indicate the Part No., Description / Specification,
Drawing No. (latest issue), Quantity, Price, Delivery Schedule, Work Order No., and the
bill of materials that will be provided by HAL free of charge as well as those on
chargeable basis. If possible, the order will also indicate the details of tools, gauges,
Parts/sample supplied on returnable basis. The Production Engg Dept. will provide
assessment of the materials & the quantity required for executing each item and also
indicates cutting and machining allowances.

47. In respect of assembly jobs, it is suggested to issue the materials in matching quantities
(kits) to avoid delay in executing the order and to avoid inventory built-up at Sub-
Contractors/Service Providers premises.

48. In the case of component sub-contract, once the component has been proved
successfully, it is suggested to place orders for yearly requirement with staggered
deliveries. If the requirement of the components exist on a continuous basis for a longer
period, say 3-5 years, it is suggested to enter into Long Term Agreement with the same
Sub-Contractor/Service Provider and repeat orders placed on the basis of base price
(fixed for long term) with reduction considering the benefit of Learning and Technical
assistance provided by Division. In exceptional cases, escalation to the base values may
be agreed to, before the contract is finalized.

49. Division must take into account the benefits of long term relationship and nurturing such
relationships, especially in case of items involving high development costs and areas
where there is necessity for taking advantage of Sub-Contractors/Service Providers
specialization and technical expertise. To the extent possible, fresh RFQ from the vendor
should be avoided once the component has been proved successfully.

50. Divisions also need to widen Sub-Contractors/Service Providers base to cut costs and
encourage competition between Sub-Contractors/Service Providers. Necessity for
multiple sources, to reduce the risk associated with depending on a single Sub-
Contractors/Service Providers, is to be recognized and a well balanced approach is to be
taken.

51. Divisions may firm up standard commercial terms & conditions with the Sub-
Contractors/Service Providers at the placement of first order, to avoid repetition of the
same every time while placing the orders on the same Sub-Contractors/Service
Providers.

52. The primary contractor on whom HAL has placed the order should avoid involvement of
other Sub-Contractors/Service Providers in executing the contract. Wherever it is in-
escapable for the primary Sub-Contractors/Service Providers to have another Sub-
Contractors/Service Providers for technical reasons to be recorded, specific approval of
the competent authority, who approved the contract, should be taken. The Division
needs to assess and take a view, if the requirement of primary Sub-Contractors/Service
Providers to subcontract a part of the work to his sub-contractors, is necessary and
acceptable keeping in view criticality of operations and ensuring that key operations are
performed by primary Sub-Contractors/Service Providers.. However, in such a case, the
contract with primary Sub-Contractors/Service Providers must clearly state his
responsibilities to quality and adherence to work procedures as defined by HAL as also
guarantee for the work done.

Material Supply:

53. As far as possible the Sub-Contractors/Service Providers shall be asked to quote the
price for the tooling including the cost of materials. In cases where the materials required
for tool manufacture will have to be supplied by HAL, the same would be based on HALs
estimate and such HALs estimate for material including wastages will be binding on the

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part of the Sub-Contractors/Service Providers. Such material will be supplied against
furnishing an Indemnity bond covering the cost of material in favour of HAL by the Sub-
Contractors/Service Providers. The Sub-Contractors/Service Providers will also be
required to take a comprehensive insurance policy covering all risks including fire, theft,
damages / loss of material etc., while HALs supplied materials are in his custody and
such Insurance Policies will be assigned to HAL.

54. In view of the nature and type of raw materials / items for airborne components /
Assemblies, quantity required and to ensure quality, it may be necessary for the Division
to supply the raw materials / items of correct specification in required quantities to the
Sub-Contractors/Service Providers. Such issues shall be against indemnity bond /
insurance cover. The Sub-Contractors/Service Providers, in turn needs to ensure that
the raw materials / items are classified as aeronautical (bonded) stores and are properly
tagged and stored separately to avoid any mix-up with commercial materials. Division
must also ensure that the raw material is accompanied by copies of route card, accepted
raw material tag (process sheet in case of process developed in-house) etc. For
monitoring of storage and consumption, periodic verification of quality of storage and
quantity shall be carried out at the Sub-Contractors/Tier-IIs premises. Such verification
shall be as often as considered adequate, but in all cases at least once in a year.
Traceability of components is an important factor in the quality management as such the
Service Providers will ensure /maintain the traceability data as required by HAL.

55. In case Sub-contractors/Service providers are sourcing the materials on their own and
HAL is not supplying the materials, the same should be done from HAL approved
sources. In case Sub-contractors/Service providers procure the materials from sources
other than HAL approved sources, the same should be done after approval of HAL. The
normal acceptance procedures to be followed for all materials sourced by Sub-
contractors/Service providers.

Assistance to Sub-Contractors/Service Providers:

56. In view of the high quality and accuracies inherent in airborne components / items,
Division needs to continuously inter-act with the Sub-Contractors/Service Providers for
any assistance required with respect to technologies as well as Special Tools, Gauges
etc. for manufacturing the components and provide the same, wherever considered
necessary. A proper record of the Tools, Gauges etc supplied to the Sub-
Contractors/Service Providers is to be kept and the items collected back once the job is
completed.

57. Wherever the material has to be supplied by HAL, proper accounting system needs to be
followed for costing, requisition, coding, accounting etc. In case material is supplied by
HAL, the rejection allowances and recovery etc. shall be as under:

i. The maximum permissible rejection allowance shall be ____ (to be indicated by the
respective Division, taking into account in-house norms). In case the rejection exceeds
___, the cost of raw materials rejected beyond ___ shall be recovered from the Sub-
Contractors/Service Providers at prevailing market rate of materials supplied to Sub-
Contractors/Service Providers. All rejected materials shall be returned to Divisions by the
Sub-Contractors/Service Providers on FOR __________ Division basis.

ii. Should the Sub-Contractors/Service Providers default for payment towards cost of
rejection, the recovery will be affected by the Division from their other pending bills or
otherwise invoking indemnity bond furnished by the Sub-Contractors/Service Providers.
In such cases, no labour charges / conversion charges will be paid to the Sub-
Contractors/Service Providers.

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iii. Wherever inherent defects are noticed by the Sub-Contractors/Service Providers during
machining of raw material and Sub-Contractors/Service Providers has promptly brought
the same to the notice of HAL, the Sub-Contractors/Service Providers can be considered
for compensation. The extent of compensation would be in terms of labour charges upto
the stage of rejection. The labour charges need to be approved by the same CFA who
had approved the original order after obtaining the concurrence of the appropriate
Finance and based on certification of HAL inspector.

58. Further, in cases where Division procures the material for supply to vendors / Sub-
Contractors/Service Providers, Division needs to avail the tax rebates / duty exemption
available to HAL as a Defence Undertaking, wherever permissible.

59. As per the normal practice the transportation of raw material to subcontractor and
finished goods to HAL shall be insured under the open policy to cover damage / loss in
transit.

Inspection and consequences of rejection

60. Inspection should be carried out preferably at Sub-Contractors/Tier-IIs works, and
dispatch to HAL should be authorized only after carrying out necessary rectification if
any. However, final inspection and acceptance will be at HAL premises only.

61. In case of any deviation, the Inspector shall prepare a report indicating the deviation
observed. This shall be examined if required by a Committee consisting of
representatives of Quality control, Production Planning, Design & Outsourcing Cell, as
per the practice being followed at the Division. The Committee shall recommend the
disposal as follows:

i) Accept item with deviation, if the deviation is minor and no re-work is required
and interchangeability is not affected or

ii) Re-work by HAL and charge the Sub-Contractors/Service Providers for the same.
Approval for rework cost may be accorded by the same CFA who had approved
the original order after obtaining the concurrence of the appropriate finance.
Outsourcing Cell shall advise the Accounts Department and the Sub-
Contractors/Service Providers the cost details of rectification to be deducted from
the Sub-Contractors/Service Providers bills.

iii) Return the item to Sub-Contractors/Service Providers for rectification and return
back within an agreed timeframe.

Bank Guarantee:

62. General Bank Guarantee: Outsourcing cell shall obtain General Bank Guarantee from
the Sub-Contractors/Service Providers as under on yearly renewable basis:-

Max. Value (in Rs.) of materials held with Sub- Contractor Value of Bank
/Service Providers at any point of time during the year Guarantee (Rs.)

Upto 1,00,000 10,000
(or value of material,
whichever is lower)
1,00,001 to 3,00,000 20,000
3,00,001 to10,000,000 30,000
Beyond 10,00,000 40,000

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63. For the purpose of estimating the value of Bank guarantee, the value of materials is
based on landed cost including cost of tools (supplied by HAL as well as fabricated by
the Sub-Contractors/Service Providers and paid by HAL), prototype / samples supplied
on returnable basis. The costs need to be got coordinated by the Finance Deptt.

64. Since the value of the Bank Guarantee does not fully cover the cost of HAL supplied
material, the value of materials issued to the Sub-Contractors/Service Providers would
need to be regulated & monitored on a continuous basis to ensure that the materials are
issued progressively against completion of orders and there is no excess stock left with
the Sub-Contractors/Service Providers.

Bank guarantee for advance

65. Outsourcing cell shall obtain a bank guarantee from the Sub-Contractors/Service
Providers for an amount equal to the advance made towards development work,
fabrication of tools / components / subassembly etc., which shall be valid till the
completion / supply of items Sub-contracted.

Indemnity Bond

66. To cover the value of materials / other items to be supplied by the Division in excess of
the Bank guarantee, the outsourcing cell shall obtain an indemnity bond from the Sub-
Contractors/Service Providers valid till required finished items (manufactured out of the
materials supplied) and balance if any are delivered to HAL. The indemnity bond shall be
in favour of HAL.

Insurance

67. The Sub-Contractors/Service Providers shall take an insurance against loss / damage in
favour of HAL for the value of materials supplied by HAL.

Ancillary Units

68. Ancillary Units need not provide Bank Guarantee for materials. However, they should
furnish indemnity bond and insurance as mentioned above. The Ancilliary Units should
also furnish necessary Bank Guarantee to cover the advance payment, if any.

Monitoring:

69. Out-sourcing of tooling / components on sub contract basis shall be under the
supervision and control of Sub-Contracting Cell of the Division.

70. Considering the stringent requirements and nature of aeronautical industry, Division shall
fully support the Sub-Contractors/Service Providers during the initial stages. Division will
also continuously interact with the Sub-Contractors/Service Providers for any assistance
required with respect to technologies. Divisions will ensure that the tools, gauges etc.,
given to the Sub-Contractors/Service Providers by HAL are properly maintained /
calibrated as per the quality requirement.

71. Division will continuously monitor the performance of each Sub-Contractors/Service
Providers on Quality, Delivery, Price etc., and advise corrective action, wherever
required. Persistent failure in timely delivery / quality compliance would entail
cancellation of registration and same need to be informed to the Sub-
Contractors/Service Providers and as well as other Divisions.

Page 12 of 12
Rev.03
Reporting and Assessment of Sub-Contracting Activities

72. Outsourcing Cell will submit a Quarterly report to the Head of the Division, highlighting
the details of extent of Sub-Contracting done with each Sub-Contractors/Service
Providers in terms of nature of job, extent of Hours loaded, pending jobs & performance
of Sub-Contractors/Service Providers. Service Providers shall provide an MIS on the
status of supplies and other details as per the required periodicity.

73. Savings from sub-contracting can not be separately identified as income. Therefore, the
savings should be worked out, on monthly basis and reported, as per guidelines to be
issued separately by Corporate Office Finance.

Integrity Pact

74. Signing of an Integrity Pact shall be considered between HAL and the bidders for
contracts exceeding Rs 20 Crs. The Integrity Pact is a binding agreement between the
HAL and bidders for specific contracts in which the HAL promises that it will not accept
bribes during the Sub-Contracting process and bidders promise that they will not offer
bribes. The bidders are required to sign Integrity Pact and submit separately along with
the technical and commercial offers.

Procedure for Sub-Contracting of Tooling, Components & Assemblies-Annexure
Page 1 of 28
Rev.03
Issue date:12 Nov 2009
Annexure-I
Hindustan Aeronautics Limited
.Division

Application for Registration as Sub-contractor

Ref:
(Office Use Only)

Complete all sections of the form, sign the declaration and send the completed form and
attachments in an envelope marked Application for Registration as Sub-contractor alongwith
Demand Draft/ Pay Order for Rs. 100/- (Non-refundable) to:

The Executive Director/General Manager
.Division

so as to reach him on or before .

Section 1: Applicant Particulars
(Applicants with their own manufacturing facilities, and not stockists/ agents, need only apply)

Name of the
Individual/ Firm/
Company:

Constitution or
Legal status

Registration
Number:

Registering
:
Authority
Date of
Registrati
on

Registered
Address Office:

Address of
Factory

Contact Person
Name and
Designation:

Address for
Correspondence
:

Tel. No.

Fax No.
Mobile No Email
Address:

Page 2 of 28
Rev.03

Section 2: Applicant profile

2.1 Type of Ownership:

Individual Partnership Ltd. Company (Pvt./ Public)

PSU/ Govt. Undertaking Research Institute Trust

Joint Venture or other tie-up for technology, equipment, financial backing and/or Project
Management (Please specify)

Other, please specify

Enclose copies of Income Tax Return (in case of individual)/Partnership Deed/Articles &
Memorandum of Association/ JV Agreement/ Certificate of incorporation/ Certificate of
Registration etc as applicable, duly certified by Chartered Accountant.

2.2 (a) Are you a small scale Industry registered with the N.S.I.C? Yes / No

If yes, please enclose copy of NSIC Competency/ Capacity certificate.

(b) Do you have ISO 9000/9001/9002/AS9100 certification? Yes / No

If yes, please specify & indicate validity:

(c) In case of certification by other accredited institutions, please give details:

Institution Type of Certification Valid up to (date)

(d) Give details of registration, if any, with:

Company Registration Number Dated Validity
Class/ Type of
Registration
HAL or its Divisions
(Specify Division)

DGS & D
PSUs
Central/State Govt
Major Private
Institutions

Others (Specify)

Attach necessary certificates from the registering authorities.

Page 3 of 28
Rev.03


2.3 Have you undertaken any work on subcontract from HAL, or any of its Divisions, in the past
3 years or presently.
Yes / NO
If so, please give details, starting with most recent orders:

Division of HAL Order number &
Date
Items/ Brief description of Work Date of
completion
of Order

2.4 Have you undertaken any work for customers other than HAL in the past 3 years.
Yes / NO

Name of the
Customer
Items/ Brief description of Work Value in Rs. Date of
completion
of Order

Please attach certificate of completion/ Proof

2.5 List the names of Owners/ Partners/Promoters and Directors/ Company Secretary/ Holder of
Power of Attorney, as applicable, in the format detailed below:

Name of the Owners/
Partners/ Promoter &
Directors/ Company
Secretary/ Holder of
Power of Attorney
Address Whether Owner/
Partner/ Promoter/
Director/ Company
Power of Attorney
Extent of share holding
in the Firm/Company as
the case may be

Page 4 of 28
Rev.03

2.6 List the names & addresses of all associated, subsidiary & holding companies, including
trusts

Company Name Address Nature of Business Relationship with
Applicant

2.7 Qualifications and experience of key Technical personnel. Attach biographical data.

Position Name Qualifications Assignment/ Duties Years of
experience in the
position of
assignment

2.8 Companys Total Technical Personnel by Discipline:

Trade/ Discipline Number of
Personnel
Trade/ Discipline Number of
Personnel
Turners

Quality/ Inspectors

Millers

Shop Engineers/ Methods

Fitters

Draughtsman

Welders

Total

Others (Please specify)

Total Personnel

2.9 Give details of major equipment of Plant & Machinery and Inspection Equipments available,
as per format detailed below:

Item of
Equipment/
Machine
Model/ Make Capacity Nos
Accuracy
achievable
Year of
Purchase
1 2 3 4 5 6
Details Attached YES / NO

2.10 Give a short write-up on Project Planning and Quality Control Procedures in practice in your
organization or proposed to be adopted.

2.11 Please indicate availability of Inspection Facilities including availability of equipments such as
Profile Projector and multi-axes Co-ordinate Measuring Machine etc in the format given at
para 2.9. Please indicate procedure existing for calibration of Instruments and periodicity.

Page 5 of 28
Rev.03


Section 3: Financial details

3.1 Annual Turnover in the past 3 years:

Year

Annual Turn-over
(Rs. Lakhs)

Profit/ Loss
(Rs. Lakhs)

3.2 Attach the following audited financial statements, as applicable, for the past three financial
years and place a tick mark in the appropriate column as confirmation of having enclosed the
appropriate documents with the application.

Year
Balance Sheet

Profit/Loss Statement

IMPORTANT NOTE Financial Assessment:

Hindustan Aeronautics Limited may conduct financial assessments and prepare reports on all sub-
contractors applying for registration, and for regular reviews.

Before the assessment of this application can be completed, a representative from HAL may contact
you concerning the financial and technical information that you provide. Your co-operation is required
to assist in the assessment process. Failure to co-operate may affect registration.

The assessment report is specifically for use by HAL for the purpose of assessing sub-contractors for
registration, and will be treated as strictly confidential.

3.3 Bank(s) details:

Will you authorise your Bank/s to supply HAL with a reference
as to your financial position, if required?

YES / NO
Name of Bank
(Scheduled Commercial Bank) &
Branch

Name and
Designation of Contact Person:

Address:

Tel No:

Page 6 of 28
Rev.03


3.4 If operating an overdraft, please state, Bank-wise details:

Name of the Bank & Address the limit of your overdraft
Rs

3.5 Details of Income Tax assessed, as per clearance Certificate, in the last 3 years :

YEAR
Amount
Assessed
(Rs. Lakhs)

Amount paid/
payable
(Rs. Lakhs)

Attach copies of Income Tax Clearance Certificates for the past 3 years.

3.6 Sales Tax/VAT Details: Central sales Tax Registration No.:.

State sales Tax/VAT registration No:..

Details of Sales Tax assessed, as per clearance Certificate, in the last 3 years :

YEAR
Amount
Assessed
(Rs. Lakhs)

Amount paid/
payable
(Rs. Lakhs)

Attach copies of Sales Tax Clearance Certificates for the past 3 years.

3.7 Have you ever been, whether in the capacity of sole trader, partner, company director,
manager or company secretary, either:

1. Declared bankrupt or compounded with or made an assignment for the
benefit of creditors?

YES / NO
2. Engaged in the management of any company which has taken or had
instigated against it any action resulting in the winding up of the
company, being placed under official management or had a receiver
and manager appointed?
YES / NO

Note: If you have answered yes to either 1 or 2 above, please attach all relevant details. Failure to
disclose any of the above matters may affect your registration.

Page 7 of 28
Rev.03


Section 4 Registration category/ Facilities/ Capabilities

4.1 Give the floor area of your factory and Offices. If you own more than one factory, please give
separate details for each unit:

Factory or Office Location Area in
Square Meters

4.2 Mark in the boxes below to specify THE TYPE OF OPERATIONS/ MANUFACTURING
PROCESSES for which you seek registration and Capacity available for contracting. To be
considered for registration for any type, the applicant must clearly demonstrate that all
marked facilities are available.

Operations/ Facility Hours
Spareab
le/
annum
Spareable
/ annum
Operations/
Facility
Hours
Spareable/
annum
Metal Removing
Processes
Deformation
Processes
Plasitics &
Composites

Turning Punching Fiberglass Moulding
Thread Cutting Hydraulic Press Composites
Milling Fly-Press
Copy Milling Strech Forming Thermoforming
Gear Machining Brake Press Welding Facilities
CNC machining Stamping Gas Welding
Drilling Spring Making &
Wire Forming
Electric Arc
Gun Drilling Spinning Argon Arc
Jig Boring Label making TiG Welding
Shapers Formed Tubing MiG Welding
Broaching Cold-Heading Heat Treatment
facilities

Fluting Kilns, Ovens &
Industrial Heating

Grinding
Die Sinking
Cutting Castings & Forgings Plating & Painting
Cutting- coventional Casting Nickle Plating
Cutting- Laser Casting Ferrous Cadmium Plating
Cutting- Plasma Casting
Non-Ferrous
Anodising
EDM wire Cutting Die Casting Painting
ECM Coating
Water jet Cutting Investment Casting
Shearing

Page 8 of 28
Rev.03

Operations/ Facility

Hours
Sparea
ble/
annum
Spareabl
e/ annum
Spareable
/ annum
Assembly/ Joining Moulding Electronic Equipment
Assembly

Riveting Injection Moulding Soldering Station
Spot Welding Plastic Injection
Moulding
Electronic Test
Equipment

Joining Powdered Metal
Moulding
ATE for PCBs
Assembly Sintered Products Clean Rooms
Rubber Moulding Wood Working Quality
Gaskets and Seals
manufacturing
Profile Projector
Co-ordinate measuring
Machine

4.3 Mark in the boxes below to specify THE CATEGORY/ TYPE OF GROUND HANDLING
EQUIPMENT AND TOOLS for which you have capability and are willing to take up on sub-
contract:

Category/ Type of Tool Tick
mark if
yes
mark if
yes
mark if
yes
Ground Handling Equipment Measuring Tools & Instruments Steel Forming Mandrels
Trolleys Plug Gauges/ ring
Gauges/ snap gauges/
taper gauges
Single plane template
application

Off Jig Stands Thread Gauges/ Co-
axiability Gauges
Double plane template
application

Working Stands Three plane template
application

Ladders
Assebly Tools and fixtures Cutting Tools (HSS/ Carbide
Tip)

Wooden Form Blocks
- Size upto 700 X 700
mm
Single Point Tools Of size upto 500 mm
- above 700 mm Drills Of size above 500mm
Hydraulic Jacks Counterbores,
Countersinks

Up to 8T Reamers
Up to 10 T Milling Cutters
Up to 20 T Taps, Threading
Round Dies

Broaches
Lapping Tools

Page 9 of 28
Rev.03
Note for the HAL Divisions: The above categories & sizes are indicative. The Division may modify to
suit their specific requirements.

mark if
yes
mark if
yes
mark if
yes
Slings Jigs and Fixtures Moulds
Wire Rope
4 to 16 mm dia
With base plate size up
to 400X400 mm
O Ring mould 45
degree

Other: Specify With base plate size
more than 400X400
mm
O Ring mould other
than 45 degree

Hand Tools Heat Treatment/
Plating Fixtures
Multi-cavity O Ring 45
degree moulds

Rivet Snaps Expanding Mandrels Gasket Moulds
Rivet Squeezers Press Tools Tubular Moulds
Pliers Blanking/ Piercing Dies Injection Moulds
Scissors Progessive Dies/
Compound Dies/
Combination Dies
Ejector Type plastic
moulds

Pneumatic Guns Bending Dies/ Deep
Drawing Dies/ steel
forming dies up to
500X500 mm

Torque Wrenches Steel forming dies
above 500X500 mm
size

Markers Steel forming dies
above 1000X1000 mm
size

Extractors Inspection Lofts

4.4 Mark in the boxes below to specify THE CATEGORY/ TYPE OF PRECISION
COMPONENTS OF AERONAUTICAL STANDARDS for which you have capability and are
willing to take up on sub-contract:

Category/ Type of
Component
Tick
mark if
yes
Category/ Type of
Component
Tick
mark if
yes
Category/ Type of
Component
Tick
mark if
yes
Sheet Metal Components Machined Components Non-Metallic Components
Press Components Turned Components Rubber Injection
Moulding

Extruded/ Drawn
Components
Conventional Milling
Components

Rubber Components
Standard Sections Components with
Extensive NC Turning
& associated
Operations

Fiber Glass
Components

Components with
Extensive NC Milling &
associated Operations
Components of
Composite Materials

Page 10 of 28
Rev.03
Note for the HAL Divisions: The above categories & sizes are indicative. The Division may modify to
suit their specific requirements.

Category/ Type of
Component
Tick
mark if
yes
Category/ Type of
Component
Tick
mark if
yes
Category/ Type of
Component
Tick
mark if
yes
Asseblies & Sub-assemblies Specific Components Non-Metallic Components
(Contd)
Aircraft Structural
Assemblies Rivetted

Fasteners, AGS/ AGL
Spares

Aircraft Structural
Assemblies Welded

Engine Discs, Shafts
Hot Forming
Acrylic/ Perspex/
Macrolon etc

Mechnical Assemblies Gears Bevel, Spur,
splined shafts

Blow Moulding
Pneumatic, Hydraulic,
Fuel Actuating
Cylinders

Small Components
such as brackets,
covers, adopters,
sleeves, axles, levers
etc

Looms/ Electric Cables

Engine Discs, shafts
PCB Assemblies Machined Casings,
rings

Pipe Lines Springs
Castings & Forgings Metallic tanks Wooden Components
Valves, atomizers,
Nozzles etc

4.5 Indicate whether separate storage facilities are / can be made available for storage of aircraft
materials to avoid any mix up with commercial materials.

4.6 List total value of Sub-Contract work performed in the last three years

Year

Value of Sub-Contract work
performed (Rs. Lakhs)

4.7 In the last 3 years, has your firm, or any firm with which any of your company's owners,
officers or partners were associated, been debarred, disqualified, removed, blacklisted or
otherwise prevented from bidding or taking up any sub-contract?
YES / NO

If yes, State the sub-contract order and the basis for the action.

5. Please provide any additional information, which will help you in securing registration with
HAL.

Page 11 of 28
Rev.03
6. DECLARATION:
(This declaration should be completed by a proprietor, partner, director or other senior
manager who has the authority to do so.)

1. I/We declare and confirm that

a. The HAL Conditions of Registration are acceptable.

b. All information and attachments submitted in this application are true and
correct.

c. I/We are aware that any false information provided herein will result in the
rejection of my application and cancellation of any registrations granted.

d. I/We shall be bound by the acts of duly constituted attorney who has signed this
application and of any other person who in future shall be appointed by us in
his place to carry on business of the concern whether or not an intimation of
such changes is given to HAL.

e. I/We have read and understood HALs General Conditions of Contract and
agree to abide by the same in all respects.

f. I/We undertake to communicate promptly to HAL any changes in condition or
working of the firm.

g. I/We confirm that we have our own manufacturing facilities.

2. I/We enclose herewith a pay order/ bankers draft number drawn on
Bank. for Rs. 100/- as processing fee, which is non-
refundable.

Signed: .. Name: ..

Position: Date:

Details of person holding the power of Attorney (If different from above)
(attach attested copy)

Name . Tel. No. ( ) ... Mobile
No..

Position ..Fax No. ( ) ...

Official Seal

Page 12 of 28
Rev.03
Annexure-II
.Division

Application for Registration as Service Provider

Ref:
(Office Use Only)

Complete all sections of the form, sign the declaration and send the completed form and
attachments in an envelope marked Application for Registration as Service Provider
alongwith Demand Draft/ Pay Order for Rs. 100/- (Non-refundable) to:

The Executive Director/General Manager
.Division

so as to reach him on or before .

Eligibility:
The service provider should be reputed firm with long standing / experience with minimum turnover of
Rs. 50 Crs. to apply as a Service Provider.

Section 1: Applicant Particulars

Name of the
Firm/ Company:

Constitution or
Legal status

Registration
Number:

Registering
:
Authority
Date of
Registrati
on

Registered
Address Office:

Contact Person
Name and
Designation:

Address for
Correspondence
:

Tel. No.

Fax No.
Mobile No Email
Address:

Page 13 of 28
Rev.03

Section 2: Applicant profile

2.1 Type of Ownership:

Partnership Ltd. Company (Pvt./ Public) PSU/ Govt. Undertaking

Research Institute Trust

Joint Venture or other tie-up for technology, equipment, financial backing and/or Project
Management (Please specify)

Other, please specify

Enclose copies of Income Tax Return (in case of individual)/Partnership Deed/Articles &
Memorandum of Association/ JV Agreement/ Certificate of incorporation/ Certificate of
Registration etc as applicable, duly certified by Chartered Accountant.

2.2 Give details of registration, if any, with:

Company Registration Number Dated Validity
Class/ Type of
Registration
HAL or its Divisions
(Specify Division)

DGS & D
PSUs
Central/State Govt
Major Private
Institutions

Others (Specify)

Attach necessary certificates from the registering authorities.

2.3 Have you provided Services on Sub-Contracting work to HAL, or any of its Divisions, in the past 3
years or presently.
Yes / NO

Division of HAL Order number &
Date
Items/ Brief description of Work Date of
completion
of Order

Page 14 of 28
Rev.03

2.4 Have you provided Services on Sub-Contracting work to customers other than HAL in the past 3
years.
Yes / NO

Name of the
Customer
Items/ Brief description of Work Value in Rs. Date of
completion
of Order

Please attach certificate of completion/ Proof

2.5 Qualifications and experience of key Technical personnel. Attach biographical data.

Position Name Qualifications Assignment/ Duties Years of
experience in the
position of
assignment

2.6 Companys Total Technical Personnel by Discipline:

Discipline Number of
Personnel
Discipline Number of
Personnel

2.7 Give a short write-up on Project Planning and Quality Control Procedures in practice in your
organization or proposed to be adopted.

2.8 List the names of Owners/ Partners/Promoters and Directors/ Company Secretary/ Holder of
Power of Attorney, as applicable, in the format detailed below:

Name of the Owners/
Partners/ Promoter &
Directors/ Company
Power of Attorney
Address Whether Owner/
Partner/ Promoter/
Director/ Company
Power of Attorney
Extent of share holding
in the Firm/Company as
the case may be

Page 15 of 28
Rev.03


2.9 List the names & addresses of all Sub-Contractors with whom you have agreement for
execution of Jobs.

Name of the Sub-
Contractors
Address category/ Facilities/
Capabilities
Details of
Service
Agreement
Validity of
agreement

Note: Copies of the agreement with sub-contractors to be provided.

2.10 Details duly filled in by each Sub-Contractors at para-2.9 separately as per Annexure-I & IIIb to
be enclosed.

Page 16 of 28
Rev.03


Section 3: Financial details

3.1 Annual Turnover in the past 3 years:

Year

Annual Turn-over
(Rs. Lakhs)

Profit/ Loss
(Rs. Lakhs)

3.2 Attach the following audited financial statements, as applicable, for the past three financial
years and place a tick mark in the appropriate column as confirmation of having enclosed the
appropriate documents with the application.

Year
Balance Sheet

Profit/Loss Statement

IMPORTANT NOTE Financial Assessment:

Hindustan Aeronautics Limited may conduct financial assessments and prepare reports on all Service
Providers applying for registration, and for regular reviews.

Before the assessment of this application can be completed, a representative from HAL may contact
you concerning the financial and technical information that you provide. Your co-operation is required to
assist in the assessment process. Failure to co-operate may affect registration.

The assessment report is specifically for use by HAL for the purpose of assessing Service Providers for
registration, and will be treated as strictly confidential.

3.3 Bank(s) details:

Will you authorise your Bank/s to supply HAL with a reference
as to your financial position, if required?

YES / NO
Name of Bank
(Scheduled Commercial Bank) &
Branch

Name and
Designation of Contact Person:

Address:

Tel No:

Page 17 of 28
Rev.03


3.4 If operating an overdraft, please state, Bank-wise details:

Name of the Bank & Address the limit of your overdraft
Rs

3.5 Details of Income Tax assessed, as per clearance Certificate, in the last 3 years :

YEAR
Amount Assessed
(Rs. Lakhs)

Amount paid/
payable
(Rs. Lakhs)

Attach copies of Income Tax Clearance Certificates for the past 3 years.

3.6 Sales Tax/VAT Details: Central sales Tax Registration No.:.

State sales Tax/VAT registration No:..

Details of Sales Tax assessed, as per clearance Certificate, in the last 3 years :

YEAR
Amount Assessed
(Rs. Lakhs)

Amount paid/
payable
(Rs. Lakhs)

Attach copies of Sales Tax Clearance Certificates for the past 3 years.

3.7 Have you ever been, whether in the capacity of sole trader, partner, company director,
manager or company secretary, either:

1. Declared bankrupt or compounded with or made an assignment for the
benefit of creditors?

YES / NO
2. Engaged in the management of any company which has taken or had
instigated against it any action resulting in the winding up of the
company, being placed under official management or had a receiver
and manager appointed?
YES / NO

Note: If you have answered yes to either 1 or 2 above, please attach all relevant details. Failure to
disclose any of the above matters may affect your registration.

Page 18 of 28
Rev.03

3.8 List total value of Service provided on Sub-Contracting work performed in the last three years

Year

Value of Service provided
on Sub-Contracting work
performed (Rs. Lakhs)

3.9 In the last 3 years, has your firm, or any firm with which any of your company's owners, officers
or partners were associated, been debarred, disqualified, removed, blacklisted or otherwise prevented
from bidding or taking up any Service on subcontracting work?
YES / NO

If yes, State the service order and the basis for the action.

3.10. Please provide any additional information, which will help you in securing registration with HAL.

Page 19 of 28
Rev.03

4. DECLARATION:
(This declaration should be completed by a proprietor, partner, director or other senior manager
who has the authority to do so.)

1. I/We declare and confirm that

a. The HAL Conditions of Registration are acceptable.

b. All information and attachments submitted in this application are true and correct.

c. I/We are aware that any false information provided herein will result in the
rejection of my application and cancellation of any registrations granted.

d. I/We shall be bound by the acts of duly constituted attorney who has signed this
application and of any other person who in future shall be appointed by us in his
place to carry on business of the concern whether or not an intimation of such
changes is given to HAL.

e. I/We have read and understood HALs General Conditions of Contract and agree
to abide by the same in all respects.

f. I/We undertake to communicate promptly to HAL any changes in condition or
working of the firm.

2. I/We enclose herewith a pay order/ bankers draft number drawn on
Bank. for Rs. 100/- as processing fee, which is non-refundable.

Signed: .. Name: ..

Position: Date:

Details of person holding the power of Attorney (If different from above)
(attach attested copy)

Name . Tel. No. ( ) ... Mobile No..

Position ..Fax No. ( ) ...

Official Seal

Page 20 of 28
Rev.03
Annexure-III

Recommendations of the Committee for Registration as Sub-contractor/Service provider

Ref : .

Name of the Individual/
Firm/ Company/Service
Providers and
Address:

1. Documents as listed at Annexure IIIa & IIIb have been verified and studied. Teams observations
are as follows

2. The team has verified details given by the Applicant in its application, visited the applicants
works/Sub-Contractors works (i.e Tier-II suppliers) on date/s. and have following
comments/ observations to make:

a. The applicant/Sub-Contractors of Service Provider (i.e Tier-II suppliers) has its own
manufacturing facilities, located at .(Place)

b. The Applicant/Sub-Contractors of Service Provider (i.e Tier-II suppliers) has
manufacturing and Inspection facilities as certified at Annexure IIIb

c. Financial soundness of the Applicant

d. Applicants willingness to take up the sub-contracting

e. Availability of spare capacity ( Quantify in terms of man-hours)

f. Method of Material cost assessment acceptable to the applicant (if applicant intends to
quote in terms of man-hour rate only)

Page 21 of 28
Rev.03
Annexure-III


Ref : .

3. Recommendations of the Team:

The applicant is recommended for sub-contracting the following categories of tools/ components.

Category/ Type of Tool /
Component
Component
Component

Sub-Contracting to the applicant is not recommended in view of the constraints listed below:

Signed
(Members of the Team)

Approved

(Executive Director/General Manager)

Page 22 of 28
Rev.03
Issue date:12 Nov
2009
Annexure-IIIa


Ref : .

Following documents have been verified and assessed:
Checked & Verified
by
Document Referenc
e to
Para/
Section
Annex-I
Referenc
e to
Para/
Section
Annex-II
Tick
Mark if
enclos
ed
Designati
on
Signature
Certificate of Registration Section 1 Section 1
Attested copies of IT Return/ Partnership
Deed/Articles and Memorandum of
Association/ JV Agreement/ Certificate of
incorporation/ Certificate of Registration etc
as applicable
2.1 2.1
NSIC Competency/ Capacity Certificate, if
registered with N.S.I.C
2.2 (a)
ISO 9000/9001/9002/AS9100 certificate or
certification by other accredited institutions
2.2(b&c)
Registration with PSUs & Other
Companies
2.2 (d) 2.2
Certificate of work undertaken for
customers other than (the Company)
2.4 2.4
Biographical data in respect of Qualification
& experience of Key management and
Technical Personnel
2.7 2.5
Details of major equipment of Plant &
machinery and Inspection Equipment
2.9
Project Planning & Quality control
Procedures
2.10 2.7
Details duly filled in by each Sub-
Contractors separately as per Annexure-I &
IIIb
2.10
Audited Financial statements for the past 3
years
3.2 3.2
Income Tax Clearance Certificate for past
3 years
3.5 3.5
Sales Tax Clearance Certificate for past 3
years
3.6 3.6
Details of Bankruptcy etc in the past 3.7 3.7
Availability of separate storage space in
case of Bonded Materials.
4.5
Details of Major construction equipment
and spare capacity, thereof, available with
the applicant
4.2
Additional Information/ Documents
collected by the team:

Page 23 of 28
Rev.03

Annexure-IIIb
Manufacturing and Inspection facilities Available with the Applicant
Sparea
ble/
annum
Spareabl
e/ annum
Sparea
ble/
annum
Metal Removing Processes Deformation Processes Plasitics & Composites
Turning Punching Fiberglass Moulding
Thread Cutting Hydraulic Press Composites
Milling Fly-Press
Copy Milling Strech Forming Thermoforming
Gear Machining Brake Press Welding Facilities
CNC machining Stamping Gas Welding
Drilling Spring Making & Wire
Forming
Electric Arc
Gun Drilling Spinning Argon Arc
Jig Boring Label making TiG Welding
Shapers Formed Tubing MiG Welding
Broaching Cold-Heading
Fluting
Grinding
Die Sinking
Cutting Castings & Forgings Heat Treatment facilities
Cutting- coventional Casting Kilns, Ovens & Industrial
Heating

Cutting- Laser Casting Ferrous
Cutting- Plasma Casting
Non-Ferrous

EDM wire Cutting Die Casting
ECM
Water jet Cutting Investment Casting
Shearing
Assembly/ Joining Moulding Plating & Painting
Rivetting Injection Moulding Nickle Plating
Spot Welding Plastic Injection
Moulding
Cadmium Plating
Joining Powdered Metal
Moulding
Anodising
Assembly Sintered Products Painting
Coating

Rubber Moulding Wood Working Quality
Gaskets and Seals
manufacturing
Profile Projector
Co-ordinate measuring
Machine

Page 24 of 28
Rev.03
Annexure-IV
HINDUSTAN AERONAUTICS LTD.,
_________________ (DIVISION)
_____________________(PLACE)
No. Dt.
M/s. Registration No:

Dear Sirs,

SUB: MANUFACTURE & SUPPLY OF TOOLING/COMPONENTS

Offers are invited for the manufacture and supply of the following as per details indicated
below:
1) Specification :

A) Items Description: (to be indicated by the Division)
(Description of item, Qty. etc. to be indicated by the
Division.

B) Technical Drawings: Drawing No.______ of items_______ is enclosed herewith. Vendors are
required to manufacture and supply the required item as per the specification indicated in the drawing
No.______

C) Delivery Schedule: (to be indicated by the Division)

2) Price : Please indicate your lowest unit price inclusive of material cost (in case of Tooling) and
all taxes & duties as applicable for manufacture and supply of the required item at F.O.R.
(destination) ________ Division. You are also required to indicate the quantum/percentage of
taxes & duties built in the quoted price separately. If no taxes / duties are applicable the same
to be indicated as Nil.

3) Delivery : Please indicate lead time for delivery of required item and delivery
schedule.

4) Your quote is subject to following terms & conditions:

Required item will be manufactured from the material as per the specification and grade
indicated in the drawings enclosed.

In case material required for tool/ Component manufacture is supplied by HAL, you are
required to quote only for the labour cost.

The material if supplied by HAL will be against Bank Guarantee of specified value and
Indemnity Bond of amount equivalent to value materials, shall be furnished by you in
favour of HAL, and shall be valid till required finished item manufactured out of the
materials supplied including balance material if any returned back. In such cases, you are
also required to take Comprehensive Insurance Policy covering all risks including fire,
theft, and damages/loss of materials etc., for the material of equivalent values and such
Insurance Policies will be assigned to HAL.

In case where the materials required for tool/ component manufacturing will have to be
supplied by HAL, the same would be based on HALs estimate and such HALs estimate
for material including wastages will be binding on the part of the vendor.

Page 25 of 28
Rev.03
Annexure-IV

Payment Terms : HALs standard terms of payment are: 90% of the value of the items
supplied will be paid on receipt of items at ..and balance 10% will be paid on
acceptance but not later than 30 days from the date of receipt at our works.

5) HAL is not bound to accept the lowest or any other quotation and reserves the right
of accepting the whole or any part of the quotation or part of the quantity offered and you must supply
the same at the rate quoted.

6) The quotation should be neatly typed or printed. Hand written quotations are liable to be
rejected. Prices should be quoted in Figures and Words. Corrections/over writings are not allowed.
Unsolicited letters/post tender modifications by you will not be accepted and your original offer is liable
to be rejected on this ground.

7) The other general terms & conditions will be as indicated in Annexure- V

8) Please submit your lowest quotation in duplicate in sealed cover duly super-scribing Tender
No., name of the item & due date on top of the envelope. Your offer should reach us on or before
_________ hrs._______ positively.

9) In case you are not submitting an offer against this enquiry, the drawings/other documents
enclosed shall be returned positively.

The cover should be addressed to: (complete address to be indicated by the Division)

Head of IMM
________ Division,

Head of IMM
Encl: Annexure-V

Note :

a) Proforma for Bank Guarantee/Indemnity Bond towards material supplied by HAL to be
provided by the Division.

b) In case of Components, quantity required per annum as well as the likely quantities
required, say, for the next 3-5 years (in case of continuing project) need to be indicated in
the enquiry and vendor(s) asked to quote best price taking into consideration the long
term requirement of the component.

Page 26 of 28
Rev.03
Annexure - V
HINDUSTAN AERONAUTICS LTD

GENERAL TERMS AND CONDITIONS

ACKNOWLEDGEMENT:
1. An acknowledgement of the Sub-contract order shall be sent to HAL confirming their acceptance
regarding Specification, Quantity, Price, Payment Terms and delivery schedule as indicated in the
order and also terms and conditions attached to the order within 3 days of its receipt by the
supplier.

DAMAGE/LOSS TO MATERIAL:

2. In case where material has been supplied by HAL, vendor shall take due care of the raw-material/
special toolings etc. supplied by HAL___Division and will indemnify HAL______Division to the full
value in case of damage/loss of these materials. However, in case of special tooling, normal wear
and tear while in usage will not be considered as damage.

REJECTION ALLOWANCE & RECOVERY:

3. In case where materials are supplied by HAL, the rejection allowance and recovery etc. shall be
as under:
i. The maximum permissible rejection allowance will be ____. In case the rejection exceeds
_____ HAL.Division shall recover from the vendor the cost of raw material rejected
beyond ___ at prevailing market rate of the material supplied to the vendor. All rejected
materials will be returned to HAL..Division by the vendor on F.O.R basis.

(Note : Percentage for rejection allowance etc. to be indicated by the respective Division)

ii. Recovery of cost of rejected materials beyond mentioned at para (i) above,
HAL.Division shall intimate the vendor the cost of rejection, and the vendor will
pay to HAL by crossed Demand Draft within 15 days, failing which, the recovery will be
effected from their other pending bills or otherwise invoking indemnity furnished by the
vendor. In such cases, no labour charges/conversion charges will be paid to the vendor.

iii. Wherever inherent defects are noticed by the vendor in HALs supplied materials during
machining, the vendor shall immediately discontinue machining operation and intimate HAL.
HAL shall compensate the vendor to the extent of content in terms of labour charges on the
basis of certificate by HAL Inspector.

4. Deduction, on account of operations not carried out by the Sub-Contractors/Service Providers
as per Purchase Order, and carried out by HAL shall be HALs actual in-house booking of hours
multiplied by Divisions composite MHR.

TAXES:

5. Government (State/Central) Taxes, duties and levies applicable at the time of delivery of stores
will be as applicable, subject to submission of proof thereof.

INSPECTION:

6. Goods shall be inspected by HAL_____ Divisions Inspector at vendors works. The report
furnished by HAL______Division Inspector will be final and binding on the vendor. The vendor
shall provide inspection facilities free of charge. The intimation regarding readiness of tools
should be given by the vendor seven days in advance in order to enable HAL ______ Division to
depute inspector to carry out the inspection. However the final inspection and acceptance will be
at HAL.

Page 27 of 28
Rev.03
Annexure - V
QUALITY AND WORKMANSHIP:

7. The vendor shall ensure that the tools/components supplied by them shall be of the highest
quality and workmanship and as per the drawings & specification provided by AL. Wherever
orders are placed in accordance with particular specification/drawing requirement, it will be
deemed to be an undertaking by the vendor that they have fully acquainted themselves with
various drawings/ specifications/standards thereof.

WARRANTY:

8. The supplies shall be free from any defects/workmanship and shall be guaranteed for
Quality/satisfactory performance for a period of __________ months from date of acceptance.
Any defect because of faulty material (if not supplied by HAL)/workmanship noticed during the
guarantee period shall be rectified by the vendor free of cost. In case, where full checking is
initially not possible and the final inspection will be done at the time of actual production, the
defects if any noticed at that time will be reported immediately to the vendor. In case vendor fails
to rectify within 30 days from date of notification, the cost of raw materials and other charges paid
to the vendor will be recovered from pending bills/BG/Security deposit of the vendor.

DELIVERY SCHEDULE:

9. The time/date of delivery of the store mentioned in the order shall be deemed to be the essence
of the contract and delivery must be completed not later than the dates specified there in. Should
the vendor fail to deliver the stores within the prescribed period, HAL shall be entitled at their
option:-

a. to recover from the vendor agreed liquidated damages & not by way of penalty, a
sum of % of the value of the item not delivered in time for each week of delay or part of
week subject to a maximum of 12 % or

b. to purchase from alternate source at the risk and cost of the vendor, the item not
delivered or

c. to cancel the order

10. In the event of action being taken under (b) & (c) above, the vendor shall be liable for any loss,
which HAL may sustain.

ISSUE OF MATERIALS:

11. Raw materials are to be collected by the vendor from our stores and finished items delivered at
our GI Stores. No extra delivery charges will be paid by HAL.

12. The materials/other items received from HAL shall be properly identified with the order no,
specification and quantity .These shall be protected from misuse, loss, damages and
deterioration, properly stored at suitably identified and marked place.

13. Special Tools & Gauges, if any required will be supplied on returnable basis subject to availability.
If vendor fails to return the same along with the last supply of last accepted items the bills will not
be cleared for payments.

14. All Tools/ Gages fabricated by Sub-Contractors/Service Providers and funded by HAL shall be
returned to HAL alongwith Last supply/ Completion of Task.

SUB-CONTRACTING/ SUB-LETTING:

15. The Sub-Contractors/Service Providers shall not sub-let any portion of the contracted job
without prior written approval of HAL

Page 28 of 28
Rev.03
Annexure - V
MATERIAL CHANGE IN INFORMATION:

16. Vendor shall always inform any material changes in the information already declared/furnished by
them at the time of registration or afterwards, within 30 days of such material change in
information. Non-compliance of this is likely to result in cancellation/deletion of your registration as
registered vendor.

CONFIDENTIALITY AGREEMENT:

17. Vendor is given the drawings/ process sheets for manufacture of the components required by
HAL --- Division. The documents issued to vendor is strictly confidential. Vendor should keep
them in safe custody. The information contained in the documents should not be divulged to any
other person(s )by vendor or copied. Vendor is solely responsible to prevent any possible
pilferage of these documents. Any violation by vendor of these instructions will make vendor liable
for penal action under section 3 and 5 of the official secrets act, 1923.

18. The drawings shall be the property of HAL and shall not be used for any other purpose other than
the purpose intended for without the written permission of HAL.

PARALLEL AGREEMENT/CONTRACT:

19. Nothing in this agreement/ contract precludes HAL Division from entering now or hereinafter into
any agreement/contract with others for manufacturing and supply of same or similar goods.

TERMINATION OF CONTRACT:

20. In the event of HAL Division being not satisfied with the performance of the vendor at any point of
time, in terms of either quality of machining or care of our material or delivery, also in case the
vendor indulges in malpractices, fraud, cheating etc HAL------ Division shall be entitled to
terminate the contract, after giving 30 days notice in writing to the vendor by registered post and
under this condition HAL Division will not be liable to pay any compensation whatsoever to the
vendor.

ARBITRATION:

21. Any dispute or difference which may arise relating to the construction, meaning and operation or
effect of this contact or the breach thereof this contract and cannot be settled in an amicable way
between the contracting parties shall be referred to the award of a sole arbitrator to nominated by
the Executive Director/General Manager, HAL Division and be settled by arbitration in accordance
with the rules of arbitration of the Indian council of arbitration and the award made in pursuance
thereof shall apply to such conciliation. The following matters, the decision of which is specially
provided by these conditions shall not be within the scope of arbitration. The arbitration
proceedings will be held at ________ (where Division is located)

JURISDICTION:

22. The courts of __________ (________ State) have the jurisdiction to deal with and decide any
legal matters or disputes whatsoever arising out of the contract including these arising under the
arbitration act.

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Procedure for Sub-Contracting of Tooling, Components & Assemblies

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