There is a growing trend in a number of developing nations, for the establishment of a central body, like the DGS&D to formulate overall government policy and to provide central guidelines, especially for items of general use.
Aspects covered by the central policy include supply sources, tenders, contracting procedures, financial control, stores regulations, and standard instructions. The advantages of a central purchase organisation like DGS&D are listed as follows:
1. Formulation of uniform coordinated policies and plans.
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2. Development and maintenance of material specifications.
3. Consolidation and administration of purchase policy and procedure manuals.
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4. DGS&D acts as a model power for other purchase organisations.
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5. Effective inspection as per national/international standards.
6. Joint inspection of material with the user having right of rejection of substandard items.
7. Long term materials planning as an integral part of the national planning process.
8. Bulk purchasing to take advantage of price rebates and special discounts.
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9. Consolidated global market research to establish competitive sources.
10. Evolving a consolidated inventory control system.
11. Reliability of the firm as registered with the DGS&D.
12. Conformity of the offers to required specifications.
13. Better interaction with industry.
14. Price preferences for small scale industries.
15. Standard set of terms for acceptance of tenders.
16. Exclusive reservation for small scale industries.
17. Elimination of foreign sources and development of indigenous capabilities.
18. Rate contract of DGS&D is used by several government organisations.
19. Delivery period offered for the execution vis-a-vis requirement of vendor.
20. Lowest cost of procurement due to bulk purchases.
21. Provision of facilities on expertise of purchasing.
22. Establishment and administration of a central cost control system.
23. Generalisation and public relations services.
24. Uniform negotiations for purchase and service.
25. Development and maintenance of material specifications.
26. Common management service like work simplification, electronic data processing.
27. Efficient payment to all contracts.
28. Rate contract of DGS&D is used by several government organisations.