Indian Railway Codes and Manuals-Stores code- Vol-II-Chapter-22 (XXII)
CHAPTER
XXII
SURPLUS STOCKS
Prevention
of stocks from becoming Surplus
2201. Important changes in the design of plant and equipment
the introduction of new standards or procedure in the place of old and the
scrapping of plant for which there are stocks of spares are amongst the factors
contributing to accumulations of obsolete or unusable material. The procedure
detailed below she rid be followed in order to keep the Controller of Stores
loss informed of all such events and enable him to minimize such accumulations
and consequent loss to the administration
2202. Surplus due to Change in Design and Standards.—Before
any new standards introduced the consuming department should submit to the
Controller of Stores an "Advice of Proposed Changes in Design/Standard of
Stores/Procedure" in (manuscript) Form S. 2202 and obtain from him the
particulars of the old standard materials in stock.
2203. The form is in the three parts as shown above. Three
copies of the form should be prepared with portion "A" only filled in
and all the copies should be sent to the Controller of Stores who should fill
in the required information in the columns provided in part "A" of
the form, complete part "B" and return all the copies to the
department concerned.
2204. Estimate of Loss.—On receipt of the information
(Form S. 2204 with part "B" filled in), from the Controller of
Stores, estimates should be prepared by the department concerned showing the
probable loss to the railway involved in postponing the introduction of the new
standard proposed till existing stocks are exhausted and alternatively of the
probable loss involved in scrapping the existing stocks. These estimates along
with two out of the three copies of the Form S. 2202 originally sent to the
Controller of Stores should be sent to him again. He should check the loss
involved in scrapping the existing stock, seeing that other items are not
incidentally involved, and also examine whether there are possibilities of
reducing the loss by the disposal of the material to other railways.
2205. Where the Controller of Stores accepts the date
proposed for the introduction of the new standard, he should intimate this to
the department concerned to enable the latter to issue the orders for the
proposed changes. The Controller of Stores should at the same time take
necessary steps to regulate future purchases of the article concerned, and
arrange to obtain the sanction of competent authority for any loss involved in
the proposed change.
2206. Where the Controller of Stores is unable to agree
with the consuming department that the dates of making the proposed changes are
in the best interests of the railway as a whole, he should submit his reasons
to the General Manager for final decision.
2207. Until the consuming department forwards its final
orders on a proposed change, new standards in substitution for the old should
not be stocked by the Stores Department nor should any further purchase of the
existing article be made.
2208. Surplus Spares die to Replacements of Rolling stock,
Plant or Machinery.—When budgets are under preparation involving the
replacement of old rolling-stock, plant or machinery lists of the equipment to
be replaced should be submitted to the Stores Department as early as possible.
The Stores Department should prepare a statement of the spare parts in stock
for the equipments and refer to the consuming departments to ascertain whethei
these spare parts will become obsolete or can be used on other similar
equipment. As soon as the details of spares to be scrapped have been fixed, the
Stores Department should prepare a financial statement showing the funds to be
provided in the budget for the loss involved in scrapping such material.
2209. At the time of actually replacing or scrapping such
rolling stock, plant or machinery, & c. a manuscript "Advice to Write
off spares" should be prepared in triplicate ia Form S. 2209, and sent to
the Controller of Stores.
2210. The Controller of Stores should fill in the quantity
and value of spares or fittings which are in stock and return all the copies to
the departmental officer concerned. The value of such spares should be included
in the estimate for replacement and on sanction of the estimate, two copies of
the form with particulars of the estimate should be sent again to the Controller
of Stores.
2211. When orders for new plant have been placed, the
Controller of Stores should fill in the probable date of its arrival and send
one copy of the form to the depot concerned with instructions for the disposal
of the spares and fittings. When the old plant is scrapped and sent to the
auction yard, spares and fittings should normally be sent with it; if however,
the plant is transferred for use elsewhere, the spares and fittings should be
kept in stock.
2212. In cases where the spares are scrapped along with the
plant, the difference between the original book value and the scrap value
should be debited to the estimate for the replacement of the rolling-stock,
plant or machinery. When the spares are actually sold later on, no further
adjustment against the estimate need be made whether the articles fetched over
or below the scrap rate.
2213. Cancellation of orders for Material for Specific Works.—If,
on account of charges in plant or specification, or the dearth of funds,
materials obtained for a work, or for which a requisition has been placed will
not be required, the indentor should notify the Controller of Stores at once in
manuscript Form S. 2213, three copies of which should be forwarded through the
divisional or district officer concerned.
2214. If the railway is not actually committed to the
purchase, the Controller of Stores should at once take steps to cancel any
arrangements made, returning one copy of the form to the indentor through his
divisional or district officer stating that the order has been cancelled. If
the supply of materials has already been received or the railway is committed
to the purchase, the Controller of Stores should return one copy of the form to
the indentor through his divisional or district officer stating the rate
(whether full or part or scrap) at which the Controller of Stores is prepared
to take the material into stock after its original purchase cost has been
debited to the department which indented for the stores. The third copy of the
form •should be sent by the Controller of Stores to the depot which should
stock the material.
2215. In case the divisional or district officer or head of the
department concerned decides in favour of the changes in design & c.
proposed by him, notwithstanding the loss involved thereby, he should accept
the loss as a debit to the work for which the material was obtained, the
sanction of the competent authority being obtained to the additional
expenditure involved.
2216. Definition of Surplus Stocks.—The procedure
prescribed for the preparation of Contract Estimates of stores for purchase in
Chapter VI and in paragraphs 1414 to 1437 should act as a deterrent to any
accumulation of stocks beyond the ordinary requirements of the railway. Purely
temporary excesses over immediate or estimated requirements are not really
surpluses, so long as they can be worked out by issues over a comparatively
short period of time. Stores may be considered as really surplus to the
requirements of the railway only if they have not been issued for a long time.
Even amongst such items there may be some which it is known could be utilized
for the purpose of the railway in the near future, and these may be with
advantage be distinguished from the surplus stores which cannot be so consumed.
2217. An essential prerequisite condition to declare any
items of stores as "surplus" stock on railways is that such items
have not been issued from stock for railway consumption, for a period of two
years. Such "surplus" stock should be further classified under two
heads viz.,
(a) movable surplus and
(b) dead surplus, the definitions of which have been given in paragraph 118,
and are reproduced below for facility of reference.
2218. Movable Surplus.—Comprise items of stores which have
not been issued for a period of 24 months but which it is anticipated will be
utilized in the near future. Such items should be marked in the Price Lists.
2219. Dead Surplus.—Comprise items of stores which have not
been issued for the post 24 months and which it is considered are not likely to
be utilized on any railway within the next two years. No article, may, however,
be classified as "dead surplus" unless it has been duly inspected by
a Survey Committee, vide paragraph 2222 and declared as such. Such items should
be marked in the Price Lists.
2220. Emergency Stores not Surplus.—There are items which
do not ordinarily wear out, or require renewal and stocks of which are not
readily obtainable in India, but which it is essential to maintain to meet
occasional emergencies. Amongst such items may be mentioned spare parts and
duplicates of electrical machinery to be maintained for emergent use in case of
failure. Such stores are emergency stores and though not issued for period of
two years or more, should not be classed as surplus stores.
Survey Committees
2221. Functions of Sumy Committees.—A Survey Committee
should be formed on each railway for the purpose of inspecting critically the
condition of all the stores.—
(1) that have deteriorated in value, for any reason.
(2) broken or damaged in transit, or while in stock.
(3) lying in the custody of the Stores Department for a long time and
considered by
the Controller of Stores as having become unserviceable owing to obsolescence
of other causes, and
(4) received as scrap from the line.
2222. The Committee should determine after such inspection—
(a) what stores held in the depots should be treated as Dead Surplus Stores or
as scrap,
(b) what stores should be classified and rate second-hand
(c) at what rates and values such stocks should be held in the accounts books,
and
{d) how such stores shcul4 be disposed of i.e. by sale or by issue to
particular uses of particular departments, & c.
2223. (a) No stores in stock should be reclassified and
rated second-hand or scrap without the sanction of the General Manager obtained
on the recommendations of the Survey Committee. However, Controller of Stores
may, on the recommendation of the Survey Committee, reclassify stores in stock
and rate them second-hand or scrap up to a limit of Rs. 25,000 per item, this
limit being applied with reference to the book value of the item before
reclassification. The power delegated to the COS may by redelegated to the Dy.
COS & Depot Officers up to a limit of Rs. 10,000 per item and Rs. 1,000 per
item respectively.
(b) Depot Officer may also reclassify stores in stock & rate them 'Second
hand' or 'scrap' without processing the same through Survey Committee upto a
limit of Rs. 1,000 per item. However, before classifying an item costing upto
Rs. 1 000 as dead surplus, the Depot Officer should where considered necessary
ascertain from the user departments and other depots that the item is not
likely to be utilised by them in the next two years.
2224. No sale by auction of any article of whatever
category in the depot, and no sale of scrap by private treaty (subject to the
exception stated in paragraph 2408) should be made unless the article has been
recommended for sale by the Survey Committee.
2225. Composition of Survey Committees.—The Committee which
should be appointed by the General Manager, will consist of the heads or the
Senior Officers of the consuming departments of branches with a Secretary
nominated by the General Manager who will be an officer of a department other
than the Stores Department.
2226. Meetings of Survey Committees.—The Committees should
meet not less frequently than once in a half year, at the request of the
Controller of Stores or the Depot Officer who should arrange to collect and
list the articles to be surveyed.
2227. Survey Sheets.—Separate lists of the articles should
be made out in quadruplicate, group by group, in the form shown below
ere state briefly haw stores become obsolete,
surplus, & c.
The Committee should, after the most careful investigation, have their
recommendations recorded by the Secretary against each of the items on all the
copies of the list, both as regards prices and the manner of disposal. The
Secretary of the Committee should initial each such recommendation and the
members of the Committee including the Secretary, should sign all the copies of
the list.
2228. General Manager's sanction.—The Survey Committee's
report should be submitted by the Depot Officer to the Controller of Stores.
The Controller of Stores will deal with the items falling within his powers and
obtain orders of the General Manager for the others. The orders of the General
Manager/Controller of Stores should be communicated to the stores Accounts
Officer, the Statutoiy Audit Officer and the Depot Ofiflcer and prompt Faction
should be taken to implement them.
2229. Revaluation of Undisposed of Items.—Such surplus
stores as are not disposed of by sale, transfer of issue within twelve months
of the recommendation of the Survey Committee should be classified as scrap and
the book value adjusted in accordance with the rules.
OVER-STOCKS
OF "ORDINARY STORES'
2230. The maximum stock that may be held, at any time,
of ordinary stores in stock (other than surplus stores and emergency or special
stores) should not ordinarily exceed 50 per cent of the issues of each item
during the year. This limit is applied only to 'ordinary stores'. It should be
the objective of every Controller of Stores to see that the stocks on hand of
all items of 'ordinary stores' are maintained well within this limit. But
inspite of the best of plans, overstocks of 'ordinary stores' develop which
have also to be reduced in the best manner possible.
2231. Factors responsible for Overstocks of Ordinary
Stores.—Amongst the factors that tend to increase balances may be mentioned :
(1) An unanticipated falls in consumption which it has been impossible to
off-set by smaller purchases, owing to contractual obligations on the basis of
annual contracts, and
(2) Stores returned by consuming departments in
larger quantities than anticipated.
2232. These factors should be particularly taken into
account in preparing the Annual Contract Estimates (S. 603).
DISPOSAL
OF OVER-STOCK AND SURPLUS STOCKS OF STORES
2233. Surplus stock Section.—The Stores Department of every
railway should be organized to deal effectively with the disposal of surplus
stock either by sale or issue, or transfer to other railways. The section of
the office dealing with this work corresponds to the sales organization of a
commercial concern. It should be in active touch, not only with the stocks of
the different items of surplus stores, but also with markets and market prices
(if any such exist) for the articles in question.
2234. Selection of items for Sale.—The 'Grouping Forms' (S. 610)
prepared, as explained in paragraphs 611 to 616 for the purpose of estimating
the items and quantities for which annual contracts should be let contain
particulars of all those items of ordinary stores (Stock items) for which there
have been no demands for purchase either during the current contract or the new
contract periods or both. As stated in paragraph 623, the Grouping Forms (S.
610) for such items will be sent to the Surplus stock Section for disposal. The
average time lag between the date of the preparation of the estimates of the
annual requirements of each class of stock and the end of the new contract
period being about 18 months, the stocks of such stores for which no demands
for purchase have been made for one or more contract periods are really in
excess of the requirements of the railway, and the surplus Stock Section should
take all steps necessary to reduce such stocks, if possible, by sale to other
railways who may be requiring them, during the new contract period. As the
estimates for annual purchases for each item of stores will be made, by all
railways, on or about the same date, the time would be opportune for the
section to collect and offer such items for sale to other railways.
2235. "Over-stocks" Disposal Register.—A register
in the form shown below should be maintained for recording the quantities of
over-stocks of "ordinary stores" which it has been considered
desirable to sell or dispose of during the next 12 months. This register should
be posted from the "Grouping Form" (S. 610) for the items of
"ordinary stores" concerned.
2236. Register of Non-stock Items.—The Surplus Stock
Section should not only try, in this manner, to dispose of the over-stocks of
"ordinary stores", but should make use of the same opportunity to
dispose of the stock of "movable" and "dead surplus"
stores, detailed information about which would be available in the Statement of
Non-stock items (S. 609) submitted by the depots from which a register (S.
2236) similar to Form S. 2235 should be posted. The items classified as
"movable surplus" will be generally "stock items" for other
railways and the best time for offering them for sale is that at which railways
make up estimates of their requirements of the class of articles to which the
item belongs.
2237. Disposal to Other Railways and Government
Departments.—The Surplus Stock Section should scrutinize every public call for
tender, stores, bulletins and Home indents issued by other railways, the
Directorate General of Supplies and Disposals or any other Government
Department or public body, and in addition examine advertisements in papers
such as the Indian Trade Journal in order to discover suitable opportunities of
effecting the sales of surplus stores and over-stocks. When such occasion
arises suitable offer may be made for sale.
2238. Deleted.
2239. The sales will be affected by means of sales orders
(S. 2334) duly sanctioned by competent authority. The sanction should be
communicated by the sanctioning authority direct to the Accounts Officer, copy
being furnished to the Audit Officer also.
2240. Invitation to Tender for purchase of Surplus Stores &c.—The disposal
of overstocks and surplus stores may also be made by advertising invitations to
submit tenders to the Railway for the purchase of such stores, in the most open
manner possible.
The detailed procedure for such a method of disposal is laid down in paragraphs
2320 to 2324.
Multiple choice questions:
Question
1
Which of the following factors
contributes to the accumulation of obsolete or unusable material in a railway's
stores?
a) Important changes in the design
of plant and equipment
b) The introduction of new standards or procedures
c) The scrapping of plant for which there are stocks of spares
d) All of the above
Answer: d) All of the above
Question
2
Before introducing any new
standards, what form should the consuming department submit to the Controller
of Stores?
a) Form S. 2201
b) Form S. 2202
c) Form S. 2203
d) Form S. 2204
Answer: b) Form S. 2202
Question
3
How many copies of Form S. 2202
should be prepared and sent to the Controller of Stores?
a) One
b) Two
c) Three
d) Four
Answer: c) Three
Question
4
Who is responsible for estimating
the probable loss to the railway involved in postponing the introduction of a
new standard until existing stocks are exhausted?
a) The Controller of Stores
b) The General Manager
c) The department concerned
d) The Survey Committee
Answer: c) The department concerned
Question
5
If the Controller of Stores is
unable to agree with the consuming department about the dates for making
proposed changes, to whom should he submit his reasons?
a) The divisional officer
b) The district officer
c) The General Manager
d) The head of the department
Answer: c) The General Manager
Question
6
What should the Stores Department do
when budgets involving the replacement of old rolling-stock, plant, or
machinery are under preparation?
a) Submit lists of the equipment to
be replaced
b) Prepare a statement of the spare parts in stock
c) Ascertain whether the spare parts will become obsolete or can be used on
other equipment
d) All of the above
Answer: d) All of the above
Question
7
What form should be prepared in
triplicate and sent to the Controller of Stores at the time of actually replacing
or scrapping rolling stock, plant, or machinery?
a) Form S. 2201
b) Form S. 2204
c) Form S. 2209
d) Form S. 2213
Answer: c) Form S. 2209
Question
8
Who should fill in the quantity and
value of spares or fittings in stock when Form S. 2209 is received?
a) The department concerned
b) The General Manager
c) The Controller of Stores
d) The Survey Committee
Answer: c) The Controller of Stores
Question
9
If materials obtained for a work
will not be required due to changes in plant or specifications, who should be
notified at once?
a) The General Manager
b) The divisional or district officer
c) The Controller of Stores
d) The Survey Committee
Answer: c) The Controller of Stores
Question
10
What are the classifications for
surplus stock on railways?
a) Active surplus and inactive
surplus
b) Movable surplus and dead surplus
c) Temporary surplus and permanent surplus
d) Issued surplus and unissued surplus
Answer: b) Movable surplus and dead surplus
Question 11
What is the primary purpose of forming a Survey Committee on each railway?
a) To manage financial statements
b) To inspect the condition of all stores
c) To prepare budgets
d) To sell surplus stores
Answer: b) To inspect the condition of all stores
Question 12
Which of the following is NOT a function of the Survey Committee?
a) Inspect stores that have deteriorated in value
b) Inspect stores broken or damaged in transit
c) Inspect stores that are in high demand
d) Inspect stores received as scrap from the line
Answer: c) Inspect stores that are in high demand
Question 13
What should the Survey Committee determine after inspecting the stores?
a) Which stores should be treated as Dead Surplus or scrap
b) Which stores should be classified and rated as second-hand
c) The rates and values at which stocks should be held in the accounts books
d) All of the above
Answer: d) All of the above
Question 14
Who can reclassify stores in stock and rate them second-hand or scrap up to a limit of Rs. 25,000 per item?
a) General Manager
b) Controller of Stores
c) Depot Officer
d) Survey Committee
Answer: b) Controller of Stores
Question 15
Up to what limit can a Depot Officer reclassify stores in stock and rate them as 'Second hand' or 'scrap' without processing through the Survey Committee?
a) Rs. 1,000 per item
b) Rs. 10,000 per item
c) Rs. 25,000 per item
d) Rs. 50,000 per item
Answer: a) Rs. 1,000 per item
Question 16
Who should recommend the sale of any article in the depot before it is sold by auction?
a) General Manager
b) Survey Committee
c) Controller of Stores
d) Depot Officer
Answer: b) Survey Committee
Question 17
How frequently should the Survey Committees meet?
a) Once a month
b) Once in a quarter
c) Once in a half year
d) Once a year
Answer: c) Once in a half year
Question 18
What should be done with surplus stores not disposed of within twelve months of the recommendation of the Survey Committee?
a) They should be kept in stock
b) They should be reclassified as scrap
c) They should be donated
d) They should be given away
Answer: b) They should be reclassified as scrap
Question 19
What is the maximum stock that may be held of ordinary stores in stock at any time?
a) 25% of the issues during the year
b) 50% of the issues during the year
c) 75% of the issues during the year
d) 100% of the issues during the year
Answer: b) 50% of the issues during the year
Question 20
What is one of the factors responsible for overstocks of ordinary stores?
a) Increased demand for the stores
b) Unanticipated fall in consumption
c) Regular purchases
d) Efficient stock management
Answer: b) Unanticipated fall in consumption
Question 21
What should the Surplus Stock Section be in active touch with?
a) Markets and market prices
b) Local businesses
c) Railway employees
d) Government departments
Answer: a) Markets and market prices
Question 22
How should surplus stock and over-stocks be disposed of to other railways or government departments?
a) By selling in local markets
b) By advertising in newspapers
c) By scrutinizing public calls for tender
d) By direct negotiations with suppliers
Answer: c) By scrutinizing public calls for tender
Question 23
Who should approve the sales orders for surplus stocks?
a) Depot Officer
b) Survey Committee
c) Competent authority
d) General Manager
Answer: c) Competent authority
Question 24
How can the disposal of overstocks and surplus stores be advertised?
a) By issuing press releases
b) By inviting tenders
c) By hosting public auctions
d) By using social media
Answer: b) By inviting tenders
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