Proprietary Article Certificate (PAC)

A Proprietary Article Certificate (PAC) is an official document signed by a technically competent officer certifying that the item required for a government project is genuinely proprietary, available from only one source, thereby justifying procurement from that single supplier without open tendering.

What is a Proprietary Article Certificate?

Under GFR 2017 and CVC guidelines, competitive open tendering (NIT-based procurement) is the default for all purchases. Single source or limited tendering is an exception that must be formally justified. The PAC is that justification for proprietary items, items that are:

• Manufactured under a patent by one company
• Specifically designed for compatibility with existing government systems where no equivalent substitute exists
• Available from only one authorised dealer or OEM in India for a specific brand of equipment already installed

The PAC must state:

1. The name and description of the item
2. The sole source, the specific manufacturer or supplier
3. The technical reason why no other source or equivalent product exists
4. Confirmation that the purchase is in government interest
5. Signature of a technically competent officer (engineer, IT specialist, or domain expert) at an appropriate level

CVC has cautioned that PAC certificates are often misused to favour preferred vendors. As a result:

• PAC must be signed by a qualified technical officer, not just the procurement officer.
• The certifying officer must confirm in writing that no equivalent product is available.
• Internal review or committee approval is required for high-value proprietary purchases.
• PAC-based purchases should not be repeated without fresh justification; long-term requirements should trigger consideration of standardisation to alternative products.

For GeM procurement, the PAC equivalent is the government user's certification that the required product is only available from a specific catalogue seller, used before activating the Direct Purchase or Custom Bid on GeM.

Why PAC matters for Indian government suppliers

For suppliers of specialised proprietary products, software, precision instruments, OEM spare parts, patented chemicals, the PAC system is their primary route into government procurement outside open competition. When a government department needs your specific product (and only your product), a PAC enables a direct contract without tender. Conversely, competitors who claim their product is equivalent can challenge a PAC-based procurement at the CVC or CAG audit level, so the technical basis must be genuinely defensible.

Example

A state government hospital has installed an MRI machine from a specific manufacturer. The OEM's proprietary software upgrade is needed to extend functionality. The hospital's bio-medical engineer signs a PAC certifying that the software is proprietary to the MRI OEM, is not compatible with third-party alternatives, and no equivalent product exists for this specific machine model. The hospital procurement officer issues a direct purchase order to the OEM for INR 18 lakh for the software upgrade, citing the PAC as justification.

Frequently Asked Questions

Can a PAC be issued for annual maintenance contracts (AMCs)?

Yes. AMCs for proprietary equipment, where only the OEM has access to spare parts, firmware, and diagnostic tools, are commonly procured via PAC. However, where third-party service providers can demonstrably maintain the equipment, open tendering for AMC should be conducted.

Who can sign a Proprietary Article Certificate?

The PAC must be signed by a technically competent officer at an appropriate seniority level, typically a Junior or Senior Engineer, IT officer, or department head with domain expertise. The procurement or finance officer alone cannot sign; a technical signatory is mandatory.

Is there a value threshold for PAC-based procurement?

There is no absolute ceiling on PAC-based procurement value, but higher values attract greater scrutiny from CVC and CAG auditors. For PAC purchases above INR 5 lakh (threshold varies by department), internal committee review or CVO (Chief Vigilance Officer) prior approval may be required.

Can a tenderer challenge a PAC issued in favour of a competitor?

Yes. If a supplier believes a PAC was wrongly issued to support a competitor when equivalent products exist, they can file a complaint with the department's CVO, the Central Vigilance Commission, or, in extreme cases, seek judicial review. Wrongful PAC issuance can result in adverse audit findings and disciplinary proceedings.