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Thursday, December 2, 2021

Reforms in public procurement bidding welcomed by infrastructure experts

Recent reforms introduced in Public Procurement and Project Management by Union Ministry of Finance have been welcomed by infrastructure experts. In particular, the approval for alternatives to the traditional L1 (lowest cost) method for selection of contractors, such as Quality cum Cost Based Selection (QCBS) method, in appropriate cases has met a long-standing demand.

Shri Vinayak Chatterjee, Chairman of CII’s National Council on Infrastructure, called the introduction of an alternative bidding method that also puts stress on quality and technical competence, as a major reform.

As per a PIB press release, Finance Secretary & Secretary Expenditure, Dr T.V. Somanathan released the latest guidelines on October 29 to usher in reforms in Public Procurement and Project Management. The formulation and release of these guidelines is a part of continuous process of review of existing rules and procedures

The draft of the guidelines was prepared under the aegis of the Central Vigilance Commission (CVC) after a detailed consultative process involving experts from various fields of public procurement and project management. The Department of Expenditure (DoE), Ministry of Finance, was nominated to issue the guidelines after soliciting and detailed consideration of the comments of Ministries/ Departments.

These guidelines attempt to incorporate into the realm of Public Procurement in India, innovative rules for faster, efficient and transparent execution of projects and to empower executing agencies to take quicker and more efficient decision in public interest.

Some of the improvements include prescribing strict timelines for payments when due. Timely release of ad hoc payments (70% or more of bills raised) is expected to improve liquidity with the contractors especially Micro, Small and Medium Enterprises (MSMEs).

As part of Government’s Digital thrust, Electronic Measurement Books have been prescribed as a means of recording progress of works. This system, along with other IT based solutions, proposed in the guidelines, will help in realising the dream of efficient Digital India, facilitate faster payments to contractors and reduce disputes.

Alternative methods for selection of contractors have been permitted, which can improve speed and efficiency in execution of projects. In appropriate cases, quality parameters can be given weightage during evaluation of the proposal in a transparent and fair manner, through a Quality cum Cost Based Selection (QCBS), as an alternative to traditional L1 system.

The Central Vigilance Commission (CVC), the Comptroller & Auditor General (CAG) and the National Institution for Transforming India (NITI) Aayog had carried out detailed analysis of the procedures and rules for public procurement and project management and had suggested changes in strategies to meet challenges of present and future public procurement.

One hopes that these new guidelines are applied not just at the national level, but also at state, district and municipal level. The condition of roads, pavements, flyovers and other public infrastructure in most cities and towns continues to be poor to average.

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