Pursuant to the Prime Minister's
Independence Day address regarding the introduction of a Public Procurement
Bill, the Department of Expenditure has prepared a draft Bill called 'The
Public Procurement Bill, 2011'.
The Bill is intended to regulate
public procurement by all Ministries and Departments of the Central Government,
Central Public Sector Enterprises (CPSEs), autonomous and statutory bodies
controlled by the Central Government and other procuring entities. The
objectives of the Bill are to ensure transparency, fair and equitable treatment
of bidders, promote competition and enhance efficiency and economy in the
procurement process. The Bill contains broad principles and will be
supplemented by rules. The Bill also provides for a grievance redressal
mechanism and for penalties for offences under the Bill.
Currently there is no overarching
legislation governing public procurement by the Central Government and Central
Public Sector Enterprises (CPSEs). The General Financial Rules, 2005 govern
procurements made by the Central Government. Some Ministries/ Departments have
specific procedures/ Manuals to supplement these Rules. Procurements by CPSEs
are governed by their own Manuals/ Procedures.
The Highlights of the Bill as
given by Department of Expenditure, Ministry of Finance are as follows:
Objectives
⊙ A legislation to regulate
public procurement by all Ministries and Departments of the Central Government,
Central Public Sector Enterprises, Autonomous and Statutory bodies controlled
by the Central Government and other procuring entities;
⊙ Ensuring transparency, fair and
equitable treatment of bidders, promoting competition and enhancing efficiency and
economy in the procurement process;
⊙ Ensuring highest standards of
transparency, accountability and probity in the public procurement process and
enhancing public confidence in public procurement.
Basic
Features
⊙ Contains broad principles and
provides flexibility for the variety of procuring entities to be covered.
⊙ To be supplemented by Rules for
procurement of Goods, Works and Services.
Separate sets of Rules for:
•
Procurements
for the purpose of national security
•
Entering
into Public Private Partnerships
•
Procurement
by Central Public Sector Enterprises
⊙ Exemptions from the law in
certain circumstances
⊙ Key transparency and
accountability norms incorporated from international best practices
⊙ Expeditious and streamlined
grievance redressal Procedure
Scope
and Coverage
⊙ To apply to procurements made
by:
•
Ministries
and Departments of the Central Government, their attached and subordinate
offices
•
Central
Public Sector Enterprises controlled by the Central Government
•
Central
Purchase Organisations of the Central Government
•
Constitutional
bodies whose expenditure is met from the Consolidated Fund of India
•
Any
body or Board or corporation or authority or society or autonomous body (by
whatever name called) established or constituted under an Act of Parliament
Statutory or controlled by the Central Government
•
Provision
for covering other entities by notification
⊙ No entities excluded from the
law; only certain circumstances deemed relevant for exclusion
⊙ Covers the procurement process
from the stage of needs assessment up to the award of the procurement contract.
Transparency
and Accountability
⊙ An accountable ‘needs
assessment’ process with all decisions and documents to be duly maintained
facilitating an audit trail
⊙ No restriction on participation
of bidders other than on specified conditions
⊙ Documentary record of
procurement proceedings mandated
⊙ Transparent methods of
registration and pre-qualification of suppliers respecting the need for fair
competition
⊙ Statutory backing for Integrity
Pacts between the procuring entity and participating bidders
⊙ Description of subject matter
of procurement to be objective, functional and generic with guidelines to be
prescribed
⊙ Standard terms and conditions
of contract to be prescribed
⊙ Criteria for evaluating bids to
be mandatorily published in the complete bidding document along with relative
weights attached; no changes permitted once published
⊙ No price negotiations except in
circumstances to be prescribed for which reasons to be recorded.
⊙ Establishment of an online
portal known as the Central Public Procurement Portal as a single information
window for all matters relating to procurement. Statutory requirement to publish
information regarding invitations to bid, names of competing bidders, excluded
bidders, debarred bidders, and award details.
⊙ E-procurement and e-payment
enabled
Procurement
Process
⊙ Essential contents of bidding
documents mandated
⊙ Sufficient time to be allowed
to prepare and present bids. Same time for all bidders.
⊙ Time bound reply to bidders’
request for clarifications. All clarifications
to be published on portal. Pre-bid
conference enabled
⊙ Modifications to bid documents
to be published in the same manner as original bidding document.
⊙ Accountable bid opening and bid
evaluation mechanism with separate 3-member Bid Opening Committee and Bid Evaluation
Committee, with provision for a Technical Evaluation Committee, in case
technical bids have to be evaluated separately
⊙ Standstill period of 10 days
after notification of successful bidder and before signing contract.
Diversity
of Procurement Methods
⊙ Open Competitive Bidding as the
preferred method of procurement
⊙ A wide range of alternative
methods available depending on the needs of the procuring entity and subject to
appropriate justifications being provided for their use
⊙ Competitive Negotiations,
Electronic Reverse Auctions and Framework Agreements facilitated by the Bill in
accordance with international best practices
⊙ For low-value procurements and
standard commercial items, three existing methods of procurement as per GFRs — purchase
through Rate Contracts, purchase without quotations and purchase by Purchase
Committees—continued.
Grievance
Redressal
⊙ A statutory de-centralised
three-tier framework for redressal of grievances arising under this Bill
established:
⊙ Reconsideration by procuring
entity
⊙ Grievance Redressal Committee
in the procuring entity, which shall act quasi-judicially
⊙ Judicial proceedings before the
appropriate High Court
⊙ For disputes relating to award
of contract in high-value procurements, in view of their relatively small
number and high importance, second tier redressal directly in High Court
⊙ For all other disputes, in view
of the large number of procuring entities and the need for de-centralised and expeditious
dispute resolution, three tier framework to be followed
Offences
and Penalties
⊙ Prevention of Corruption Act
applicable to offences by Public Servants
⊙ Corruption, collusion and
anti-competitive behaviour by bidders to attract appropriate penalties. Term of
imprisonment equal to that prescribed in Prevention of Corruption Act.
⊙ Provisions for debarment of
bidders:
•
Automatic
debarment on conviction for certain offences
•
Discretionary
debarment on conviction for less serious offences
•
Discretionary
debarment in addition to forfeiture of bid/performance securities. (Does not
require conviction)
⊙ All debarments to be notified
on the Central Public Procurement Portal
⊙ Appropriate penalties for
frivolous or vexatious applications for grievance redressal
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