Recently, the Supreme Court expressed its anguish over array of litigations against the award of tenders which are being challenged in writ proceedings as a daily routine.
What is Public Procurement?
In simple words, Public Procurement is the process by which the Government procures goods and services from the private entities and in return pays them in monetary terms for the goods and services rendered by them.
What is the basic underlying principle of India’s Public Procurement regime?
India’s regulatory and institutional framework seeks to ensure responsibility, accountability and efficiency in the public procurement regime. The underlying principle is to procure materials/services of specified quality at the most competitive prices in a transparent and non-arbitrary manner.
How does the government conduct public procurement?
What is the Legal Framework adopted in India for Public Procurement?
What are the issues in the Public Procurement System in India?
It has resulted in heterogeneous procedures and multiplicity of rules across the procuring entities. Many times, undertaking comprehensive actions against the stakeholders involved in unfair practices become challenging in the absence of a strong legislation
In spite of the initiatives for standardizing the bid documents and code of contract following the international agencies such as IMF and the World Bank, there continues to be a multiplicity of bid documents across the entities in terms of addition/rephrase/repetition of clauses/provisions. Such ambiguities and contradictions in the bid documents stand against the principles of standardization, transparency, and accountability.
The procurement process is often delayed in the stage of need assessment, budget preparation, and approval. Similarly, unavailability of sufficient procurement professionals and non-realization of the required information usually appear responsible for the delay in preparing the technical specifications.
Despite the procedural safeguards, corruption level in India is perceived to be high in recent years leading to low quality of public services which ultimately hampers the development process.
The existence of anti-competitive practices by the bidders’ community tends to hamper the procurement process by negating the best value of money. Competition issues in India mainly concern with collusive bidding, bid rigging, cartelization, and abuse of dominance.
Despite the MSEs provisions, the participation of domestic MSEs in the public procurement activities remains low in India. Apart from resource related entry barriers including anti-competitive elements, many MSEs do not also take part in public procurement due to a perception that government procuring entities often delay in releasing the contract payments.
India does not have an Independent Grievance Redressal Mechanism in the procurement system. At the first tier, an aggrieved bidder files complaints on the irregularities to the concerned officials of the procuring entity. However, the judgement lacks credibility as the authority is from the procuring entity itself that is responsible for causing grievance.
The present study assesses the public procurement system and recent reform initiatives in India and outlines the need for changes in the institutional framework. The current system appears to be complex due to heterogeneity in the requirements in the federal structure of the government functioning and absence of a comprehensive procurement Act. The system suffers from some serious drawbacks such as fragmented procedures and rules, lack of standard bid documents, unavailability of sufficient procurement professionals, lack of transparency, widespread corruption, and lack of independent grievance redressal mechanism. Hence, these need to be backed by legislative power, and Draft Bill 2015 should be enacted with revisions in certain areas.
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