Public Procurement Bill

The government unveiled the draft public procurement bill which backs the idea of open competitive bidding as the preferred method of procurement. Currently, there is no overarching legislation governing public procurement by the central government and central public sector undertakings. The general financial rules, 2005 govern procurements made by the government while some ministries/departments have specific procedures/ manuals to supplement these rules. Procurements by central public sector undertakings are governed by their own manuals and procedures. Prime Minister Manmohan Singh in his Independence Day address had promised to introduce a Public Procurement Bill in Parliament to ensure transparency and shut out corruption in government procurement. The UPA government has been on the back foot over a slew of corruption charges involving large government contracts. Investors have also been urging for transparency in public procurement. The bill is intended 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. The draft bill has been put on the finance ministry’s website for public comments and it would be open until December 24, 2011. “The objectives of the bill are to ensure transparency and equitable treatment of bidders, promote competition and enhance efficiency 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,” the draft bill said. It covers the procurement process from the stage of needs assessment up to the award of the procurement contract. Criteria for evaluating bids to be mandatorily published in the complete bidding documents along with relative weights and no change would permitted once it is published. No price negotiations except in circumstances to be prescribed for which reasons to be recorded, the draft bill says. A central public procurement portal would be set up for all matters relating to procurement. The bill refers to e-procurement and e-payment. Corruption, collusion and anti- competitive behaviour by bidders to attract appropriate penalties. Term of imprisonment equal to that prescribed in Prevention of Corruption Act. Automatic debarment on conviction for certain offences and discretionary debarment on conviction for less serious offences. All debarments to be notified on the central public procurement portal, it said.