Lucknow, June 27 (KNN) Taking a bold step towards improving quality of public procurement in the State , Uttar Pradesh Government has decided not to consider lowest bidder (L1) as a principal criteria for deciding tenders.

Experts have long raised their concern about using L1 as the major criteria in Public Procurement as unscrupulous suppliers crowd out better quality ones. 

UP Government has directed PWD, DMs and Commissioners that unrealistically low rate tenders would be cancelled in case the roads- whether in urban or rural areas, are damaged within two years.

The decision was taken after several complaints were made regarding the roads getting damaged within one year of its construction due to sub-standard materials used.

A provision has been made in the state that in case an extremely low rate is cited for a contract given "unhealthy competition" and the PWD feels this will be possible only for the contractor if he uses sub-standard material, the contract process can be scrapped after recording the reasons for the same.

The same rule would also apply if extremely higher rate is cited by a group of contractors.

The state's additional chief secretary, Sadakant, in a 28-point order issued on June 8, said that further to order issued in 2006, the no-criminal rule will apply to all contracts, not just those worth above Rs 1 crore as earlier.

Also the rule specifies that no criminal will be allowed to even bid for a contract. A list of blacklisted contractors will be made public in order to clean up the system.

Also, even if a 'clean' contractor bags a project but it is later alleged that he threatened other bidders, the contract will be cancelled if there is a concurring report from the district magistrate (DM) or police.

Each contractor will also need to submit a 'self-declaration' on an affidavit swearing that no criminal case exists against him, or there are any proceedings under the Gangster or Goonda Act.

As per the 2006 order, a DM is also supposed to issue a 'character certificate' to each contractor in his jurisdiction, certifying that he has no criminal case against him.

Now according to the new order these certificates will be reassessed immediately and every year from now on.

Quality comes at a price and the bitterness of poor quality is remembered long after the sweetness of low price is forgotten. This saying goes well with the tenders quoting lower prices by compromising on quality just to fit into the L1 bracket under Public Procurement Policy.

Unlike the procurement ethics followed by the foreign agencies in India, not even a single department in the country has the mandate to seek an explanation for quoting lower prices in the tenders. For example – cost of raw material used, wastage, production cost, etc.

But is it time now that the lowest-bidder-wins (L1) tender system be questioned.

For decades, most of the government departments as well as private firms have been unquestionably following the same method to procure goods from vendors.

After the tender advertisement appears in a newspaper inviting offers, a tender evaluation committee examines the various offers received and shortlists the vendors.

The lowest of these offers (L1) is selected and awarded the tender. But now with the government and public both focussing on quality, there has been criticism that instead of just awarding tenders to L1 category bidders, it must be awarded to bidders offering better quality and possessing higher technology.

And if anyone, the concerned officials or department goes for better technology or high grade quality over just L1, this might invite a lot of criticism from other bidders and even legal proceedings may be initiated. This in turn results into stalling of the tender.

L1 criteria no doubt gives an edge to small entrepreneurs bidding for a tender, but at the same time is misused by certain bidders to bag government works.

Thus, the saying by an expert that “Explaining higher price early is better than apologizing for quality later”, should be made applicable for bidders in government tenders which involves serious works impacting every common man. (KNN Bureau)