Finance Ministry releases revised guidelines ushering in reforms in public procurement

The finance ministry on Friday released revised guidelines on public procurement and project management which outline innovative rules for faster, efficient and transparent execution of projects.

The guidelines also permit alternative methods for selection of contractors, which can improve speed and efficiency in execution of projects.

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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 the traditional L1 system, the ministry said.

Finance Secretary and Secretary Expenditure, T V Somanathan released the guidelines to usher in reforms in public procurement and project management here on Friday, a finance ministry statement said.

The formulation and release of these guidelines are part of the continuous process of review of existing rules and procedures.

"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," the ministry said.

Some of the improvements include prescribing strict timelines for payments when due. Timely release of ad hoc payments (70 per cent or more of bills raised) is expected to improve liquidity with the contractors, especially micro, small and medium enterprises (MSMEs), it added.

As part of the 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.

"Executing public projects on time, within the approved cost and with good quality has always been a challenge. As the pace of economic development steps up careful examination of procedures and rules is essential to ensure unwarranted roadblocks are removed and new innovations utilised for increasing value for money of the taxpayer," the ministry added.

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.

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.

Besides, Model Tender Documents (MTDs) for procurement of goods and non-consultancy services were also released on Friday as part of the continuous process of review of existing procedures.

MTDs specifically cater to needs relating to e-procurement thereby easing the process for adoption of e-procurement and furthering the ambition of convenient and efficient e-governance.

Such initiatives shall help in achieving the goal of Digital India by easing and standardising the digitisation process of public procurement.

These MTDs rationalise and simplify the structure of tender documents. Besides aligning provisions with various procurement policies of the government, like policies related to micro and small enterprises, preference to Make in

India and benefits to startups, MTDs incorporate national and international best practices.

The MTDs have been developed after a two-stage, extensive consultation with ministries/ departments/ central public sector undertakings, other organisations and individual experts, the ministry said