CVC Guidelines Issuance of Tenders

Mrinal Kumar and Shruti Garg of Amarchand & Mangaldas analyse the Central Vigilance Commission Acts guidelines on issuance of tenders, with an aim to instill confidence in the eyes of the public and in public interest..The reported irregularities in the procurement of various goods and services by the Organising Committee of the Commonwealth Games 2010, has again bought into limelight the need for the adequacy of laws in India, to check the misuse of funds of the exchequer especially in cases of public procurement. As per the news reports, the Central Vigilance Commission is in the process of examining the bid documents of several projects that have been executed by the Organising Committee, as irregularities have been reported in the cases of award of contracts. Such incidents time and again compel us to ponder about the sufficiency of laws in relation to the procurement of goods and award of works by any instrumentality of state..Laws have been enacted in India, that specifically address the issue of corruption and have been enacted with the intent to prevent corruption, especially where public money is involved. Furthermore, in recent years a number of international conventions and national legislations have sought to address the issue of corruption. India has enacted the Prevention of Corruption Act, 1988 which seek to prohibit the receipt of any gratification other than legal remuneration in respect of an official act by a public servant. Also, the Central Vigilance Commission Act, 2003 has been enacted for providing a mechanism for the conduct of inquiries alleged to be committed in violation of the Prevention of Corruption Act, 1988. Moreover, since issuance of tenders by the public bodies for procurement of goods or services or award of work is a sensitive issue, the Central Vigilance Commission has issued guidelines on tenders i.e. procurement of works, goods and services (Guidelines). The Guidelines has been framed with an intent to guarantee transparency at all levels of the issue of tender document i.e. preparation of tender document, inviting and opening of tender, pre-qualification, evaluation of bids and the receipt of tender..With respect to the issuance of tenders by the Government or instrumentality of state, the Guidelines stipulate that notifications for the tender must be advertised in well known dailies having circulation in the locality with all relevant details, with an objective to give fair opportunity to all concerned. Further, the complete bid document must also be published on the website of the organisation..More so, the Supreme Court in the case of Nagar Nigam, Meerut vs. Al Faheem Meat Exports Private Limited has categorically held that that the contracts by the Government or by an instrumentality of state should be granted only by public auction or by inviting tenders, after advertising the same in well known newspapers having wide circulation, so that all eligible persons will have opportunity to bid in the bid, and there is total transparency..The Guidelines further stipulate that pre-qualification, evaluation and exclusion criteria that the organisation seeks to follow must be made explicit at the time of inviting tenders so that the basic concept of transparency, equity and fairness are satisfied. Further, it is recommended for all such organisations to follow two- bid evaluation criteria, i.e. technical bid and price bid. It is emphasized that the price bid must be opened for only those vendors who are technically qualified. Such organisation also does not have the right to reject any bid arbitrarily without assigning any reasons. Clear, logical reasons for all such rejections must be recorded..The most important aspect of the Guidelines is its emphasis for the issuing organisation to adopt ‘integrity pact’, which includes inter alia the assurance to not to resort to any corrupt practice including the receipt of any illegal benefit, to treat all bidders with equity and reason, maintain confidentiality etc. It is suggested that adoption of ‘integrity pact’ must be made mandatory in all cases of public procurement by any instrumentality of state. Also the Guidelines must restrict the tenure of the people heading such organisations to a fixed duration..What more, the Central Vigilance Commission has even launched a helpline to report cases of any irregularities and corruption. The intent behind these endeavours is to ensure that all official acts must be actuated by the public interest, and should inspire public confidence. However, compliance and enforcement of the same remains a big challenge. Its time that strict punitive actions must be contemplated against all those responsible for the embezzlement of public money..Mrinal Kumar is a Principle Associate and Shruti Garg is an Associate at Amarchand & Mangaldas & Suresh A. Shroff & Co.