Para 5.8 — CONSULT_MANUAL

Risk Mitigation 1. Exceptions to an open tender process are abused, leading to single source processes. Rigorously follow the conditions under which open tendering can be dispensed with. 2. When short lists are used, the process of preparation of short lists may be non-transparent and all eligible firms may not be included, and some ineligible firms may get included. Registration of bidders/contractors: All major procuring Departments must keep a list of registered bidders for use in restricted tendering. Publicise even restricted bids on your website. Bidders for LTE/ SLTE may be transparently selected with the approval of CA. 3. Pre-qualification criteria: PQB has the potential of getting misused or being applied without considering the restrictive nature of competition. PQC should be relevant to the quality requirements, and neither be very stringent nor very lax to restrict/facilitate the entry of bidders. These criteria should be clear, unambiguous, exhaustive, and yet specific. Also, there should be fair competition. Lay down criteria when two stage tendering is warranted. Also lay down model PQC criteria for diverse types of procurements. 4. Invitation to tender (an open bid) is not well publicised or gives insufficient time, thereby restricting the number of bidders that participate. Publicity and adequate time for bid submission must be ensured. Require a higher-level approval for short bid submission period. 5. Evaluation criteria are not set from the beginning or are not objective or not clearly stated in the tender documents, thereby making them prone to being abused. Objective, relevant and clearly stated evaluation criteria must be specified in the tender document.

5.8 Bidding Invitation Process- Risks and Mitigations

1. To safeguard against a bidder withdrawing or altering its/ his bid during the bid validity period in the case of advertised (OTE and GTE tenders) or special limited tender enquiry Bid Security (also known as Earnest Money Deposit (EMD)) is to be obtained from the bidders along with their bids.

2. Normally in procurement of consultancy services, it is not a practice to ask for Bid Security. However, Procuring Entity has the option of requiring a bid security in time-critical procurements.

3. The bidders should be asked to furnish bid security along with their bids57.Amount of bid security should ordinarily range between two (2) to five (5) per cent of the estimated value of the services to be procured. The amount of bid security, rounded off to the nearest thousands of Rupees, as determined by the Procuring Entity, is to be indicated in the tender documents. The procuring Entity may, if considered justified, stipulate an upper ceiling on the bid security amount, in larger tenders, so as not to restrict competition.

4. Form of Security: The bid security may be obtained in the form of Insurance Surety Bonds58,account payee demand draft, or banker's cheque or Bank Guarantee (including eBank Guarantee)59 issued/ confirmed60 by any of the Scheduled Banks (as defined in section 2

(e) of the RBI Act 1934) or payment online in an acceptable form, safeguarding the purchaser’s interest in all respects. In case the bid security is more than a threshold (Rupees five lakh) and in case of foreign bidders in GTE tenders it may be in the form of a bank guarantee (in equivalent Foreign Exchange amount and must conform to the Uniform Rules for Demand Guarantees (URDG 758) – an international convention regulating international securities61) issued/ confirmed by any of the scheduled bank in India in an acceptable form. The bid security is normally to remain valid for a period of 45(forty-five) days beyond the final bid validity period.

5. In place of a Bid security, Procuring Entities after seeking approval of the competent authority may consider asking Bidders to sign a Bid securing declaration (BSD), accepting that if they withdraw or modify their Bids during the period of validity, or if they are awarded the contract and they fail to submit a performance security, or to sign the contract, before the deadline defined in the tender documents, they shall be suspended for the period of time specified in the BSD from being eligible to submit Bids/Proposals for contracts with the procuring entity.

Chapter 6: Forms of Securities, Prices, Payment Terms and Price Variations 6.1 Forms of Security 6.1.1 Bid Security (Rule 170 of GFR 2017)

Chapter 6: Forms of Securities, Prices, Payment Terms and Price Variations 6. In appropriate cases, Submission of the bid security may be exempted with the Competent Authority’s (CA’s) approval, especially in the case of indigenisation/development tenders, limited tenders, and procurements directly from the manufacturer or authorised agents, bidders that are currently registered (firms should normally be registered for the particular trade group (group of services) and monetary values, as decided by the procuring entity), and will also continue to remain registered during the bid validity period with the concerned Ministry/ Department/ Procuring Entity. Micro and Small Enterprises (MSEs) as defined in MSE Procurement Policy issued by Department of Micro, Small and Medium Enterprises (MSME) and registered Startups as recognized by Department for Promotion of Industry and Internal Trade (DPIIT) (please refer to para 1.10.4) are exempt from payment of EMD. In case the bidder falls in these categories, the bidder should furnish a certified copy of its valid registration details.

7. A bidder’s bid security shall be forfeited if the bidder withdraws or amends its/his tender or impairs or derogates from the tender in any respect within the period of validity of the tender or if the successful bidder fails to furnish the required performance security, or to sign the contract within the specified period.

8. Bid securities of the unsuccessful bidders should be returned to them at the earliest after expiry of the final bid validity period and latest by the 30th day after the award of the contract. Bid security should be refunded to the successful bidder on receipt of a performance security. However, in case of two packet or two stage tendering, Bid securities of unsuccessful bidders during first stage i.e., technical evaluation etc. should be returned within 30 days of declaration of result of first stage i.e., technical evaluation etc.62