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Para 4.2.2 - Risk Mitigation | KartavyaDesk

Goods Manual

Original Rule Text

Risk Mitigation 1. The crux of this mode of procurement is attracting bids from all possible prospective bidders. The risk is that this may not be achieved, even after incurring the extra cost of open tendering. This could be due to a) Insufficient publicity; b) Hindrances in the availability of tender documents; c) insufficient time for bid preparation or d) Due to the onerous cost of tender documents or EMD It should be ensured that the NIT on the website is easily searchable and visible, not hidden under layers of clicks. The matter should not be left entirely to the website or media publicity alone. Due diligence should be done to locate likely bidders. All registered vendors/contractors (in particular past successful vendors/contractors) should be given intimation about forthcoming tenders via SMS/mail/ email. Further, a limited or open tender that results in only one effective offer shall be treated as a single tender enquiry situation, with relevant powers of approval, etc. It should also be ensured that there is no impediment to the issue/access of tender documents. Ordinarily, the due date fixed for the opening of the tender shall be a minimum of 21 (twenty-one) days from the date of advertisement, which may vary, considering the nature of the material called for and delivery requirements. The due date may be subsequently extended with the approval of the CA only if it is felt necessary to have better competition. The tender documents shall be priced minimally (if at all priced, refer to para 5.2.1 - Availability and Cost of Tender Documents), keeping in view the value of the tender as well the cost of preparation and publicity of the tender documents. EMD should be sufficient to ensure that bidders honour their bids but, at the same time, should not be large enough to reduce competition.

What This Means

Para 4.2.2 of the Manual for Procurement of Goods, 2017, focuses on minimizing risks associated with open tendering. Open tendering aims to attract bids from as many potential suppliers as possible. However, there's a risk that even with open tendering, you might not get enough bids. This rule outlines steps to prevent that, ensuring a fair and competitive process. It applies to all government departments and organizations using open tendering for procuring goods. It directly affects procurement officers, tender committees, and potential bidders.

This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.

Key Points

  • •Ensure wide publicity of tenders through easily searchable online notices and direct communication with registered vendors.
  • •Address potential hindrances to accessing tender documents, such as high costs or difficult procedures.
  • •Provide sufficient time (ordinarily a minimum of 21 days) for bid preparation and consider extending the deadline if needed to encourage more participation.
  • •Price tender documents minimally and set EMD (Earnest Money Deposit) at a reasonable level to avoid discouraging bidders.
  • •Treat a tender with only one effective offer as a single tender enquiry, requiring appropriate approval.

Practical Example

The Ministry of Textiles wants to procure 500 high-speed sewing machines through open tendering. Mr. Sharma, the procurement officer, ensures the tender notice is prominently displayed on the ministry's website and sends SMS and email notifications to all sewing machine vendors registered with the ministry, including those who successfully supplied machines in the past. He also ensures the tender document is easily downloadable and priced at a nominal Rs. 500. The EMD is set at Rs. 50,000, considered sufficient to deter frivolous bids but not too high to discourage smaller vendors. After the initial deadline, only two bids are received. Mr. Sharma, with the approval of the competent authority, extends the deadline by another 10 days to attract more bidders.

This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.

Frequently Asked Questions

What happens if we only receive one valid bid after open tendering?▼
Para 4.2.2 states that a tender with only one effective offer should be treated as a single tender enquiry, requiring approval from the appropriate authority as per the delegation of financial powers.
How much time should we give bidders to prepare their bids?▼
Ordinarily, the due date for opening the tender should be a minimum of 21 days from the date of advertisement. However, this can be adjusted based on the complexity of the goods being procured and the required delivery timeline.
Is it mandatory to charge for tender documents?▼
No, it is not mandatory. The rule states that tender documents should be priced minimally, if at all, keeping in view the value of the tender and the costs associated with preparing and publicizing the documents. Consider offering them for free to encourage wider participation.
Why is it important to notify registered vendors directly about tenders?▼
Direct notification helps ensure that potential bidders are aware of the opportunity, even if they don't regularly check the website. This increases competition and improves the chances of getting the best value for money.
What is the purpose of the Earnest Money Deposit (EMD)?▼
The EMD is a security deposit required from bidders to ensure they honor their bids. It should be sufficient to deter non-serious bidders but not so high as to discourage legitimate businesses from participating.

This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.

Test Your Knowledge

Question 1 of 3

According to Para 4.2.2 of the Manual for Procurement of Goods, 2017, what is the ordinary minimum time period that should be fixed for the opening of a tender from the date of advertisement?

Related Rules

Para 9.4Manual for Procurement of Goods, 2024 - Para 9.4 - Chapter 9Para 9.5.5Manual for Procurement of Goods, 2024 - Para 9.5.5 - Chapter 9Para 1.8.2Manual for Procurement of Goods, 2024 - Para 1.8.2 - Chapter 1Para 2.2.2Manual for Procurement of Goods, 2024 - Para 2.2.2 - Chapter 2Para 2.2Manual for Procurement of Goods, 2024 - Para 2.2 - Chapter 2

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