Para 4.6.2 — GOODS_MANUAL

4.6.2 Single Stage Pre-qualification: 1. In the situation described in para 4.5 above, i.e., significantly complex procurement, the capability of the source of supply is crucial, the necessity to ensure competition only among equally capable bidders, but where the time, effort and money required from the bidder to participate in a tender is not very high, instead of a separate phase of Pre-Qualification bidding (as described in para 4.6.1 above), a clear-cut, fail-pass Pre-Qualification Criteria (PQC – please see para 4.6.1-4 above) can be asked to be submitted as the first

4.6.3 PQB Tendering –Risks and Mitigations:

Risk Mitigation 1. 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 is very stringent nor very lax in restricting/facilitating the entry of bidders. These criteria should be clear, unambiguous, exhaustive, and yet specific. Also, there should be fair competition. Lay down criteria when prequalification in single-stage or two-stage tendering is warranted. Also, model PQC criteria for diverse types of procurements should be laid down on the lines of Annexure 12. 2. Dangers of Anti-competitive bidding: Since in a two-stage PQB, shortlisted bidders are announced, there is a heightened possibility of these bidders forming a cartel and quoting anti-competitive prices in the second stage of tendering. Two-stage PQB should be done only in appropriately justified situations. Alternatively, a single-stage multiple envelope system may be used for prequalification, in which the chances of anti-competitive behaviour and cycle time are significantly lower. 3. Two-phase PQB is a time-consuming process. 4. Contentious and Disputes: Both the successful and unsuccessful bidders tend to view the PQB process as a means for creating rights/ privileges/ entitlement for them by way of hair-splitting, contentious or viciously legalistic interpretations of PQC In the PQC, a caveat against such tendencies may be included, asserting the right of the procuring agency to interpret the PQC on common usage of terminologies and phrases in public procurement instead of legalistic and hair-splitting judgements

(additional) envelope in a single-stage three envelopes system so that a bidder's risk of having his bid rejected on the grounds of qualifications is remote if he exercises due diligence. In eProcurement, separate files shall be uploaded by the bidder, mutatis mutandis.

2. Strictly speaking, this is not a pre-qualification but a post-qualification of bidders (i.e., after the techno-commercial and financial bids have been received). In respect of prequalification, in the first instance on the pre-announced bid opening date, only the PQB envelopes (also containing the EMD and other eligibility documents) are opened and evaluated to shortlist the responsive bidders who pass the Pre-qualification.

3. The rest of the procedure is the same as the two envelope systems (Techno-commercial and Financial Bids) for only qualified bidders. In e-procurement, the other two envelopes of unqualified bidders would remain encrypted and unopened. In off-line tenders, the other two envelopes of unqualified bidders are returned unopened to the respective bidders by registered acknowledgement due/reliable courier or any other mode with proof of delivery;

Chapter 4: Modes of Procurement and Tendering Systems

Risk Mitigation criteria, disregarding the very rationale of the PQB and PQC. and that their decision in this regard would be final.