KartavyaDesk

Para 7.6.3 - Contract Allocation | KartavyaDesk

Goods Manual

Original Rule Text

a) L1 should be awarded at least the percentage mentioned above or his quoted quantity/ spare supply capacity, whichever is lower, b) In case the quantity thus allocated for L1 is less than the prescribed percentage, higher percentages than those stipulated in the Tender document for L2 (and L3 bidders, and so on, as applicable) may be considered for allocation to cover the entire tender quantity. c) For the rest of the contract quantity, the lowest rate accepted will be counter-offered to the L2 party. On acceptance of the counter-offer, the order will be placed on L2 for the respective percentage (or increased percentage as per the sub-clause above) or the quoted quantity/ spare supply capacity of the L2 bidder, whichever is lower and so on to other higher bidders. In case of non-acceptance of the counter-offer by the L2 party or in case of allocated quantity being short of L2’s stipulated/ increased percentage, a similar offer shall be made to L3 and L4, and so on. d) In case of shortfalls from the prescribed/ increased percentages, the percentage of allocation of bidders in sequence (L2, L3, etc.) may be proportionately increased (on the lines of sub-para b) above), and if unavoidable, more bidders than the minimum number specified may be considered, to cover the entire tender quantity, keeping the sanctity of ranking of bidders. If it is still not possible to cover the entire tender quantity, there would be no alternative but to retender the uncovered quantity. e) In case higher-priced bidders do not agree to match the L1 price, action as per subpara 2-b) above may be considered.

What This Means

Para 7.6.3 of the Manual for Procurement of Goods, 2017, deals with how to distribute a contract when multiple suppliers bid on it. The goal is to ensure fair opportunity while still getting the best price. The lowest bidder (L1) should get at least a certain percentage of the contract, or their maximum supply capacity, whichever is smaller. If L1 can't fulfill the minimum percentage, then the higher bidders (L2, L3, etc.) get a chance to take on more of the contract, potentially even more than originally specified in the tender document. This rule affects all government departments and agencies involved in procuring goods, as well as the suppliers bidding for those contracts.

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

Key Points

  • •L1 gets the minimum prescribed percentage or their supply capacity, whichever is lower.
  • •If L1 can't fulfill the minimum, higher bidders (L2, L3, etc.) may be offered a larger share.
  • •Higher bidders are offered the L1 price; if they accept, they get a portion of the contract.
  • •If higher bidders decline the L1 price, the allocation to subsequent bidders may be proportionately increased.
  • •Retendering is the last resort if the entire quantity cannot be covered by existing bidders.

Practical Example

The Ministry of Electronics and Information Technology (MeitY) issues a tender for 1000 laptops. The tender specifies that L1 should get at least 50% of the order. Three companies bid: AlphaTech (L1) at ₹40,000 per laptop, BetaCorp (L2) at ₹42,000, and Gamma Solutions (L3) at ₹45,000. AlphaTech can only supply 400 laptops. MeitY awards AlphaTech 400 laptops. BetaCorp is then offered the L1 price of ₹40,000 for the remaining 600 laptops. BetaCorp agrees to supply 300 laptops at that price. Gamma Solutions is then offered the L1 price for the remaining 300 laptops. If Gamma Solutions refuses, MeitY might increase BetaCorp's allocation further (if BetaCorp has the capacity) or retender the remaining quantity if no bidder agrees to match the L1 price.

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 L1's quoted quantity is less than the prescribed percentage?▼
L1 will be awarded the contract for their quoted quantity, and the remaining quantity will be offered to higher bidders at the L1 price.
Can the percentage allocated to L2 be higher than what was originally specified in the tender?▼
Yes, if L1 cannot fulfill the minimum prescribed percentage, the percentages allocated to L2 and subsequent bidders can be increased to cover the entire tender quantity.
What if no higher-priced bidder agrees to match the L1 price?▼
If no higher-priced bidder agrees to match the L1 price and the entire tender quantity cannot be covered, the uncovered quantity may need to be retendered.
Does this rule apply to all types of procurement?▼
This rule applies to the procurement of goods as per the Manual for Procurement of Goods, 2017.
What is the objective of this rule?▼
The objective is to ensure fair opportunity to bidders while securing the best possible price for the government and ensuring the required quantity is procured.

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 7.6.3 of the Manual for Procurement of Goods, 2017, what is the primary factor determining the quantity awarded to the L1 bidder?

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

Need help understanding this rule?

Ask Niti — your AI assistant for Goods Manual and other government rules