Para 1.10.2 - Local Preference | KartavyaDesk

Original Rule Text

a) In case there is sufficient local capacity and competition for the item to be procured, as notified by the nodal Ministry, only Class I local suppliers shall be eligible to bid. As such, the multiple suppliers who would be awarded the contract should be all and only ‘Class I Local suppliers.’ b) In other cases, ‘Class II local suppliers’ and ‘Non-local suppliers’ may also participate in the tender process along with ‘Class I Local suppliers’ as per provisions of the Order. c) If ‘Class I Local suppliers’ qualify for the award of contract for at least 50 (fifty) per cent of the tendered quantity in any tender, the contract may be awarded to all the qualified bidders as per award criteria stipulated in the tender documents. However, in case ‘Class I Local suppliers’ do not qualify for the award of contract for at least 50 (fifty) per cent of the tendered quantity, purchase preference should be given to the ‘Class I local supplier’ over ‘Class II local suppliers’/ ‘Non-local suppliers’ provided that their quoted rate falls within 20 (twenty) per cent margin of purchase preference of the highest quoted bidder considered for award of contract so as to ensure that the ‘Class I Local suppliers’ taken in totality are considered for award of contract for at least 50 (fifty) per cent of the tendered quantity. d) The margin of purchase preference shall be 20%. Only those ‘Class-I local suppliers’ would be eligible for purchase preference whose quoted rates fall within the margin of purchase preference, subject to its meeting the prescribed criteria for award of contract as also the constraint of maximum quantity that can be sourced from any single supplier. First, purchase preference must be given to the lowest quoting eligible ‘ClassI local supplier.’ If the lowest quoting ‘Class-I local supplier’ does not qualify for purchase preference because of aforesaid constraints or does not accept the offered quantity, an opportunity may be given to the next higher eligible ‘Class-I local supplier,’ and so on. In case the quantity thus allocated to eligible ‘Class-I local suppliers’ is short of 50% of the tendered quantity, then this shortfall quantity may be distributed among all other qualified bidders as per award criteria stipulated in the tender documents. e) To avoid any ambiguity during the bid evaluation process, the procuring entities may stipulate their own tender-specific criteria for the award of contracts amongst different bidders, including the procedure for purchase preference to ‘Class-I local supplier’ within the broad policy guidelines stipulated in the sub-paras above.

What This Means

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

Key Points

• •Prioritizes 'Class I Local suppliers' in government procurement.
• •Requires at least 50% of the contract value to be awarded to 'Class I Local suppliers'.
• •Provides a 'purchase preference' of 20% to 'Class I Local suppliers' if they don't initially meet the 50% target.
• •Allows procuring entities to define tender-specific award criteria within the policy guidelines.
• •Nodal Ministries can notify items where only Class I local suppliers are eligible to bid.

Practical Example

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

Frequently Asked Questions

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