Para 4.3.1 — NONCONSULT_MANUAL

4.3.1. Price based System - Least Cost Selection (LCS) 1. In this method of selection, service providers submit both a technical proposal and a financial proposal at the same time. Minimum qualifying marks for the quality of the technical proposal are prescribed as a benchmark (normally 75 (seventy-five) out of a maximum of 100 (hundred)) and indicated in the Tender Document along with a scheme for allotting marks for various technical criteria/ attributes. Alternatively, since in LCS selection, technical offers do not require to be ranked (or to be added of weighted technical score to financial score – as in QCBS selection), it would suffice in appropriately simple cases if the evaluation criteria is only a fail/ pass criteria prescribing only the minimum qualifying benchmark. Thus, in LCS, simplified evaluation criteria may also be used where instead of a marking scheme, a minimum fail/pass benchmark of technical evaluation may be prescribed (i.e. must have completed at least two similar assignments; must have a turnover of at least Rs 10 (Rupees Ten) Crore etc). Any bidder that passes these benchmarks is declared as technically qualified for the opening of their financial bids. The technical proposals are opened first and evaluated, and the offers that qualify as per these technical evaluation criteria will only be considered as technically responsive, and the rest

4. Least Cost Selection - Risks and Mitigations:

Risk Mitigation a) Technical criteria may not be relevant to the realisation of the quality of the assignment. Technical criteria selected should be relevant and proportional to the requirement of quality of assignment, and the selection process should be rigorous enough to ensure that, on the one hand, no technically unsatisfactory bids should be able to get past a loose criterion and, on the other hand, no technically satisfactory offer should get ruled out by tight criteria. b) Marking Subjectivity: The scheme of marking or its application may be subjective. It is important to lay down as objective a scheme of marking as possible. Cases where subjectivity is unavoidable (as in evaluation of methodology etc), a system of grading responses and their marking may be laid down in the bidding documents. Procuring Entity should also have a system of conciliation and moderation of widely disparate markings by different members of evaluation committee. As mentioned above in most of Services, a fail/ pass criteria is sufficient, and it avoids subjectivity.

Manual for Procurement of Non-Consultancy Services, 2025 will be considered technically nonresponsive and will be dropped from the list. Financial proposals are then opened for only eligible and responsive offers (Financial bids of other unresponsive bidders remain unopened) and ranked. L-1 offer out of the responsive offers is selected on price criteria alone without giving any additional weightage to marks/ ranking of Technical proposal. This system of selection is roughly the same as the price-based selection of an L-1 offer (among the technically responsive offers) in the procurement of Goods/ Works. (Rule 193 of GFR 2017, also see para 7.4.2 below)

2. LCS is considered suitable for recruiting service providers from firms in most assignments that are of a standard or routine nature (such as engineering design of non-complex Consultancy/ services/ works) where well-established practices and standards exist.

3. It is the simplest and the quickest system of selection, and under normal circumstances, this method of evaluation shall be used as default since it allows for minimum satisfactory technical efficiency with the economy. Justification must be provided if a selection method other than LCS is to be used.