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Para 5.1.10 - Minimum Wage | KartavyaDesk

Non-Consultancy Manual

Original Rule Text

4. Restrictions regarding Personnel Deployed: a) The quoted rates shall not be less than the minimum wage fixed/notified by the Central/ State Government (whichever is higher) – where the service is performed and shall include all statutory obligations and service charges/ margin (including transaction charges) over such minimum wage. b) Bids without any element of cost over and above such minimum wage shall be treated as ‘Nil’ price quotations and would be rejected. c) Least Cost System (LCS) should be considered for procurement of Manpower Outsourcing Service, wherever appropriate, especially in high value cases. d) The service provider shall be liable for all kinds of dues payable in respect of all personnel provided under the contract and the Procuring Entity shall not be liable for any dues for availing the services of the personnel. The service provider should ensure that the persons to be deployed are not alcoholics or drug addicts and do not indulge in any activity prejudicial to the interest of the Procuring Entity. The service provider shall ensure to get the Police verification for all the manpower deployed by them, and the contractor should ensure that the manpower deputed should bear good moral character.

What This Means

Para 5.1.10 of the Manual for Procurement of Non-Consultancy Services focuses on protecting the rights and well-being of personnel deployed by service providers. It essentially sets a floor for the wages paid to these workers and ensures that the government isn't indirectly supporting exploitative labor practices. This rule applies whenever a government department outsources services where personnel are involved, like security guards, cleaning staff, or data entry operators. It directly affects service providers bidding for government contracts and, most importantly, the workers they employ.

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

Key Points

  • •Quoted rates must be at least the minimum wage (Central or State, whichever is higher) plus statutory obligations and service charges.
  • •Bids quoting only the minimum wage will be rejected as 'Nil' price quotations.
  • •Least Cost System (LCS) is preferred for manpower outsourcing, especially for high-value contracts.
  • •The service provider is solely responsible for all dues payable to their personnel; the government is not liable.
  • •Service providers must ensure deployed personnel are not alcoholics or drug addicts, have good moral character, and have undergone police verification.

Practical Example

The Ministry of Rural Development is outsourcing security services for its regional offices. Two companies, 'Suraksha Guards' and 'Vigilant Security,' submit bids. The minimum wage in the state is ₹18,000 per month. Suraksha Guards quotes ₹18,000 per month, claiming it covers all costs. Vigilant Security quotes ₹22,000 per month, including minimum wage, employer contributions to PF and ESI, and a service charge. According to Para 5.1.10, Suraksha Guards' bid will be rejected because it doesn't include any cost over and above the minimum wage. Vigilant Security's bid is compliant, and if they are the lowest bidder overall (considering other factors), they may be awarded the contract, provided they meet all other requirements.

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 a service provider pays less than the minimum wage?▼
The procuring entity should take strict action against the service provider, including penalties as per the contract and potential blacklisting. The service provider is legally obligated to pay at least the minimum wage.
Does this rule apply to all types of non-consultancy services?▼
This rule specifically applies when the service involves the deployment of personnel. It's less relevant for services like software licenses or equipment rentals where human labor is not the primary component.
What constitutes 'statutory obligations'?▼
Statutory obligations include employer contributions to Provident Fund (PF), Employees' State Insurance (ESI), bonus, gratuity, and any other legally mandated payments.
Why is police verification important?▼
Police verification helps ensure the safety and security of the government premises and personnel by verifying the background and character of the deployed workforce.
What is Least Cost System (LCS) and when should it be used?▼
LCS is a procurement method where the contract is awarded to the bidder offering the lowest price that meets all technical and quality requirements. It should be considered for manpower outsourcing, especially in high-value cases, to ensure cost-effectiveness.

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 5.1.10 of the Manual for Procurement of Non-Consultancy Services, what is the minimum acceptable rate that a service provider can quote for personnel deployed in a government contract?

Related Rules

Para 3.2Manual for Procurement of Non-Consultancy Services, 2025 - Para 3.2 - Chapter 3Para 4.1.1Manual for Procurement of Non-Consultancy Services, 2025 - Para 4.1.1 - Chapter 3Para 4.2.3Manual for Procurement of Non-Consultancy Services, 2025 - Para 4.2.3 - Chapter 3Para 4.4Manual for Procurement of Non-Consultancy Services, 2025 - Para 4.4 - Chapter 3Para 6.8Manual for Procurement of Non-Consultancy Services, 2025 - Para 6.8 - Chapter 6

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