Para 7.2.6 - Withdrawn Bids | KartavyaDesk
Original Rule Text
i) If a not-extended or withdrawn bid happens to be the L1 bidder (lowest acceptable bidder, who is techno-commercially qualified for the supply of a bulk quantity and would have been awarded a contract, but for his refusal to extend validity or withdrawal of bid within validity), the tender must be re-tendered. ii) Since this may take some time, Procuring Entity may cover their immediate short-term needs through an appropriate mode of procurement. iii) However, such L1 price of the not-extended or withdrawn bids shall not be taken as precedence for determining price estimates or reasonableness. iv) In certain cases, there may be multiple L-1 bidders, for example, in manpower hiring tenders that are evaluated on the basis of the minimum service charge. In such cases, where a withdrawn bid also happens to be L-1, re-tendering may not be necessary. The procuring entity may continue with tender finalization, proceeding with the remaining L-1 bids.
What This Means
The rule also acknowledges that sometimes, there might be multiple L1 bidders, especially in cases like manpower hiring where the lowest service charge wins. If a withdrawn bid is one of several L1 bids, the procuring entity doesn't necessarily have to re-tender. They can continue with the remaining L1 bidders. This exception streamlines the process when multiple vendors offer the same lowest price, and one drops out.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- •If the L1 bidder withdraws or doesn't extend their bid, the tender generally needs to be re-tendered.
- •The withdrawn L1 bid's price cannot be used as a reference for future price estimates or reasonableness.
- •An exception exists when there are multiple L1 bidders; re-tendering may not be necessary if one of them withdraws.
- •The procuring entity can cover immediate short-term needs through appropriate procurement methods while re-tendering.
- •This rule ensures fairness and prevents manipulation of the tendering process.
Practical Example
The Ministry of Rural Development issued a tender for providing security services to its regional offices. Three companies, SecureGuard, Vigilant Services, and Eagle Eye Security, submitted bids. SecureGuard's bid was the lowest and considered technically compliant, making them the L1 bidder. However, before the contract could be awarded, SecureGuard informed the Ministry that they were withdrawing their bid due to unforeseen circumstances. According to Para 7.2.6, the Ministry must re-tender the security services contract. In the meantime, the Ministry can use a GeM purchase to hire temporary security guards for a month to cover the immediate need. When the Ministry re-tenders, they cannot use SecureGuard's withdrawn bid price of ₹50,000 per month as a benchmark for evaluating the new bids.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Frequently Asked Questions
What does 'not-extended or withdrawn bid' mean?▼
Can we negotiate with the second-lowest bidder (L2) if the L1 bidder withdraws?▼
What if the re-tender also results in a withdrawn L1 bid? Do we keep re-tendering?▼
Why can't we use the withdrawn L1 bid price as a benchmark?▼
Does this rule apply to all types of procurement?▼
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 7.2.6 of the Manual for Procurement of Non-Consultancy Services, what action is generally required if the L1 bidder withdraws their bid before the contract is awarded?
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