Para 7.4.11 - Tender Cancellation | KartavyaDesk

Non-Consultancy Manual

Original Rule Text

a) If the quantity and quality of requirements have changed substantially or there is an un-rectifiable infirmity in the tender process; b) when none of the tenders is substantially responsive to the requirements of the Procurement Documents; c) none of the technical Proposals meets the minimum technical qualifying score; d) If effective competition is lacking. However, lack of competition shall not be determined solely based on the number of Bidders. (Please refer to para 7.2.7 above also regarding receipt of a single offer). e) the Bids’/Proposals’ prices are substantially higher than the updated cost estimate or available budget; f) If the bidder, whose bid has been found to be the lowest evaluated bid (L1) or Highest scorer (H-1) withdraws or whose bid has been accepted, fails to sign the procurement contract as may be required, or fails to provide the security as may be required for the performance of the contract (Para 7.5.3) or otherwise withdraws from the procurement process (para 7.2.6), the Procuring Entity shall deal the case as per para 7.2.6-3).77.

What This Means

Para 7.4.11 of the Manual for Procurement of Non-Consultancy Services outlines the circumstances under which a procuring entity (government department) can cancel a tender process. Essentially, it provides a safety net when something goes wrong or the initial tender is no longer viable. This rule ensures that public funds are spent wisely and that the procurement process remains fair and transparent. It protects the government from being forced to award a contract that is no longer in its best interest. It affects all government departments and agencies involved in procuring non-consultancy services, as well as the bidders participating in the tender process.

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

Key Points

•Tender can be cancelled if requirements change significantly or there's a flaw in the tender process.
•Cancellation is possible if no bids meet the minimum technical requirements or are substantially responsive.
•Lack of effective competition (not solely based on the number of bidders) can lead to cancellation.
•Bids being substantially higher than the updated cost estimate or budget justifies cancellation.
•Withdrawal of the L1 bidder or failure to sign the contract also allows for cancellation, following specific procedures (Para 7.2.6-3).77.

Practical Example

The Ministry of Rural Development issued a tender for the supply of 10,000 solar streetlights. After receiving bids, the ministry realized that the specifications in the tender document were outdated and did not reflect the latest technological advancements in solar lighting. Furthermore, the lowest bid received was 30% higher than the updated budget allocated for the project. Based on Para 7.4.11 (a) and (e), the ministry decided to cancel the tender. They revised the specifications to include the latest technology and re-issued the tender. This ensured that the ministry procured the most efficient and cost-effective solar streetlights for rural areas. Later, the L1 bidder, M/s Surya Prakash, withdrew their bid after it was accepted. The Ministry then followed the procedures outlined in Para 7.2.6-3).77 to deal with the situation.

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 'substantially responsive' mean in the context of tenders?▼

'Substantially responsive' means that the bid largely meets the requirements outlined in the tender document, with only minor deviations that don't significantly affect the quality, quantity, or delivery of the goods or services.

How is 'lack of effective competition' determined?▼

Lack of effective competition is determined by factors beyond just the number of bidders. It considers whether the bidders are genuinely independent and competitive, or if there's evidence of collusion or other anti-competitive practices. Market research and analysis are crucial.

What happens if the L1 bidder withdraws after being selected?▼

If the L1 bidder withdraws, the procuring entity must follow the procedures outlined in Para 7.2.6-3).77 of the manual. This typically involves forfeiting the bidder's bid security and potentially offering the contract to the next lowest bidder, provided they meet all requirements.

Can a tender be cancelled if only one bid is received?▼

Yes, a tender can be cancelled if only one bid is received, especially if the procuring entity believes that the single bid does not represent fair market value or if there are concerns about a lack of competition. Refer to para 7.2.7 for further guidance on single offers.

What is the 'updated cost estimate' mentioned in the rule?▼

The 'updated cost estimate' refers to the revised cost assessment of the procurement item or service, taking into account current market prices, inflation, and any changes in specifications or requirements since the original estimate was prepared.

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 7.4.11 of the Manual for Procurement of Non-Consultancy Services, under which of the following circumstances can a procuring entity cancel a tender process?

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Para 7.4.11 - Tender Cancellation | KartavyaDesk

Original Rule Text

What This Means

Key Points

Practical Example

Frequently Asked Questions

Test Your Knowledge

Related Rules