Para 1.8 — WORKS_MANUAL

1.8 Legal Aspects Governing Public Procurement of Works A public procurement contract, besides being a commercial transaction, is also a legal transaction. There are a number of laws that may affect various commercial aspects of public procurement contracts. A public procurement professional is expected to be generally aware of the implications of following basic laws affecting procurement of works; however, he or she is not expected to be a legal expert. In different contexts of the scope of work, an additional set of laws may be relevant.

1.9 The Law of Agency – applicable to Procurement of Works In addition to Laws which are applicable to Public Procurement of Works mentioned above, the Law of Agency (Section 182 to section 238, of the Indian Contract Act, 1872) implies that Contractor would be an Agent of the Procuring Entity, to execute the works on its behalf. Hence, there exists a Principal/ Employer and Agent relationship between Procuring Entity and such Contractor. As per this law, the employer is vicariously legally and financially liable for actions of its Agents. For example, a violation of certain labour laws in deputing staff for Procuring Entity’s contract by the agents may render the Procuring Entity legally and financially liable for such violations, under certain circumstances. The Procuring Entities need to be aware of such eventualities. Standard Bidding Documents should take care of this aspect.

i) The Constitution of India; ii) Indian Contracts Act, 1872; iii) Arbitration and Conciliation Act, 1996 read with The Arbitration and Conciliation (Amendment) Act, 2015; iv) Competition Act, 2002 as amended with Competition (Amendment) Act, 2007; v) The Information Technology Act, 2000 (IT Act, regarding e-procurement and e-auction, popularly called the Cyber Law); vi) Right to Information (RTI) Act 2005; vii) Central Vigilance Commission Act, 2003; viii) Delhi Special Police Establishment Act, 1946 (DSPE – basis of the Central Bureau of Investigation); ix) Prevention of Corruption Act, 1988; x) Code of Criminal Procedure, 1973 (Sections 195(1) and 197(1)); xi) Various labour laws applicable at the works’ site; xii) Various building and safety acts, codes, standards applicable in the context of the scope of work; and xiii) Various environmental and mining laws, codes, standards applicable in the context of the scope of work. (For salient features of laws applicable to public procurement, please refer to Appendix 2).