The Public Procurement Bill, 2012 Highlights of the Bill

Industry / Commerce / Finance

The Public Procurement Bill, 2012

Highlights of the Bill  The Bill seeks to regulate and ensure transparency in procurement by the central government and its entities. It exempts procurements for disaster management, for security or strategic purposes, and those below Rs 50 lakh. The government can also exempt, in public interest, any procurements or procuring entities from any of the provisions of the Bill. The government can prescribe a code of integrity for the officials of procuring entities and the bidders. The Bill empowers the government and procuring entity to debar a bidder under certain circumstances The Bill mandates publication of all procurement-related information on a Central Public Procurement Portal. The Bill sets Open Competitive Bidding as the preferred procurement method; an entity must provide reasons for using any other method. It also specifies the conditions and procedure for the use of other methods The Bill provides for setting up Procurement Redressal Committees. An aggrieved bidder may approach the concerned Committee for redressal. The Bill penalises both the acceptance of a bribe by a public servant as well as the offering of a bribe or undue influencing of the procurement process by the bidder with imprisonment and a fine. Key Issues and Analysis The Bill exempts certain procurements from the specified process, besides allowing the government to limit competition in certain cases. It is unclear why the government has been given further powers to exempt any procurement or procuring entity from the applicability of the Bill. The Bill specifies Open Competitive Bidding as the preferred method of procurement, without defining the term. The UN Model Law and an earlier draft procurement Bill describe equivalent terms in detail In cases where procurement from a particular supplier is necessary to ensure standardisation or compatibility with existing systems, the Bill does not require certification from a competent technical expert. Such a certification is required by existing regulations and model laws. In a departure from existing regulations, the Bill does not restrict use of cost-plus contracts, which provide no incentive for efficiency.