The award of Public Contract through open tender is to ensure – transparency in public procurement, to maximize economy and efficiency in public procurement, to promote healthy competition among tenderers, to provide for fair and equal treatment to all the tenderers and to eliminate irregularities, interference and corrupt practices by authorities concerned. This is also required by the Article 14 of the Constitution of India.
Normally three modes of tendering are adopted. Namely –
- Open Tenders
- Limited Tenders
- Single Tender/Nomination Basis
In an open tender, bids are invited giving wide and adequate publicity. This is the most preferred mode of tendering.
In the case of small value works, urgent works and in case only a few bidders are available in the market, limited tenders from such bidders who have been empanelled are invited. In case of Limited Tenders the empanelment should be done in a transparent way and updated periodically.
Award of contracts on nomination basis, which is also called a single tender is to be resorted to only under exceptional circumstances such as natural calamities and emergencies or there were no bids to repeated tenders or where only one supplier has been licensed ( proprietary item ) in respect of goods sought to be procured.
In one of the recent judgments of the Hon’ble Supreme Court in case of Nagar Nigam, Meerut Vs Al Faheem Meat Exports Pvt. Ltd. it has been emphasized that all the public tenders should be in an open and transparent manner with adequate publicity. In this judgment, Hon’ble Supreme Court has stressed that award of contract on nomination basis should be resorted to in rare and exceptional cases only
The Commission vide its Circular No. 06-03-02-CTE-34 dt. 20.10.2003 and Circular No. 15/5/06 issued vide letter no. 005/CRD/19 dt. 9th May 2006 has emphasized upon open tendering as the most preferred mode of tendering and insisted on transparency in the preparation of panel in case of limited tenders.
During intensive examination of various contracts a warded by many organizations, it is observed that they do not have a clear-cut policy for inviting tenders through various modes as discussed above.
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