Goodbye L1: Niti Aayog seeks to change lowest bidder norm government contracts

Niti Aayog will prepare a draft proposal to suggest alternatives to the current ‘lowest bidder’ (L1) tendering norm to overcome deficiencies in the process which doesn’t give sufficient weightage to quality parameters. In the current system, which is called Least Cost Selection Method, the 
bidder quoting the lowest price wins the contract.

Speaking at the event “Goodbye L1”organised by Consulting Engineers Association of India, Niti Aayog vice chairman Rajeev Kumar said everyone knows about the deficiencies in the L1 norm and by following this tendering model, government agencies have “tied their hands and feet”. He referred to a concept paper by Central Vigilance Commission, which has talked about the need to revisit current norm and how an all-inclusive public procurement strategy is required, in sync with a rapidly changing world. It has suggested that conventional L1 method is not suited for major infrastructure  projects.
Stressing that greater public support was required for the change considering the “moral hazard” attached to such a proposal, Union minister Nitin Gadkari said, “The spirit behind the theme ‘Goodbye L1’ is good, the strategy may not be right. If L1 doesn’t get a contract, people feel that the minister or bureaucrats must have made good money. So, there are risks of getting blamed even if intention is good.”
Kumar said the L1 bidding norm not only impacts infrastructure projects but other government works as well. He said the current tendering system affects research laboratories and defence bodies as they find it difficult to get the right quality product because the tenders go to the lowest bidder. Pointing out that the change can happen only if there is a public demand, he said, “Make a bigger coalition and create public opinion. You should spread the discussion how following alternative norms is beneficial and there will be no increase in cost…because of L1 bidding practice we have not been able to create globally competitive infrastructure firms barring only a few.” (Source:Times of India)

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