The much needed revised policy of the Union government doing away with age old system of procurement and awarding works on basis of at Least cost of L1 will help the infrastructure industry in a big way.
“ The government amended the General Financial Rules (GFR) vide it’s order No. 1/1/2021-PPD dated 29th October, 2021 bringing in requisite change that it is no longer necessary to award work at least cost nor it is necessary to have the minimum of two quotes to compare rates. Works can now be awarded at lowest workable rates and not at the Least cost. It can be awarded on a single quotation also. This applies to all the three procurements i.e. procurement of Consultants, Contractors and Goods.” Said Mr K K Kapila, former president Indian Buildings Congress (IBC) and president emeritus International Road Federation (IRF) while speaking at the concluding session of the Two day National seminar on ‘sustainable built environment for future’ organised by the Indian Buildings Congress (IBC) .
“According to the revised guidelines, L1 or Least Cost Selection Method, will no longer be the only tendering format for selecting bidders for executing projects. L1 was so far the preferred method used by ministries, public agencies and public sector undertakings (PSUs) for selecting lowest bidders to carry out standard or routine works. The guidelines issued by the Department of Expenditure’s Public Procurement division have now allowed the selection of bidders for works and non-consultancy services through alternative procurement methods like the Quality-cum-Cost Based Selection (QCBS).”Mr Kapila said .
“In the L1 system, a bidder is selected only on the basis of the lowest cost committed to complete the work. There is no weightage for technical score in the final evaluation and the responsive technically qualified proposal with the lowest evaluated cost is selected. Unlike L1, new policy evaluates a bidder based on a combination of technical and quality scores. However, the maximum weightage for non-financial parameters should not exceed 30 per cent.” He added .
“ A major infra company like L&T was also suffering due to age old works awarding system as the company was losing business to ill-equipped cos in India. But changed bidding process has helped them come back” added Mr Kapila.
“IBC urges Electrical, Air Conditioning people, Elevator and Escalator groups, Manufacturers of cranes, park lifts all producers of ready mix concrete get integrated in the building industry so everyone should be a part of IBC to make it a robust and strong organization.” He said .