Finance Secretary Dr T.V. Somanathan releases guidelines for reforms in Public Procurement and Project Management

Guidelines attempt to incorporate into the realm of Public Procurement, innovative rules for faster, efficient and transparent execution of projects

Finance Secretary & Secretary Expenditure, Dr T.V. Somanathan released guidelines to usher in reforms in Public Procurement and Project Management here today. The formulation and release of these guidelines is a part of continuous process of review of existing rules and procedures as emphasised by the Hon’ble Prime Minister during his Independence Day address this year. This is being monitored by Cabinet Secretary as a special campaign during 2^nd October, 2021 to 31^st October, 2021.

The draft of the guidelines was prepared under the aegis of the Central Vigilance Commission (CVC) after a detailed consultative process involving experts from various fields of public procurement and project management. The Department of Expenditure (DoE), Ministry of Finance, was nominated to issue the guidelines after soliciting and detailed consideration of the comments of Ministries/ Departments.

These guidelines attempt to incorporate into the realm of Public Procurement in India, innovative rules for faster, efficient and transparent execution of projects and to empower executing agencies to take quicker and more efficient decision in public interest. Some of the improvements include prescribing strict timelines for payments when due. Timely release of ad hoc payments (70% or more of bills raised) is expected to improve liquidity with the contractors especially Micro, Small and Medium Enterprises (MSMEs).

As part of Government’s Digital thrust, Electronic Measurement Books have been prescribed as a means of recording progress of works. This system, along with other IT based solutions, proposed in the guidelines, will help in realising the dream of efficient Digital India, facilitate faster payments to contractors and reduce disputes.

Alternative methods for selection of contractors have been permitted, which can improve speed and efficiency in execution of projects. In appropriate cases, quality parameters can be given weightage during evaluation of the proposal in a transparent and fair manner, through a Quality cum Cost Based Selection (QCBS), as an alternative to traditional L1 system.

Executing public projects on time, within the approved cost and with good quality has always been a challenge. As the pace of economic development steps up careful examination of procedures and rules is essential to ensure unwarranted roadblocks are removed and new innovations utilized for increasing value for money of the taxpayer.

The Central Vigilance Commission (CVC), the Comptroller & Auditor General (CAG) and the National Institution for Transforming India (NITI) Aayog had carried out detailed analysis of the procedures and rules for public procurement and project management and had suggested changes in strategies to meet challenges of present and future public procurement.

Order Link:

https://doe.gov.in/sites/default/files/General%20Instructions%20on%20Procurement%20and%20Project%20Management.pdf  

Public procurement reform enables faster project execution via strict payment timelines, electronic measurement books and QCBS selection. The Department of Expenditure guidelines reform public procurement and project management by prescribing strict timelines for payments, timely ad hoc releases to improve contractor liquidity (especially for MSMEs), mandating Electronic Measurement Books for progress recording, permitting alternative contractor selection methods, and allowing Quality cum Cost Based Selection (QCBS) as a transparent alternative to the traditional L1 evaluation, following consultations led by the CVC and monitored as a specified campaign.