Ficci urges govt to revisit tendering system for construction work contracts

Industry body Ficci on Tuesday said it has urged the government to revisit the tendering system for construction work contracts, claiming that the current least-cost selection method or L1 may not be the most appropriate and suitable method to award a contract.

"...it is well founded that the current contract tendering system by government and public undertakings based on least-cost selection method has shortcomings given the number of infrastructure and other projects facing concerns of delay, quality and disputes, ultimately leading to time consuming arbitration and higher costs," K K Kapila, co-chairperson, National Committee on Infrastructure, Ficci, said in a statement.

Experience in India has shown that officials in procuring departments and agencies, in order to maintain utmost probity and transparency, prefer to adopt the least cost principle for the award of contracts. This in turn has resulted in bidders seeking to win contracts by putting in extremely low bids that are eventually found unworkable, leading to huge delays, cost overruns and disputes often ending in the termination of contracts, Kapila said.

It is necessary, therefore, to seriously examine our present procurement procedures to ensure that we achieve our objective of quality, timely completion of works contracts, within the stipulated costs, Kapila added.