Bill to regulate govt purchases introduced
Live Mint, May 14 2012
A Bill covering all
government purchase contracts worth more than Rs 50 lakh was
introduced in Parliament on Monday in a push to reduce graft and
hold officials involved in the decision-making process
The Bill, introduced in
the Lok Sabha by finance minister Pranab Mukherjee, contains
norms that will regulate public procurement and ban bidders
found engaged in corruption.
Further, procurement by
all government departments as well as public sector units (PSUs)
will come under the ambit of the Bill.
Based on the
recommendations by a panel on public procurement under former
corporate affairs secretary Vinod Dhall, the Bill also
stipulates norms under which a public servant can be sent to
jail for six months to five years for accepting bribes and
wrongfully influencing bidding. Dhall’s recommendations had been
accepted by the government in February.
The Bill comes even as
the country has seen public agitations over corruption led by
activists such as Anna Hazare.
While all Union
government procurements are governed by the so-called General
Financial Rules, 2005, there is no overarching law. The Bill
will govern several aspects of procurement—from the
determination of the need for procurement to qualification of
bidders, bid evaluation criteria, price negotiations,
cancellation and award.
It will also regulate
offsets wherever applicable. On 6 April, Mint had first reported
that the government was working on a national policy on offsets
that will extend to all government imports, including by the
departments of defence, space, oil and gas, telecom and atomic
counter-trade obligations that have to be fulfilled by vendors
from a particular country selling equipment or commodities to
another country. Typically, they do this by generating business
in the buying country worth a certain percentage of the deal
Offset obligations can
also be fulfilled by the seller country by committing cheaper
long-term supplies of strategically important commodities,
including energy resources, up to a certain value in lieu of
goods bought. In such a transaction, the payment is made partly
with goods and services instead of money.
At present, only
equipment procured by the defence ministry is covered by an
offset obligation policy. In other cases, the offset agreements
are ad hoc and not based on any policy guideline. The Bill
stipulates that all procuring entities will be required to
publish information on the Central Public Procurement Portal.
“The Bill is fine. The
problem is vested interests, which can kill its spirit,” said
Pradeep Mehta, secretary general of Jaipur-based consumer
advocacy group CUTS International.
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