The revised guidelines aim to ensure that bidders are assessed on their ability to execute contracts at the quoted prices, without discouraging genuine price competition or resorting to automatic rejection of low bids | Image: Bloomberg
The finance ministry has made it mandatory for government agencies to scrutinise bids quoting prices more than 30 per cent below the estimated cost in a government procurements, tightening checks on abnormally low bids to safeguard service and product quality.
The Department of Expenditure under the ministry has defined Abnormally Low Bids (ALBs) in government procurement, mandating scrutiny of bids falling below the prescribed threshold and seeking written clarifications wherever "concerns" arise over the bidder's ability to execute the contract at the quoted price.
"A bid quoting a price more than 30 per cent below the estimated cost shall mandatorily be examined as a potentially ALB," the department said in an office memorandum.
In such cases, the procuring entity would seek written clarifications from the bidder, including detailed price analyses of its bid price in relation to scope of work as given in the tender document.