Tendering is a critical process in procurement, where organizations invite bids from suppliers or contractors to carry out projects. Both India and other countries follow standard procedures, but practices can vary significantly due to legal, cultural, and economic differences. This article compares Indian tendering practices with global practices, highlighting key differences and real-world examples of their application.
In India, the tendering process is governed by various legal frameworks, including the Public Procurement Bill, Indian Contract Act 1872, and guidelines from the Central Vigilance Commission (CVC). Tendering is an essential process in public procurement and is mainly divided into two types: open and limited tendering.
The open tendering process is commonly used for large infrastructure projects, allowing all qualified bidders to participate. Limited tendering is used when only a select number of suppliers or contractors are invited to tender due to specialized requirements.
Example: The Indian Railways frequently uses open tendering for the procurement of rolling stock and track components. The tenders are advertised publicly through the Government e-Marketplace (GeM) platform, allowing suppliers across the country to participate. However, for specialized projects like railway signaling, limited tendering might be used to invite bids only from selected experts in the field.
Globally, tendering practices vary by country, but the overall process remains relatively similar. For example, in the European Union, the Public Procurement Directive sets out the rules for public procurement, which emphasizes fairness, transparency, and equal treatment of suppliers. The European Union encourages open tendering for public contracts to ensure that the procurement process is competitive and that taxpayers' money is spent efficiently.
In the United States, the Federal Acquisition Regulation (FAR) governs the procurement process. FAR encourages competitive bidding but allows flexibility for direct procurement or sole-source contracts in specific situations where only one supplier is available.
Example: In the United Kingdom, the National Health Service (NHS) frequently uses open tendering to procure medical supplies, equipment, and services. The tender process is transparent, with contracts often published on official government websites. In highly specialized sectors, such as pharmaceuticals, restricted tendering or RFP (Request for Proposal) methods may be used to ensure only the best-qualified suppliers are invited to bid.
In India, public procurement is influenced by a complex regulatory environment. The tendering process is governed by both central and state laws, and transparency remains a challenge due to bureaucratic inefficiencies. While the introduction of e-procurement platforms like GeM has improved transparency, the process can still be opaque, especially in government contracts.
Globally, countries such as the United States, Canada, and European Union member states have stricter regulations and more standardized processes for public procurement. Transparency is often ensured by publishing tenders and awards online, allowing public scrutiny of government contracts. The use of digital platforms for tendering is common, and there is a stronger emphasis on anti-corruption measures and auditability.
In India, the adoption of e-procurement platforms like GeM and Central Public Procurement Portal (CPPP) has significantly improved the tendering process, making it more efficient and accessible. However, the implementation of these systems across all sectors has been uneven, and challenges remain in rural or less-developed regions.
In contrast, countries like the UK, Singapore, and Australia have highly advanced e-procurement systems. For example, the UK Government’s e-Sourcing Platform allows suppliers to access tenders, submit bids, and track contracts in real-time. Similarly, Singapore’s GeBIZ platform is widely regarded as a model of digital procurement, facilitating a smooth process from tender submission to award.
In India, bid evaluation is based on both technical and financial criteria. However, corruption and favoritism sometimes undermine the process, especially in large public sector contracts. There have been instances of bids being evaluated based on subjective criteria, such as the reputation of the bidder or the contractor’s political connections.
Globally, the bid evaluation process is generally more transparent. For example, in the European Union, procurement rules require that evaluation criteria be clearly defined in the tender documents, ensuring that all bidders are evaluated according to the same standards. This reduces the chances of favoritism and ensures that the best value for money is achieved.
In India, highway construction projects are typically tendered through an open bidding process. The National Highways Authority of India (NHAI) invites international and domestic contractors to bid for large-scale projects, such as the Golden Quadrilateral project, which involved the construction of highways connecting major cities in India. Contractors submit their technical and financial bids, and the lowest bid is usually awarded the contract, assuming it meets the technical requirements.
The Crossrail project in London, which is one of Europe's largest infrastructure projects, used a global tendering process to select contractors. The project was tendered using a competitive bidding process, with strict technical and financial criteria. Contractors from across the world, including China, Germany, and the UK, competed for the work. The project has been subject to detailed scrutiny and transparency, with all contracts and award information available to the public through the UK government’s official channels.
In the United States, military contracts are often awarded through the Department of Defense’s procurement system, using a combination of open tendering and sole-source contracts. For example, the U.S. Army's procurement of advanced weapons systems often involves open tendering for large-scale contracts, while highly specialized equipment, such as certain cybersecurity systems, may be awarded to specific contractors through sole-source or negotiated contracts, as stipulated in the FAR.
The tendering practices in India and globally share common goals of transparency, competition, and fairness. However, significant differences exist in terms of regulatory frameworks, adoption of e-procurement technologies, and the strictness of bid evaluation criteria. While India has made strides in modernizing its tendering process, there is still room for improvement in terms of transparency, consistency, and the adoption of best practices followed in other countries. By learning from global examples and improving regulatory mechanisms, India can further enhance its tendering processes, ensuring fairer and more efficient procurement practices.