Manual for Procurement of Consultancy & Other Services — Study Notes (Ch 1–3)

GFR updated to 31.01.2026

Manual for Procurement of Consultancy & Other Services

The Government of India's procedural rule-book for hiring consultants and outsourcing other (non-consultancy) services. All nine chapters, with every monetary value updated to the GFR as amended up to 31.01.2026.

CH 1 · INTRODUCTION

Introduction to Procurement of Consultancy / Other Services

Scope of this Manual

The Ministries or Departments have been delegated full powers to make their own arrangements for procurement of goods and services that are not available on GeM. Common-use goods and services available on GeM are required to be procured mandatorily through GeM, as per Rule 149.

Comprehensive rules are contained in the GFR 2017, particularly its Chapter 6, the Delegation of Financial Powers Rules, the purchase-preference orders and the CVC guidelines.
There is no single law exclusively governing public procurement in India.
The nodal authority for revision and clarification of this Manual is the Procurement Policy Division, Department of Expenditure, Ministry of Finance.

Fig 1.1 · Hierarchy of the procurement framework

Article 299 sits at the apex — Government contracts must be in writing and executed by specifically authorised officers. Article 19(1)(g) (right to practise a profession) also has procurement implications.

Level	Instrument	What it lays down
Constitution	Article 299(1)	All contracts shall be made by an authority empowered by or under the orders of the President, executed on his behalf, and expressed to be so made.
Constitution	Article 19(1)(g)	The right to practise any profession, or to carry on any occupation, trade or business.
Statutes	Contract Act 1872 · Arbitration & Conciliation 1996 · Competition Act 2002 · IT Act 2000	The general law on which a procurement contract, its disputes, its competition and its electronic conduct rest.
Rules	GFR 2017, Chapter 6	The general rules for procurement of goods and services by all Ministries or Departments.
Delegation	DFPR · CVC guidelines · preference orders	Who may sanction what, and which classes of bidder enjoy a mandatory or preferential purchase.
Guidance	This Manual · Schedule of Procurement Powers	Procedure, and the entity's own delegation of powers at each stage of procurement.

§ 1.2

The statutes on which a Government contract rests

Fig 1.2 · Six statutes, and exactly where each one bites

A breach of the GFR is an administrative lapse attracting departmental action. A breach of the Prevention of Corruption Act or the penal law is a criminal offence and, on conviction, attracts debarment across every procuring entity.

Indian Contract Act, 1872 — the general law of contracts. Its Sections 182 to 238 contain the law of agency: a consultant or service provider acts as the Agent of the Procuring Entity, which is the Principal, and the Principal is vicariously liable for the acts of its agent, such as violations of labour law by the staff deputed. Standard Bidding Documents must address this liability.
Arbitration & Conciliation Act, 1996 — governs conciliation and arbitration of contractual disputes; the arbitral award is binding. Under Rule 227A, where the Ministry challenges an award, 75% of the award, which may include interest up to the date of the award, is paid to the contractor against a Bank Guarantee, into a designated escrow account.
Competition Act, 2002 — any collusion, bid rigging or anti-competitive behaviour that impairs the transparency, fairness and progress of the procurement process is a prohibited practice. Information for action before the Competition Commission of India is filed under the signature of a Joint Secretary-level officer.
Information Technology Act, 2000 — provides for the legal recognition of electronic records and digital signatures, on which e-publishing (Rule 159) and e-procurement (Rule 160) operate.
MSMED Act, 2006 — the Ministry of Micro, Small and Medium Enterprises has notified the procurement policy under its Section 11 [Rule 153(ii)]. Under Chapter V, payment to an MSE supplier shall not exceed 45 days, and delay attracts compound interest at three times the RBI bank rate.
Right to Information Act, 2005 — Section 4(1)(b) mandates suo-motu disclosure, and Sections 4(2) and 4(3) prescribe its dissemination. Procurement notices, tender enquiries, corrigenda, and details of the bid award — the vendor's name, the rate and the total value — are disclosed under Section 4.
Prevention of Corruption Act, 1988 and the Bharatiya Nyaya Sanhita — conviction under either, in the circumstances set out in Rule 151(i), debars a bidder from the procurement process of any procuring entity.

§ 1.3

Applicability & key definitions

Rule 177, GFR 2017

Consulting Service

Any subject matter of procurement, other than goods or works except those incidental or consequential to the service, which involves primarily non-physical, project-specific, intellectual and procedural processes where outcomes or deliverables would vary from one consultant to another. It includes professional, intellectual, training and advisory services, but does not include direct engagement of a retired Government servant.

Rule 197, GFR 2017

Non-Consulting Service

Any subject matter of procurement which involves physical, measurable deliverables or outcomes, where performance standards can be clearly identified and consistently applied. It includes maintenance, hiring of vehicles, outsourcing of building facilities management, security, photocopier service, janitor and office errand services, drilling, aerial photography, satellite imagery and mapping.

Consulting services typically involve expert or strategic advice — management, policy and communications consultants; feasibility studies; project management; engineering services; finance, accounting and taxation services; training and development.
The generic word "Services" covers Consultancy and Other services together, and excludes the appointment of an individual under any law.
These guidelines do not apply to projects funded by the World Bank or other international agencies, which are covered under Rule 264.

Fig 1.3 · Which basket does the task fall in?

Example of intellect dominating: underwater dam-safety inspection, where the analysis is the crux and the diving is incidental.

Nature of the task	Treated as	Illustration
Construction or repair of a civil asset	WORKS	Handled on the lines of procurement of works.
Repair, AMC or installation of a mechanical, electrical or ICT asset	GOODS	Handled on the lines of procurement of goods.
Intellectual or advisory content dominates; the physical part is incidental	CONSULTANCY	Underwater inspection of a dam for safety, where the analysis is the crux.
Physical, measurable deliverables against clear performance standards	OTHER SERVICES	Transport, logistics, courier, upkeep of buildings, drilling, mapping.
Bespoke software, cloud-based services, composite IT system integration	CONSULTANCY	Design, development, deployment, commissioning, hardware, bandwidth and post-go-live maintenance.
Outside agency engaged on a sustained basis for one year or more for work traditionally done in-house	OUTSOURCING	Security, horticulture, catering, housekeeping, messenger services.

Procuring Entity
Includes Ministries and Departments, CPSEs, and bodies substantially owned or controlled by, or substantially financed by, the Central Government. It does not include procurement for its own use from a subsidiary or joint venture in which a controlling share is held.

§ 1.4

Competent authorities & purchase powers

An authority competent to incur expenditure may sanction the procurement of services in accordance with the Delegation of Financial Powers Rules [Rule 145].
No separate sanction is required for services distinctly named in a work or project already sanctioned or approved.
Each entity may issue a Schedule of Procurement Powers, adding detail to the DFPR delegations on the basis of the risk at each stage of procurement.

§ 1.5

Basic aims — the Five R's of Procurement

Fig 1.4 · The Five R's

Each "R" is a balance point, not a maximum: the right quality is adequate quality, and the right price is a reasonable price consistent with that quality.

Right Quality — meets the basic need without superfluous or non-essential features.

Right Quantity — avoids purchase in excess of requirement and its inventory carrying cost.

Right Price — reasonable, and consistent with the quality required.

Right Time & Place — delivery when and where the requirement arises.

Right Source — a supplier reliable and competent to perform the contract.

The word "Right"
In each of the five parameters "Right" means optimal. Every procurement seeks the right balance of cost and requirement across the five. The parameters are framed for goods, and apply equally to services.

§ 1.6

Five principles of public procurement

The transparency principle.
The professionalism principle.
The broader obligations principle, which includes the restrictions and prior registration imposed on bidders from a country sharing a land border with India [Rule 144(xi)].
The extrinsic legal principle.
The public accountability principle.

§ 1.7

Standards of Financial Propriety — Rule 21, GFR

Every officer shall exercise the same vigilance in respect of expenditure incurred from public moneys as a person of ordinary prudence would exercise in respect of the expenditure of his own money.
The expenditure should not be prima facie more than the occasion demands.
No authority should exercise its powers of sanctioning expenditure to pass an order which will be directly or indirectly to its own advantage.
Expenditure from public moneys should not be incurred for the benefit of a particular person or a section of the people, unless the amount of expenditure involved is insignificant, or a claim for the amount could be enforced in a Court of Law, or the expenditure is in pursuance of a recognised policy or custom.
The amount of allowances, such as travelling allowances, granted to meet expenditure of a particular type should be so regulated that the allowances are not, on the whole, a source of profit to the recipients.
An authority giving financial concurrence should not later be drawn into a role that creates a conflict of interest.

§ 1.8

Public procurement infrastructure at the Centre

Department of Expenditure, MoF

Procurement Policy Division

Promotes uniformity and harmonisation, disseminates best practices, gives guidance, exercises oversight, builds capacity, and issues the procurement manuals. It is not intended to centralise procurement.

Rule 159 · e-publishing

GeM-CPPP

Designed, developed and hosted by NIC (MeitY) with the Department of Expenditure. It is mandatory for all Ministries, their attached and subordinate offices and autonomous and statutory bodies to publish their tender enquiries, corrigenda and details of bid awards on it.

The e-publishing instructions apply to all tender enquiries, Requests for Proposals, Requests for Expressions of Interest, and notices for pre-qualification or registration, whether advertised, issued to a limited number of parties, or to a single party.
Individual cases where confidentiality is required for reasons of national security are exempted, on the approval of the Secretary of the Ministry with the concurrence of the Financial Adviser; statistics of such exemptions go to the Department of Expenditure quarterly.

§ 1.9

Preferential / Mandatory purchase from certain sources

The latest directives on the subject are to be checked before a preference is applied.
The purchase-preference provision must be incorporated in the Notice Inviting Tender and in the Instructions to Bidders.

A · Policy for Micro & Small Enterprises — Rule 153(ii), GFR

Fig 1.5 · The MSE purchase-preference mechanism

The 25% is shared proportionately. Within it, the 4% SC/ST sub-target equals 16% of the 25%; if unfilled, it is met from other MSEs. An enterprise is SC/ST-owned where the proprietor is SC/ST, or SC/ST partners or promoters hold at least 51%.

Provision	Content
Source of the policy	Notified by the Ministry of MSME under Section 11 of the MSMED Act, 2006; applies to all Central Ministries, Departments and CPSUs irrespective of value or nature, and not to State Governments.
Eligibility	Only enterprises holding a valid Udyam Registration. Traders, distributors and sole agents, and works contracts, are excluded.
Concessions	Tender documents free of cost; exemption from Bid Security [Rule 170(i)]; prior turnover and prior experience may be relaxed. Exemption from Performance Security is not covered.
Price band	Where L1 is a non-MSE, an MSE quoting within L1 + 15% may supply up to 25% of the tendered value on matching the L1 price; the 25% is shared proportionately.
Sub-targets	Within the 25%, a 4% purchase preference for SC/ST-owned MSEs and 3% for women entrepreneurs. If not filled, it is met from other MSEs.
Non-divisible item	An MSE within the L1 + 15% band may be awarded the full tendered value.
"SC/ST-owned"	The proprietor is SC/ST; or SC/ST partners hold ≥ 51%; or SC/ST promoters hold ≥ 51% in a private limited company.
Payment	Not to exceed 45 days from supply; delay attracts compound interest at three times the RBI bank rate.

358

Items reserved for exclusive purchase from MSEs; the list is reviewed by a Committee chaired by Secretary, M/o MSME.

Sambandh

Portal launched 8 December 2017 to monitor procurement by CPSUs from MSEs.

CHAMPION

Portal for redressal of grievances of micro, small and medium enterprises.

SC/ST Hub

National SC/ST Hub (October 2016) and the Single Point Registration Scheme, both run by NSIC.

Startups — Rule 173(i), GFR
The condition of prior turnover and prior experience may be relaxed for Startups recognised by DPIIT, subject to their meeting quality and technical specifications, and to suitable provision being made in the bidding document. A start-up is an entity up to 10 years from incorporation, whose turnover in any financial year has not exceeded ₹100 crore, and which is working towards innovation or improvement, or has a scalable business model with a high potential for employment generation.

B · Preference to Make in India — Rule 153(iii), GFR

Fig 1.6 · Supplier classes & the 20% preference margin

Where the Nodal Ministry notifies sufficient local capacity & competition, Class-I becomes the sole eligible class.

Class of supplier	Local content	Entitlement
Class-I local supplier	≥ 50%	Eligible for purchase preference; the sole eligible class where the Nodal Ministry notifies sufficient local capacity and competition.
Class-II local supplier	≥ 20%	May participate in the bid, but gets no purchase preference.
Non-local supplier	< 20%	Eligible to bid only where a Global Tender Enquiry is issued.

Divisible goods and works. Where L1 is not a Class-I local supplier, 50% of the order goes to L1, and the lowest Class-I supplier bidding within the margin of purchase preference of 20% is invited to match L1 for the remaining 50%.
Non-divisible items and services procured on price alone. The lowest Class-I supplier within the margin is invited to match L1; if no such supplier matches, the contract may be awarded to L1.
Verification. Local content is self-certified. Above ₹10 crore, a certificate from the statutory auditor or cost auditor, or from a practising cost accountant or chartered accountant, is required.
Relaxation. The administrative Department, with the approval of its Minister-in-charge and for reasons recorded, may reduce the minimum local content, reduce the margin of purchase preference, or exempt an item or entity. A Standing Committee chaired by Secretary, DPIIT oversees the Order.

20%

Margin of purchase
preference

₹5 lakh

Below this estimated value
the Order does not apply

₹200 cr

No Global Tender Enquiry
up to this value

2 years

Debarment for a false
declaration [Rule 151(iii)]

The Order applies to goods, works and services; "works" includes turnkey and EPC contracts, and "services" includes System Integrator contracts.
A procurement shall not be split into smaller values to avoid the Order.
A false declaration of local content is a breach of the Code of Integrity under Rule 175(1)(i)(h).

§ 1.10–1.11

When engagement of a consultant is justified

The requisite expertise or capacity is not available in-house [Rule 180].
A qualified consultant is needed for a specialised, high-quality service.
Impartial advice, free of any conflict of interest, is required.
Transfer of knowledge, training or capacity-building is sought as a by-product.
Information, or new methods and systems, have to be acquired.
Organisational change has to be planned and implemented.
Economy, speed and efficiency are weighed against the additional commitment of staff, resources, money and time.

Approval of the competent authority is to be obtained before engaging a consultant [Rule 180], and the assignment must be well defined in content and in the time frame for its completion [Rule 178].
Consultancy is procured by unrestricted competition among shortlisted firms, through a two-stage process in which quality is evaluated before cost. Other services follow a simpler process, on the lines of goods and works.
The Ministry shall estimate a reasonable expenditure by ascertaining prevalent market conditions and consulting other organisations engaged in similar activities [Rule 182].

§ 1.12–1.13

Law of Agency & proactive disclosure

Provision	What it requires
Sections 182–238, Indian Contract Act, 1872	The consultant or service provider is the Agent of the Procuring Entity, which is the Principal. The Procuring Entity is vicariously liable for the acts of its agent, including violations of labour law by the staff deputed by the provider. Standard Bidding Documents must address this.
Section 4(1)(b), RTI Act, 2005	Every public authority shall publish the prescribed categories of information suo motu.
Sections 4(2) & 4(3), RTI Act, 2005	Prescribe the manner and the means of dissemination of that information.
Disclosable under Section 4	Procurement notices and tender enquiries; corrigenda issued on them; and the details of the bid award — the vendor's name, the rate and the total value.

§ 1.14–1.15

Procurement cycle & the Concept Paper

Fig 1.7 · The five stages of the procurement cycle

The Concept Paper plays the role that an Indent plays in the procurement of goods.

Preparation of the Concept Paper or Procurement Proposal, and obtaining of in-principle approval.
Preparation of the Terms of Reference for consultancy, or the Activity Schedule for other services, with the cost estimate; administrative and budgetary approval is sought.
Shortlisting of consultants through an Expression of Interest — formulating it, publishing it, and receiving and evaluating the responses.
Issue of the Request for Proposals; evaluation of the technical and then the financial proposals; selection, negotiation where required, and award of the contract.
Monitoring of the assignment.

Concept Paper — Rule 181, GFR

The Ministry or Department should prepare, in simple and concise language, the requirement, the objectives and the scope of the assignment. The eligibility and pre-qualification criteria to be met by the consultants should also be clearly identified at this stage. It performs the role that the Indent performs in the procurement of goods.

Purpose or Objective Statement — describes the subject matter of the procurement, and shows its fit with the short-term and strategic goals of the organisation.
Service Outcome Statement — the qualitative and quantitative outcomes, the time-frame, and a rough cost estimate, which fixes the level of approval required under the Schedule of Procurement Powers.
Justification — the requirement set against in-house capability.

In-principle administrative approval and budgetary sanction by the Competent Authority precede all further stages.

Self-test

Chapter 1 Quiz — framework, definitions & preferences

Eight UPSC-style questions from Chapter 1. Pick an answer to lock it; the explanation appears below.

Score 0 / 0

⚡ Chapter 1 — Quick Recap

Concept	Key Fact
Apex statutory provision	Article 299; no exclusive procurement law
Mandatory GeM purchase	Rule 149, GFR 2017
Consulting Service	Rule 177 — non-physical, intellectual & procedural; excludes retired Govt servants
Non-Consulting Service	Rule 197 — physical, measurable deliverables
Outsourcing	Sustained engagement of one year or more
Nodal authority	PPD, Dept. of Expenditure, MoF
Five R's	Right quality, quantity, price, time & place, source
Financial propriety	Rule 21 — ordinary-prudence vigilance
e-Publishing portal	GeM-CPPP, hosted by NIC (MeitY) — Rule 159
MSE payment	45 days; delay → compound interest at 3× RBI bank rate
MSE price band	L1 + 15% → up to 25%; SC/ST 4%, women 3%
Make in India	Margin 20%; Class-I ≥ 50%, Class-II ≥ 20% local content
MII thresholds	Not applicable below ₹5 lakh; auditor certificate above ₹10 crore
Startup	≤ 10 yrs, turnover ≤ ₹100 cr, DPIIT-recognised [Rule 173(i)]
Concept Paper	Rule 181 — Purpose + Outcome + Justification

CH 2 · GOVERNANCE

Consultants, Service Providers & Governance Issues

Coverage

The sources from which consultants and service providers are drawn; the Code of Integrity for Public Procurement, which binds officials and bidders alike; the Integrity Pact and its Independent External Monitors; and the debarment of errant firms under Rule 151.

Consortium / Joint Venture

Firms in association

For large or complex assignments, firms associate as a Joint Venture, or as sub-consultants. In a JV all members sign the proposal and are jointly and severally liable; one member is designated the lead member, and the Procuring Entity deals only with the lead.

Consultancy / Service Firms

The principal source

Classified as international, bringing international experience and charging international rates, or as national, generally domestic in operation and charging lower rates.

Individual Consultants

Where a team is not needed

Engaged where the assignment does not require a team, and no outside support is needed. Where more than three experts are required, a team from a firm should be used. Individuals are not normally engaged for project preparation, unless the task is simple or repetitive.

Agencies, Institutions & NGOs

Institutional providers

Government and semi-Government agencies, universities and professional institutions. NGOs are advantageous in assignments requiring community participation or local knowledge.

Value and number of partners. A Joint Venture may be permitted for complex or large assignments above a stated value, say ₹5 crore, and the maximum number of partners is limited, say to three.
Share of the qualifying limit. Each partner should meet at least 25%, and the lead partner at least 50%, of the qualifying limit prescribed for experience and financial turnover.
Conflicting association. A firm may submit only one proposal for an assignment. If it submits or participates in more than one, all such proposals stand disqualified. It may be a sub-consultant or a team member in more than one proposal only where the RfP expressly permits.

Retired Government servant — Rule 177, GFR
Consulting service does not include direct engagement of a retired Government servant. Such a person is not to be engaged against a regular vacant post, but only for a specific task of specified duration, with clear output-related goals.

§ 2.2

Code of Integrity for Public Procurement

No official of a procuring entity, and no bidder, shall act in contravention of the Code [Rule 175(1)]. Both sign declarations undertaking to abide by it.
Transgression may lead to removal from the list of registered suppliers, cancellation of the contract, banning or blacklisting, or action before the Competition Commission of India.

Fig 2.1 · The six prohibited practices

Mnemonic — C-F-A-C-C-O: Corrupt · Fraudulent · Anti-competitive · Coercive · Conflict of interest · Obstructive.

Prohibited practice	Conduct that constitutes it
Corrupt	Making an offer, solicitation or acceptance of a bribe, reward, gift or any material benefit, either directly or indirectly, in exchange for an unfair advantage in the procurement process, or to otherwise influence it.
Fraudulent	Any omission or misrepresentation that may mislead, or attempt to mislead, so that a financial or other benefit may be obtained or an obligation avoided; and making a false declaration or providing false information to participate in a tender or secure a contract.
Anti-competitive	Any collusion, bid rigging or anti-competitive behaviour that may impair the transparency, fairness and progress of the procurement process.
Coercive	Any coercion, or threat to impair or harm, directly or indirectly, any party or its property, to influence the procurement process.
Conflict of interest	Any financial or business transaction between the bidder and an official of the procuring entity, related to the tender or the execution of the contract, which can affect the decision of the entity; and improper use of information provided by the entity with intent to gain unfair advantage or personal gain.
Obstructive	Obstruction of any investigation or auditing of a procurement process; destroying or falsifying evidence; and making false statements to investigators.

Statutes

The statutes invoked against an errant bidder

Fig 2.2 · The penal & competition statutes, and the consequence each triggers

Debarment under Track 1 needs a conviction by a court; debarment under Track 2 needs only the procuring entity's own determination that the Code of Integrity was breached.

Prevention of Corruption Act, 1988. A bidder shall be debarred if he has been convicted of an offence under this Act [Rule 151(i)(a)]. Under the Integrity Pact, bidders promise that they will commit no offence under this Act, and no illegitimate benefit will be offered to any official.
Bharatiya Nyaya Sanhita, or any other law for the time being in force. A bidder shall be debarred on conviction for causing any loss of life or property, or causing a threat to public health, as part of the execution of a public procurement contract [Rule 151(i)(b)].
Reach of that debarment. The bidder, or any successor of the bidder, shall not be eligible to participate in a procurement process of any procuring entity for a period not exceeding three years from the date of debarment. The Department of Expenditure maintains the list, which is displayed on the Central Public Procurement Portal [Rule 151(ii)].
Competition Act, 2002. Collusion and bid rigging are prohibited under the Code of Integrity. Information for action before the Competition Commission of India is filed under the signature of a Joint Secretary-level officer.

Contractual

Bid security forfeited, contract cancelled, payments recovered with interest.

Administrative

Removal from the list of registered suppliers, and debarment under Rule 151.

Criminal

Prosecution under the Prevention of Corruption Act or the penal law, and proceedings before the CCI.

§ 2.2.3–2.2.5

Conflict of interest & proactive disclosure

A consultant shall provide professional, objective and impartial advice, and shall at all times hold the client's interest paramount, without any consideration for future work.
A conflict of interest must be disclosed; failure to disclose leads to disqualification of the proposal, or termination of the contract.
Unfair competitive advantage is avoided by issuing the Request for Proposals, and all information relating to it, to all shortlisted consultants simultaneously.

Unless the data sheet of the RfP provides otherwise, a consultant shall not be hired where any of the following exists:

Conflicting activities. A firm, or any of its affiliates, engaged to provide goods, works or non-consultancy services for a project is barred from providing the consultancy related to those goods, works or services, and the converse also applies.
Conflicting assignments. An assignment which, by its nature, conflicts with another assignment of the same consultant.
Conflicting relationships. A close business or family relationship with staff of the Procuring Entity who are directly or indirectly involved in the preparation of the ToR, in the selection process, or in the supervision of the contract, unless the conflict is resolved in a manner acceptable throughout the process.

Both parties shall suo-moto declare any conflict of interest as and when it arises.
A bidder shall disclose any previous transgression of the Code with any entity in any country during the last three years, or of being debarred by any other procuring entity, whether or not it is asked to do so [Rule 175(1)(iii)].
Voluntary disclosure does not result in automatic disqualification; the conflict may be evaluated and mitigated.

§ 2.2.6

Punitive provisions for violating the Code

Fig 2.3 · Graded consequences, by stage of the procurement

The CCI route addresses anti-competitive practices; the information is filed under the signature of an officer of Joint Secretary level.

Stage reached	Measures that may be taken
Bid under consideration	Forfeiture or encashment of the bid security; calling off of pre-contract negotiations; and rejection of the bid with exclusion of the bidder.
Contract already awarded	Cancellation of the contract with recovery of the loss; forfeiture of any other security or bond furnished; and recovery of the payments already made, with interest at the prevailing rate.
In either case	Removal from the list of registered suppliers and banning for not less than one year; reference to the Competition Commission of India, filed by a Joint Secretary-level officer, for anti-competitive practices; and disciplinary or criminal proceedings.

§ 2.2.7

Conduct of public servants — risks & mitigations

Risk area	Mitigation
Hospitality	Never to be solicited, directly or indirectly. It must not involve significant travel, an overnight stay or a trip abroad, and must not publicly identify the recipient with a firm. Particular care is needed with firms in current or imminent tenders.
Gifts	Never to be solicited. Gifts above the limit in the conduct rules are not to be accepted or retained. Cash, gift cheques and cash-exchangeable vouchers are never acceptable, regardless of amount. A gift received inadvertently is returned, or reported and deposited in the Toshakhana or Treasury.
Private purchases	Special facilities or discounts are not to be sought or accepted on private purchases from suppliers and contractors with whom there are official dealings, particularly Rate-Contract holders.
Event sponsorship	No non-official pecuniary transaction. Sponsorship or donation for a cultural, social, sporting, religious or charitable event is not to be solicited from contractors or suppliers.

§ 2.3

Integrity Pact & Independent External Monitors

Integrity Pact

A pre-bid pact between the buyer and the seller, committing both to ethical conduct and transparency from the pre-selection stage through to the completion of the contract. Entering into it is a preliminary qualification: a bid unaccompanied by a duly signed Integrity Pact is non-responsive and is rejected.

Ministries and Departments mandated by the Ministry of Finance to adopt the Integrity Pact above a threshold value.

80–90%

Share of procurement expenditure that the threshold should cover; decided with the approval of the Minister-in-charge.

The Procuring Entity commits to act with equity and reason, and neither to seek nor to accept any illegitimate benefit.
Bidders commit not to offer any illegitimate benefit to officials, and to commit no offence under the Prevention of Corruption Act, 1988 or the penal law in force.
There shall be no undisclosed agreement among bidders on prices, specifications or sub-contracts.
Fall Clause — bidders confirm that they have not, and will not, sell the same item below the price quoted in the bid.
Foreign bidders disclose their Indian agents, and Indian bidders disclose their foreign principals.
Payments made to agents, brokers or intermediaries are disclosed, as are past transgressions over the specified period.

Fig 2.4 · Independent External Monitors at a glance

Monitors are independent and neutral, get access to all documents on an allegation, ideally meet once every two months, and may report serious irregularities directly to the CVC.

Maximum number of Independent External Monitors, approved by the CVC.

< 70

Age limit; persons of high integrity and reputation.

3 + 2

Initial term of three years, extendable by two — a maximum tenure of five years.

2 months

Interval at which the Monitors should ideally meet.

Eligible persons are officers retired from the top management of Government departments or public sector undertakings, though not of the same organisation; eminent persons; retired judges of the High Courts and the Supreme Court; and senior executives from the private sector.
At least one Monitor is named in the Notice Inviting Tender.
On an allegation, the Monitors have access to all documents and books of the organisation, and they may report serious irregularities directly to the CVC.
Their recommendations are advisory and are not legally binding on the organisation, and their appointment does not affect the role of the Chief Vigilance Officer.

§ 2.4

Debarment of suppliers, contractors & consultants

Fig 2.5 · Two debarment tracks under Rule 151

Debarment is an executive function, not a task for the Vigilance Department. A Joint Secretary or Additional Secretary may be the competent authority for a single-Ministry order.

Feature	Rule 151(i)–(ii) — conviction	Rule 151(iii) — breach of the Code
Trigger	Conviction of an offence under the Prevention of Corruption Act, 1988, or under the Bharatiya Nyaya Sanhita or any other law in force, for causing loss of life or property or a threat to public health as part of the execution of a public procurement contract.	The procuring entity determines that the bidder has breached the Code of Integrity.
Maximum period	3 years	2 years
Reach	The procurement process of any procuring entity; the successor of the bidder is also ineligible.	Only the procurement undertaken by that entity.
List maintained by	Department of Expenditure, displayed on the Central Public Procurement Portal.	The Ministry or Department, displayed on its own website.
Safeguard	No bidder shall be debarred unless he has been given a reasonable opportunity to represent against the debarment [Rule 151(iv)].	Ordinarily, the period should be not less than six months.

Type 1

Debarment by a single Ministry

Issued by the Ministry itself for a period not exceeding two years. It operates only within that Ministry and its attached and subordinate offices, autonomous bodies and CPSUs, and is not circulated. A Joint Secretary or Additional Secretary may be the competent authority. Debarment is an executive function, and is not entrusted to the Vigilance Department.

Type 2

Debarment across all Ministries

Issued by the Department of Expenditure after the proposing Ministry, with the approval of its Secretary, sends a self-contained note; DoE verifies conformity with Rule 151. Pending that decision, the firm remains under suspension only in the proposing Ministry. DoE may also act suo-moto.

Allied firms. Concerns under the effective influence of the debarred firm, through common management, majority interest or shareholding, or control. All successor firms are allied firms, and debarment extends to them automatically.
Joint Ventures. Where a JV or consortium is debarred, all its partners stand debarred for the specified period, and are named in the order.
Effect on the bid. The bid of a debarred firm is ignored. If it was L-1, the next lowest bidder becomes L-1, and the debarred firm's bid security is returned.
Commencement and existing contracts. The period runs from the date of issue of the order. Contracts concluded before the order are unaffected. GeM may debar a firm for up to two years.
Revocation. The order is automatically revoked on expiry of the period, and no formal order is necessary. The competent authority may revoke it earlier if the disability already suffered is considered adequate.

Self-test

Chapter 2 Quiz — players, integrity & debarment

Eight UPSC-style questions from Chapter 2. Pick an answer to lock it; the explanation appears below.

Score 0 / 0

⚡ Chapter 2 — Quick Recap

Concept	Key Fact
Individual vs team	More than 3 experts → use a firm's team
JV liability	Jointly & severally liable; lead ≥ 50%, others ≥ 25% of qualifying limit
One-proposal rule	Multiple proposals by one firm → all disqualified
CIPP prohibited practices	6: corrupt, fraudulent, anti-competitive, coercive, conflict of interest, obstructive
Cash gifts	Never acceptable; inadvertent → Toshakhana/Treasury
CCI referral	Filed by a Joint Secretary-level officer
Bid rigging	Presumed anti-competitive under the Competition Act, 2002
Integrity Pact reach	15 Ministries; threshold to cover 80–90% of spend
IEMs	Max 3, age < 70, term 3+2 = 5 yrs, CVC-approved, advice not binding
Debarment — conviction	≤ 3 years, all entities; PC Act 1988 or Bharatiya Nyaya Sanhita
Debarment lists	Conviction list by DoE on CPPP; integrity-breach list on Ministry website
Debarment — integrity breach	≤ 2 years, single entity; ordinarily ≥ 6 months
All-Ministry debarment	Issued by DoE, MoF; allied & successor firms auto-included

CH 3 · CONTRACTS & SELECTION

Types of Contracts & Systems of Selection

Coverage

The types of contract, which fix how payment is linked to performance, and the systems of selection — LCS, QCBS, SSS and FBS. The choice of contract type should be guided by Value for Money. An inappropriate type results in poor competition, disputes, and failure of the assignment.

Fig 3.1 · The five contract types — what payment is tied to

Whatever the type, two safeguards recur: pay only against a certificate of acceptance, and set an upper limit of total payments beyond which the competent authority must review any extension.

Type of contract	Payment is linked to	Used for
Lump Sum (Firm Fixed Price)	Clearly specified outputs, milestones and deliverables.	Simple planning and feasibility studies, environmental studies, standard design, and data-processing systems. The proposal includes all prices, so no arithmetical correction and no price adjustment is made during evaluation.
Time-Based (Retainer-ship)	Agreed hourly, daily, weekly or monthly rates for named staff, plus reimbursables.	Complex studies, construction supervision, advisory services and most training. Rates include salary, social costs, overhead, fee or profit, and allowances.
Percentage (Success Fee)	A percentage of the estimated or actual project cost, or of the cost of goods procured or inspected.	Architectural services, and procurement and inspection agents. Among the technically qualified, the lowest percentage quoted is selected.
Retainer-ship cum Success Fee	A monthly time-based retainer together with a percentage success fee.	Banks and financial firms preparing companies for sales or mergers, notably privatisation, and organisational restructuring.
Indefinite Delivery (Price Agreement)	The unit rate quoted, applied to the time or quantum actually used.	On-call advisers, dispute-resolution adjudicators, procurement advice, document management, taxi services and temporary manpower. There is no commitment on quantum.

For other (non-consultancy) services the contract may be lump-sum, time-based, unit or item-rate (a taxi paid per kilometre), or indefinite-delivery, or a mixture of these.

§ 3.2

Lump Sum (Firm Fixed Price) Contract

Risk	Mitigation
Quality and scope of the output are not linked to payment, giving a temptation to cut corners, and disputes arise on interpretation.	Use the type only where quality, scope and timing are clearly defined; record acceptance; and pay only against a certificate of acceptance.
Time over-run, since time is not linked to payment.	Monitor the output every month against the planned time-line.

§ 3.3

Time-Based (Retainer-ship) Contract

Risk	Mitigation
Quality and scope are not linked to payment.	Evaluate the quality and scope, and release payment only against acceptance certificates.
Performance in a period is not linked to payment, so paid staff may be used in a dilatory manner.	Monitor closely, with monthly reporting of payouts and of the work achieved to the competent authority.
Time and cost over-run, the major risk, since delay benefits the consultant.	Include an upper limit of total payments. Once the limit is reached or the period exceeded, the competent authority reviews any extension.

§ 3.4–3.5

Percentage & Retainer-cum-Success Fee Contracts

Percentage contract

Risk of bias against economic design

Since the fee rises with the project cost, the consultant has no incentive to design economically. For architectural services the type is recommended only on a fixed target cost, with the services precisely defined.

Retainer + success fee

Carries both sets of risks

All the risks of the Percentage type and of the Time-Based type apply, and the same mitigations are used — payment against acceptance certificates, monthly reporting, and an upper limit of total payments.

§ 3.6

Indefinite Delivery Contract (Price Agreement)

Risk	Mitigation
Over-utilisation — usage may exceed the actual need, as the scrutiny of each call is less intense.	Scrutinise the need assessment; lay down a maximum contract value; require the competent authority's approval to exceed it; and escalate reporting above a monthly payout benchmark.
Quality and scope, and performance in each period, are not linked to payment.	Pay only against acceptance certificates, with close monitoring and monthly reporting.
Time and cost over-run.	Include an upper limit of total payments; the competent authority reviews any extension once it is reached or exceeded.

§ 3.7

Systems of selection of service providers

Since the quality of consultancy is not tangibly measurable, selection is normally a two-stage process: capable sources are first shortlisted through an advertised Expression of Interest, and the shortlisted firms then submit technical and financial proposals in separate sealed envelopes.
Technical proposals are evaluated without access to the financial proposals, which are opened only after the evaluation of quality is complete.
Other (non-consultancy) services are normally selected on the lowest price, on the lines of goods and works; Single Source Selection is used only in special circumstances.

Fig 3.2 · Choosing the system of selection

LCS is the simplest and quickest method, and any other method needs justification. A 100% cost weight in QCBS approximates LCS.

Minimum number on the
short list [Rule 184]

Maximum, generally,
on the short list

Stages in the
selection process

80%

Cap on technical
weightage [Rule 192(iv)]

Lack of competition is not determined solely on the basis of the number of bidders. Even where only one bid is submitted, the process may be considered valid provided the following conditions are satisfied [Rule 173(xx)]:

The procurement was satisfactorily advertised, and sufficient time was given for submission of bids.
The qualification criteria were not unduly restrictive.
The prices are reasonable in comparison to market values.

Rule 173(xxi)
Where a limited tender or an open tender results in only one effective offer, it shall be treated as a single tender contract.

§ 3.8

Least Cost System — Rule 193, GFR

Rule 193

LCS is appropriate for assignments of a standard or routine nature, such as audits and the engineering design of non-complex works, where well-established methodologies, practices and standards exist. Unlike QCBS, there is no weightage for the technical score in the final evaluation, and the responsive technically qualified proposal with the lowest evaluated cost shall be selected.

The technical and financial proposals are submitted together. A minimum qualifying mark is set, the benchmark being normally 75 out of 100, or a simpler pass/fail criterion is used, such as at least two similar assignments, or a turnover of at least ₹10 crore.
The technical proposals are opened and evaluated first, and the financial bids of the non-responsive bidders are returned unopened.
LCS is the simplest and quickest method; any other method requires justification.

§ 3.9

Quality and Cost Based Selection — Rule 192, GFR

The quality of the technical proposals is scored as per the criteria announced in the RfP. Only those responsive proposals that achieve at least the minimum specified qualifying score are considered further.
After the financial proposals of the responsive, technically qualified bidders are opened and scored, a final combined score is arrived at by giving predefined relative weightages to the score of quality and the score of the financial proposal.
The RfP shall specify the minimum qualifying score for quality, and the relative weightages to be given to quality and cost, determined for each case according to the relative importance of quality against cost — 70:30, 60:40, 50:50 and the like. The proposal with the highest weighted combined score shall be selected.
The weightage of the technical, that is non-financial, parameters shall in no case exceed 80 per cent.

Fig 3.3 · QCBS worked example — 70:30, qualifying mark 75

Under LCS the same three bids would give the contract to B at ₹100. The 70% quality weight is precisely what buys C's superior technical score.

Nature of the assignment	Remarks	Quality / Cost
Highly complex, or with downstream consequences, or specialised	QCBS with a higher technical weightage	80 / 20
Of moderate complexity	The majority of cases fall here	75–65 / 35–25
Standard or routine — auditors, procurement agents	LCS is appropriate	60–50 / 40–50

QCBS should not be selected where LCS or another method would be more appropriate; the choice is to be justified.
A weightage other than 70:30 is to be adequately examined and justified.
Subjectivity in marking is addressed by laying down objective marking criteria, grading the unavoidable subjectivity, and providing for conciliation or moderation of widely disparate marks.

§ 3.10

Single Source Selection / Consultancy by nomination — Rule 194, GFR

Tasks that represent a natural continuation of previous work carried out by the firm.
An emergency situation, a situation arising after a natural disaster, or a situation where timely completion of the assignment is of utmost importance.
Situations where execution of the assignment may involve the use of proprietary techniques, or where only one consultant has the requisite expertise.
Under some special circumstances, where adequate justification exists in the context of the overall interest of the Ministry or Department. Full justification is recorded in the file, and the approval of the competent authority obtained before resorting to single-source selection.
Fairness and equity shall be ensured, and a procedure put in place so that the prices are reasonable and consistent with market rates for tasks of a similar nature; the required consultancy services shall not be split into smaller-sized procurement.

Report to

The Secretary in ministries and departments, the Board of Directors in PSUs, banks and insurers, or the Chief Executive where there is no board.

Quarterly

Frequency at which a report on awards made on nomination basis is submitted.

≥ 10%

Proportion of such cases that the audit committee may be required to check.

§ 3.11

Fixed Budget – based Selection

Besides QCBS, LCS and SSS, FBS is also allowed, under which the cost of the consulting services is fixed as a budget stated in the tender document.

The services are simple and/or repetitive, and can be precisely defined.
The budget can be reasonably estimated, from credible estimates or from previous successful selections.
The budget is sufficient for the consultant to perform the assignment.

First route

Competitive process on quality alone

A competitive process based only on quality [Rule 192(i)]. Among the proposals within the stated budget, the one with the highest technical score is selected.

Second route

Empanelment

For repetitive assignments, selection is made from a panel on public-interest considerations — timeliness, practicability and prior assignments — with a fixed budget for each assignment.

Self-test

Chapter 3 Quiz — contract types & selection methods

Eight UPSC-style questions from Chapter 3. Pick an answer to lock it; the explanation appears below.

Score 0 / 0

⚡ Chapter 3 — Quick Recap

Concept	Key Fact
Preferred contract	Lump Sum — no price adjustment; pay against acceptance certificate
Time-Based safeguard	Include an upper limit of total payment; CA reviews extension
Percentage contract pick	Lowest percentage wins; discouraged for design (no economy incentive)
Indefinite Delivery	Like a Rate Contract; selected on unit rate; set a max value
Shortlist size	Not fewer than 3, not more than 8 firms
LCS (Rule 193)	For standard/routine work; benchmark ~75/100; lowest evaluated cost wins
QCBS (Rule 192)	Benchmark 70–80/100; typical weight 70:30, technical ≤ 80%
QCBS Table 3	Complex 80/20; moderate 75–65/35–25; routine 60–50/40–50
QCBS tie-break	In favour of the highest technical score → ranked H-1
SSS (Rule 194)	Justification + CA approval; report quarterly; audit ≥ 10%
FBS	Budget fixed in tender; simple/repetitive work; highest tech score within budget
Single bid	Valid if well-advertised, non-restrictive criteria & reasonable price [Rule 173(xx)]

CH 4 · PREPARING

Preparing for Procurement of Consultancy Services

Terms of Reference — Rule 185, GFR

The ToR plays the role that the Description, Quantity and Technical Specification play in the procurement of goods. It must be comprehensive and unambiguous, yet not so detailed and inflexible that the competing consultants are prevented from proposing their own methodology and staffing.

Fig 4.1 · The five contents of a Terms of Reference

Key professionals are usually named in the ToR, and their credentials carry weightage in the technical evaluation. An activity-based ToR is preferred where the team is small and flexibility is needed.

A precise statement of objectives.
An outline of the tasks to be carried out.
The schedule for completion of the tasks.
The support or inputs to be provided by the Ministry or Department to facilitate the consultancy.
The final outputs that will be required of the consultant.

Activities, not methodology
The Detailed Scope of Work describes only the activities, and not the approach or methodology, which is the consultant's task; suggestions may nevertheless be offered. The tasks are sequenced over a timeline, best shown as a bar or Gantt chart. Such a ToR is activity-based — a single description of what the team as a whole will provide — rather than position-based, and is preferred where the team is small and flexibility is needed. Key professionals are usually named, and their credentials carry weightage in the technical evaluation.

§ 4.1

Deliverables & the four reports

Fig 4.2 · The four reports across the life of an assignment

The Inception Report brings out inconsistencies in the ToR, problems of staffing, or deficiencies in the assistance to be given by the Procuring Entity, and gives confidence that the assignment can proceed as planned.

Report	When	Content and purpose
Inception Report	~ 6 weeks after commencement	Brings out inconsistencies in the ToR, problems of staffing, or deficiencies in the assistance to be given by the Entity, and gives confidence that the assignment can proceed as planned.
Progress Reports	Monthly or bimonthly	Keep the Entity informed. Feasibility and design studies at two-month intervals; technical assistance and construction supervision monthly. Time-stamped photographs are encouraged.
Interim Reports	Phased assignments	The Entity should take not more than 15 days to review and approve a draft interim report, as it may affect the later phases.
Final Report	At completion	The consultants alone are responsible for the findings. If they do not accept the Entity's comments, the reasons are recorded in the report.

For each deliverable the ToR fixes the format, the frequency, the content, the number of copies and the language.
The ToR template also covers the background and project context; the purpose and service-outcome statement; the detailed scope with its schedule; the expected key professionals and their expertise; capacity-building and transfer of knowledge; the background material to be provided; the facilities such as conveyance, office space and secretarial assistance; the institutional arrangements; and the review procedure of the Consultancy Monitoring Committee after award.

§ 4.2

Estimating costs, setting the budget & seeking approval

Fig 4.3 · How the cost estimate is built up

Estimating the cost is not a formality: the estimate fixes the level of the competent authority whose approval must be taken, and it is the yardstick against which an abnormally low bid is later judged.

Category (a)

Fee or Remuneration

Fixed according to the type of contract. Staff remuneration rates include basic salary, social charges, overheads, fees or profit, and allowances. The estimate provides for forecast inflation over the period of the assignment.

Category (b)

Reimbursable Costs

Logistics, being city, national and international travel and stay; physical inputs such as vehicles and laboratory equipment; support services; contingencies and profit; and taxes and duties.

The Ministry proposing to engage a consultant shall estimate a reasonable expenditure by ascertaining the prevalent market conditions, and by consulting other organisations engaged in similar activities [Rule 182].
Costs are normally estimated as unit rates multiplied by quantities; some items, such as contingencies and support services, are taken on a lump-sum or percentage basis.
A mismatch between the cost estimate and the ToR misleads the consultants about the scope and depth desired, and causes problems at negotiation or during implementation.

§ 4.3

Finalising the ToR & developing the procurement plan

The scope in the ToR must be compatible with the available budget. All the required tasks must be included, and adequate budget allocated; a series of iterations may be needed.
The approval of the competent authority to the ToR is taken before proceeding further; after administrative approval, budget provision is made, or confirmed at the Revised Estimate stage. Procurement may be initiated only after such budgetary provision or confirmation.
Where the consultancy is one component of a larger project, the Entity develops a synchronised procurement plan, sequencing all the components and choosing the method of selection and the type of contract for each. A construction-supervision consultant, for instance, must be mobilised before the award of the construction contract.
All Ministries and Departments shall prepare an Annual Procurement Plan before the commencement of the year, and place it on their website [Rule 144(x)].

§ 4.5

e-Procurement — Rule 160, GFR

Fig 4.4 · The e-procurement mandate and its three exits

The e-publishing duty under Rule 159 is separate from the e-procurement duty under Rule 160: the first is about publishing the notice, the second about receiving the bid.

Provision	Content
The mandate	It is mandatory for Ministries and Departments to receive all bids through e-procurement portals, in respect of all procurements.
Choice of portal	Ministries which do not have a large volume of procurement, or which procure only for the day-to-day running of offices, may use the e-procurement solution developed by NIC. Others may use the NIC solution, or engage any other service provider following due process.
National security	In an individual case where national security and strategic considerations demand confidentiality, the case may be exempted after seeking the approval of the concerned Secretary, and with the concurrence of the Financial Adviser.
Indian Missions abroad	In the case of tenders floated by Indian Missions abroad, the Competent Authority to decide the tender may exempt such a case from e-procurement.
GeM	These instructions do not apply to procurement made through GeM.
Global Tender Enquiry	Where a GTE is issued under Rule 161(iv), e-procurement as per Rule 160 may not be insisted upon.

Two distinct duties
Rule 159 — e-publishing. Tender enquiries, corrigenda thereon and details of bid awards are published on the GeM-CPPP.  ·  Rule 160 — e-procurement. All bids are received through e-procurement portals.

Self-test

Chapter 4 Quiz — ToR, costs & e-procurement

Seven UPSC-style questions from Chapter 4. Pick an answer to lock it; the explanation appears below.

Score 0 / 0

⚡ Chapter 4 — Quick Recap

Concept	Key Fact
ToR analogue	Description, Quantity & Technical Spec for goods (Rule 185)
ToR contents	Objectives · tasks · schedule · Ministry's inputs · final outputs
ToR describes	Activities, not methodology — that is the consultant's task
Inception Report	About 6 weeks after commencement
Progress Reports	Feasibility & design every 2 months; supervision monthly
Interim report review	Entity takes ≤ 15 days to review & approve a draft
Cost categories	(a) Fee / remuneration · (b) Reimbursable costs
Reasonable estimate	Rule 182 — from market conditions & similar organisations
Committee after award	Consultancy Monitoring Committee
ToR approval	CA approval + budget provision before procurement is initiated
Annual Procurement Plan	Before the year starts, on the website — Rule 144(x)
e-Procurement	Mandatory (Rule 160); does not apply to GeM
e-Proc exemption	National security → Secretary's approval + FA's concurrence

CH 5 · SHORTLISTING

Shortlisting Stage in Procurement of Consultancy Services

Why the process is in two stages

Since the quality of consultancy is not tangibly measurable, it is too costly to invite and evaluate proposals from everyone. Selection therefore rests on limited proposals from a short list of qualified firms. At the first stage the qualified firms are shortlisted in a transparent manner; at the second an RfP, seeking technical and financial proposals, is invited from the short list. Unreasonable qualification criteria, which restrict participation, are to be avoided.

Fig 5.1 · The funnel — from the whole market down to one consultant

The two stages answer different questions. Stage 1 asks "who is capable?" and looks only at the firm. Stage 2 asks "whose proposal is best?" and looks at approach, staff and price.

On the basis of the responses received from the interested parties, the consultants meeting the requirements are shortlisted for further consideration. The number of shortlisted consultants shall be not less than three [Rule 184], and should generally not exceed eight.
Other (non-consultancy) services are procured through a simpler, single-stage process, on the lines of goods and works.

§ 5.1

Identification of likely sources — the thresholds

Fig 5.2 · Estimated value decides the route — the ₹50 lakh line

Both limbs were raised to ₹50 lakh by the Department of Expenditure. An organisation with its own website must publish its advertised tender enquiries there as well.

Rule	Estimated value	What is to be done
Rule 183(i) consultancy	Up to ₹50 lakh	A long list of potential consultants is prepared on the basis of formal or informal enquiries from other Ministries, Departments or organisations involved in similar activities, from Chambers of Commerce & Industry, and from associations of consultancy firms.
Rule 183(ii) consultancy	Above ₹50 lakh	In addition to the long list, an enquiry seeking an Expression of Interest is published on GeM as well as on the GeM-CPPP. An organisation having its own website also publishes it there.
Rule 201(i) other services	Up to ₹50 lakh	The preliminary list of likely contractors is scrutinised, the prima facie eligible and capable contractors are decided, and a limited tender enquiry is issued to them. Their number shall be more than three.
Rule 201(ii) other services	Above ₹50 lakh	An advertisement is issued on GeM as well as on the GeM-CPPP, giving the complete web address from which the bidding documents can be downloaded.

§ 5.1

The enquiry seeking Expression of Interest

Fig 5.3 · The REoI — four questions in, three questions strictly out

The REoI also states, in brief, the broad scope of the work, the inputs the Ministry will provide, and the eligibility and pre-qualification criteria, along with the past experience expected in similar work.

The enquiry shall include	The enquiry shall not include
In brief, the broad scope of the work or service.	The Terms of Reference of the assignment. A complete ToR must be ready before the enquiry issues, but is not part of it.
The inputs to be provided by the Ministry or Department.	Any question on the consultant's approach or methodology, which belongs to the RfP stage.
The eligibility and pre-qualification criteria to be met by the consultants.	Any requirement to submit the curricula vitae of individual staff.
The consultant's past experience in similar work or service; its core business and years in business; its technical and managerial organisation; and the number of its key staff.	Anything that offends against brevity, which is stressed at this stage.

The consultants may also be asked to send their comments on the objectives and scope of the work projected in the enquiry, and adequate time should be allowed for getting responses.
Where suitable Indian consultants may not be available, the enquiry may take the Global Tender Enquiry route.

§ 5.1

Global Tender Enquiry — Rule 161, GFR

Fig 5.4 · The ₹200 crore bar, and the only gate through it

For specialised research equipment up to ₹200 crore procured by Educational and Research Institutes, the Secretary of the Ministry is the competent authority, subject to non-availability certificates and use of the I-STEM portal.

The bar. No Global Tender Enquiry shall be invited for tenders up to ₹200 crore, or such limit as may be prescribed by the Department of Expenditure from time to time.
The exception. For tenders below that limit, in exceptional cases where the Ministry feels there are special reasons for a GTE, it shall record its detailed justification and seek prior approval for relaxation from the competent authority specified by the Department of Expenditure.
Who may propose. The proposal is submitted by the Administrative Ministry, with the concurrence of the Financial Adviser and the approval of the Secretary. Proposals from individual offices, autonomous bodies or CPSUs are not entertained.
Before the enquiry. A domestic open tender is first floated to identify domestic providers, and the three or five-year procurement plan under the Make in India Order is published.
Once permitted. Copies of the tender notice may be sent to the Indian Embassies abroad and to the Foreign Embassies in India, the selection depending on the possibility of availability of the required goods in such countries. In such cases e-procurement as per Rule 160 may not be insisted.
Research equipment. For specialised research equipment up to ₹200 crore procured by Educational and Research Institutes, the Secretary of the Ministry is the competent authority, subject to non-availability certificates and the use of the I-STEM portal.

§ 5.1

The long list & the panel of consultants

The long list is moderated down to the firms that are prima facie eligible, and their number shall be not less than three. Where fewer are available, the procurement proceeds with fewer only with the approval of the competent authority.
An Entity procuring consultancy frequently may maintain a panel of qualified consultants, on the lines of the registration of suppliers under Rule 150.
A formal Expression of Interest may be advertised even at or below the threshold, with the approval of the competent authority, where the complexity of the assignment justifies it.
The performance of the empanelled firms is reviewed periodically; the list is updated, and members are upgraded, downgraded or de-listed.

§ 5.2

The short list & the qualification weightages

Fig 5.5 · How a firm earns its place on the short list

Scoring is not merely a device for disqualification. It establishes the relative strengths of the applicants, and so produces a robust short list.

Qualification criterion	Weightage
Past experience and track record of the consultant	60%
General profile of the qualification, experience and number of key staff, and not the curricula vitae of individuals	25%
Overall financial strength — turnover, profitability and cash flow	15%

All consultants securing the minimum required marks, normally 75%, and specified in the Expression of Interest, are shortlisted. A simplified fail/pass benchmark may be used instead — for example, at least two similar projects; key staff with at least seven years' experience and a Master's degree; and a turnover of at least ₹10 crore.
Scoring is not merely for disqualification, but to establish the relative strengths of the applicants and to arrive at a robust short list.
Where a firm is considered for concurrent assignments, the Entity assesses its overall capacity before placing it on more than one short list, and declares this in advance in the Expression of Interest.

Minimum qualifying turnover
Keeping the minimum qualifying turnover at five to ten times the estimated cost of the consultancy appears prima facie high, since it reduces competition. The criteria should be reasonable, and such a high turnover retained only if adequately justified.

§ 5.3

Shortlisting — risks & mitigation

Risk	Mitigation
Conflict-of-interest situations are not reported or declared, whether by the consultants or by the members of the evaluation committee.	Signed declarations in the specified formats — from the consultant at the Expression of Interest stage, again in the technical proposal, and from every member of the Consultancy Evaluation Committee before evaluation begins.
Qualifications leasing — a weak local bidder shows an association with a well-qualified foreign or local firm merely to borrow its credentials, and that partner contributes little at execution.	From the Expression of Interest stage, clearly identify the qualified applicant, and place the partner's guaranteed contribution on record and in the contract.

Self-test

Chapter 5 Quiz — EoI, thresholds & the short list

Seven UPSC-style questions from Chapter 5. Pick an answer to lock it; the explanation appears below.

Score 0 / 0

⚡ Chapter 5 — Quick Recap

Concept	Key Fact
Advertised EoI threshold	Consultancy above ₹50 lakh → EoI published on GeM & GeM-CPPP (Rule 183)
Up to ₹50 lakh	No published EoI — a long list from formal/informal enquiries
Other services (Rule 201)	Above ₹50 lakh advertised; up to ₹50 lakh limited tender to more than 3
Short list size	Minimum 3 (Rule 184), generally not more than 8
Long list minimum	Not less than 3; fewer only with CA approval
REoI does NOT include	The ToR, the approach or methodology, or individual CVs
GTE bar	No GTE up to ₹200 crore without prior approval of the CA specified by DoE
GTE approval route	Administrative Ministry + FA's concurrence + Secretary's approval
Qualification weights	Experience 60% · key-staff profile 25% · financial strength 15%
Shortlist cut-off	Normally 75% of the marks, stated in the EoI
Turnover caution	5–10× the estimated cost is prima facie high — keep it reasonable
Qualifications leasing	Record the partner's guaranteed contribution in the contract

CH 6 · COMPETITIVE SELECTION

Selection of Consultants by Competitive Process

The evaluation process

Nine steps run from the issue of the Request for Proposals to the award of the contract. Proposals are ordinarily asked for in the two-bid system, with the technical and financial bids sealed separately [Rule 187], and the financial bids of only those bidders declared technically qualified are opened [Rule 190].

Fig 6.1 · The nine steps of the competitive process

The bidder puts the two sealed envelopes in a bigger envelope, duly sealed, and submits it by the specified date and time at the specified place [Rule 187].

§ 6.2

Request for Proposals — Rule 186, GFR

A letter of invitation.
Information to Consultants regarding the procedure for submission of the proposal.
The Terms of Reference.
The eligibility and pre-qualification criteria, in case these have not been ascertained through the enquiry for Expression of Interest.
The list of key positions whose curriculum vitae and experience would be evaluated.
The bid evaluation criteria and the selection procedure.
Standard formats for the technical and financial proposal.
The proposed contract terms.
The procedure proposed for the mid-term review of progress, and for review of the final draft report.

Simplified Technical Proposal

Where LCS is used

Since technical scores are not weighted and added in LCS, a fail-pass benchmark suffices and a Simplified Technical Proposal, rather than a Full Technical Proposal, is called for. It is used where the assignment is unlikely to have a downstream impact, is routine with a well-defined ToR, and needs no detailed evaluation of experience — auditors, accountants, consulting engineers.

Instructions to Consultants

Standard part + data sheet

Brings transparency to the evaluation criteria, the weights and the minimum passing score. It shall not indicate the budget, except in Fixed Budget – based Selection, but indicates the expected input of key staff. The proposal validity is normally 60 days.

§ 6.2.6

Currency, price variation, advances & securities

Contracts are normally denominated in Indian Rupees. Where another currency is permitted, the date of conversion, normally the date of opening of the technical bid, is fixed in the RfP.
A Price Variation Clause can be provided only in long-term contracts, where the delivery period extends beyond 18 months; in short-term contracts firm and fixed prices are provided [Rule 225(viii)(a)]. For time-based and indefinite-delivery contracts expected to exceed 18 months, the adjustment is based on the Consumer Price Index. Lump-sum contracts are generally not subject to price adjustment.
The clause specifies the base level, being the month and year to which the price is linked; a minimum percentage of variation above which adjustment is admissible; a ceiling on price variation; and cut-off dates for material and labour. No price variation is admissible beyond the original scheduled delivery date for defaults on the part of the supplier.

Fig 6.2 · Advances, and the two securities

Both securities may be furnished as an Insurance Surety Bond, an Account Payee Demand Draft, a Fixed Deposit Receipt, a Bank Guarantee including an e-Bank Guarantee, or by online payment. The bid security is refunded to the successful bidder on receipt of the performance security.

Provision	Content
Bid Securing Declaration	In place of a bid security, the Ministry may require bidders to sign a declaration accepting that, if they withdraw or modify their bid during its validity, or fail to sign the contract or furnish the performance security, they will be suspended for the period specified in the request for bids [Rule 170(iii)].
Two-packet bidding	The bid securities of the unsuccessful bidders at the first stage, that is technical evaluation, are returned within 30 days of the declaration of the first-stage result.
Form of contract	The Standard Form of Contract is preferred, and the General Conditions of Contract are not to be altered; project-specific changes are made through the Special Conditions of Contract.
Professional liability	There shall be no limitation of liability for gross negligence or wilful misconduct, and the limit shall never be below a stated multiple of the contract value.
Applicable law	The bidding document indicates clearly that the resultant contract will be interpreted under Indian laws [Rule 173(vi)].
NIL quotation	If a firm quotes NIL charges or consideration, the bid shall be treated as unresponsive and will not be considered [Rule 173(i)(i)].

§ 6.3–6.4

Pre-proposal meeting & receipt of proposals

15–30 days

After issue of the RfP, the pre-proposal meeting is normally held.

≥ 15 days

Time left to bidders to respond, where a significant change is issued as a corrigendum.

4 wk – 3 mo

Time normally allowed to prepare the proposals.

≥ 8 weeks

Time allowed where there is international participation.

§ 6.5

Consultancy Evaluation Committee — Rule 189, GFR

Constitution. Technical bids are analysed and evaluated by a Consultancy Evaluation Committee constituted by the Ministry, for cases with a financial implication of more than ₹10 lakh. It has normally three members, including the Financial Adviser or a representative, and a user representative who acts as the convenor.
Independence. No member shall report directly to another member of the Committee. The Committee handles all the stages — the EoI, the short list, the ToR, the RfP, the technical and financial evaluation, negotiation and selection; no separate technical committee is needed.
Grading before opening. A grading system of three to four grades is defined before the proposals are opened, so as to prevent bias.
No contact. Members shall have no communication with the shortlisted firms, from their appointment until the award of the contract.
Record of reasons. The Committee shall record in detail the reasons for acceptance or rejection of the technical proposals evaluated by it. Differences are resolved by discussion; persistent dissent is recorded, the majority view prevails, and the competent authority may overrule with reasons recorded.

§ 6.6–6.7

Responsiveness & evaluation of the technical proposal

A proposal is summarily rejected as non-responsive if it is unaccompanied by the bid security, is unsigned, is incomplete in that the required formats are not submitted, does not fully respond to the ToR, or carries a validity shorter than that prescribed.
A technical proposal containing material financial information is also rejected.
Determination of responsiveness is based on the contents of the bid itself, without recourse to extrinsic evidence [Rule 173(xii)].
Each proposal is judged on its own merits and given an absolute grade against the predefined criteria; the maximum technical score is 100, and the minimum qualifying mark is normally 75. The technical evaluation report is confidential, and requires the approval of the competent authority.

Fig 6.3 · Technical evaluation — the criteria and the grades

The four criteria are relevant experience, methodology, qualifications of the key staff, and transfer of knowledge. Each proposal is graded on its own merit, and not by comparison with the others.

§ 6.8

Evaluation of cost — Rule 190, GFR

The financial bids of only those bidders declared technically qualified by the Consultancy Evaluation Committee are opened; the others are notified, and their financial proposals are returned unopened.
In QCBS, the financial opening is held not later than three weeks after the notification, and is conducted publicly; the names, the quality scores and the prices are read aloud.
In time-based proposals, arithmetical errors are corrected. In lump-sum proposals there is no correction, since all prices are deemed to be included.
In QCBS the lowest price is given 100, and the others score in inverse proportion to their price.
Costs quoted in a foreign currency are converted to rupees at the State Bank of India BC selling rate on the date of opening of the technical bids.
For an abnormally low bid, a written price analysis is sought, and the bid is rejected if the bidder fails to demonstrate its capability to perform. No fixed normative percentage is prescribed.

§ 6.9

Selecting the winning consultant

The evaluated bid score
B = (Clow / C) · X + (T / Thigh) · (1 − X) — where C is the evaluated price, Clow the lowest evaluated price, T the technical score, Thigh the highest technical score, and X the weight assigned to price. The highest combined score is ranked H-1. In LCS, the proposals are ranked by total cost and the lowest evaluated cost is recommended for award. A tie in the final ranking is resolved in favour of the bid with the highest technical score.

§ 6.10–6.13

Negotiations, award & risks

Negotiation with bidders after bid opening must be severely discouraged. In exceptional circumstances where price negotiation is necessary, it is resorted to only with the lowest evaluated responsive bidder [Rule 173(xiv)].
Negotiations are not essential. They freeze the ToR and the methodology in the "Description of Services", and must not substantially alter or dilute the ToR.
Financial negotiation is undertaken only where a change in scope has a financial bearing, or the quoted costs are unreasonable, and in no case shall there be an increase above the quoted price. If negotiation fails, the process is cancelled and the proposals re-invited.
The name of the successful bidder awarded the contract, and the cost, are placed on the GeM-CPPP, the Ministry's website, and its notice board [Rule 173(xviii)]. The details of the evaluation remain confidential until the award.
Rejection of all bids is justified where effective competition is lacking; where no bid is substantially responsive; where the prices are substantially higher than the updated cost estimate or the available budget; or where none of the technical proposals meets the minimum technical qualifying score [Rule 173(xix)].

Risk	Mitigation
A Joint Venture wins on the qualifications of the lead partner, but proposes no key expert or team leader from that firm.	The RfP should require the team leader to have worked two to three years with the main qualifying firm; non-compliance renders the proposal non-responsive.
A request to substitute key experts at the negotiation stage.	Examined very closely, and agreed only where the RfP permits it and the process has been unreasonably delayed.
Unsigned curricula vitae in the technical proposal.	Evaluate the proposal without the unsigned CVs, and never allow substitution at negotiation. If most of the CVs are unsigned, reject the proposal as non-responsive.

Self-test

Chapter 6 Quiz — RfP, CEC, evaluation & award

Eight UPSC-style questions from Chapter 6. Pick an answer to lock it; the explanation appears below.

Score 0 / 0

⚡ Chapter 6 — Quick Recap

Concept	Key Fact
RfP contents	Rule 186 — nine items, from the letter of invitation to the mid-term review procedure
Proposal validity	Normally 60 days; the ITC shall not indicate the budget, except in FBS
Price Variation Clause	Only where the delivery period extends beyond 18 months [Rule 225(viii)(a)]
Advance payment	30% private · 40% Govt or PSU · 6 months for maintenance [Rule 172(1)]
Bid Security	2–5% of estimated value; valid 45 days beyond bid validity; returned by the 30th day after award; MSEs and Startups exempt
Performance Security	3–5% of contract value for goods, consultancy and non-consultancy; 60 days beyond obligations; within 14 days [Rule 171]
Proposal time	4 weeks to 3 months; international participation ≥ 8 weeks
CEC	Rule 189; cases above ₹10 lakh; normally 3 members; user representative is convenor; reasons recorded in detail
Rating scale	A full · B 80% · C 60% · D 30% · E 10%
Technical criteria	Experience 5–10% · methodology 20–50% · key staff 30–60% · transfer of knowledge 0–10%
Financial opening	QCBS — publicly, not later than 3 weeks after notification
Currency conversion	SBI BC selling rate on the date of opening of the technical bids
Tie in QCBS	Resolved in favour of the highest technical score → H-1
Negotiation	Severely discouraged; only with the lowest evaluated responsive bidder; never above the quoted price

CH 7 · SPECIAL ENGAGEMENTS

Special Types of Engagements

Coverage

The method to be followed in special cases — Single Source Selection; individual consultants; specialised agencies, institutions and NGOs; procurement and inspection agents; financial advisors and auditors; and a public competition for the design of a logo or symbol.

Fig 7.1 · The engagement, and the method prescribed for it

Auditing runs under a well-defined Terms of Reference and established professional standards, which is why Rule 193 names audits as an assignment of a standard or routine nature.

Powers are severely restricted. Direct negotiation lacks the benefits of competition and transparency, and is used only in exceptional and inescapable circumstances. The reasons, and the choice of the firm, are recorded and approved by the competent authority under the DFPR or the Schedule of Procurement Powers, before single tendering.
Downstream continuity. Where a downstream assignment is contemplated, the initial RfP should outline the prospect. But where the initial assignment was not awarded competitively, or the downstream work is substantially larger, a competitive process is followed, and the initial firm is not excluded from it.
Reporting. Under the CVC guidelines, the Competent Financial Authority reports all selections made by nomination every month to the Secretary or the Head of the Department.

§ 7.2

Selection of individual consultants

Individuals are engaged where a team is not required, no outside support is needed, and the experience and qualifications of the individual are paramount.
Selection is made by a comparison of the qualifications of at least three candidates who have expressed interest, or who have been approached; the requirement is advertised on GeM and the GeM-CPPP.
The Consultancy Evaluation Committee awards marks for education and experience, may interview the candidates, and recommends the remuneration.
Direct negotiation with an individual is confined to exceptional cases — a continuation of work won competitively; an emergency arising after a natural disaster; or a single qualified individual. The conflict-of-interest provisions apply to the parent firm of a candidate who is employed.

§ 7.3–7.4

Specialised agencies, institutions & NGOs

Specialised agencies & institutions

Single Source Selection

Government and semi-Government agencies, universities and professional institutions. Where they possess special expertise or back-up facilities, Single Source Selection may be appropriate, with full justification that it is in the best interest of the Entity.

Non-Governmental Organisations

Quality and Cost Based Selection

Where an assignment requires community participation, the short list may consist entirely of NGOs, and QCBS is then used, with criteria reflecting grassroots experience, participatory approaches, committed leadership and beneficiary participation. SSS may be used to engage a local NGO for a very small assignment in a remote area where only one is available.

§ 7.5–7.6

Procurement & inspection agents

Agent	What it does & how it is paid	Method & the caution attached
Procurement Agent	Handles specific items of procurement, and is paid a percentage of the value handled. An agent giving only advice is engaged on a QCBS time-based contract.	QCBS with a cost weight of up to 50%. At that weight finance dominates the selection, so the quality threshold must be set high.
Inspection Agent	Carries out pre-shipment or on-arrival inspection for quality, quantity and price, and is paid a percentage of the value of the goods inspected.	QCBS, cost up to 50%. Clauses requiring the supplier to pay for the travel, stay and hospitality of the inspecting officials must be avoided, since they compromise the independence of the inspection.

§ 7.7–7.8

Financial advisors & auditors

For studies and financial consultancy, any suitable method may be used.
For restructuring, mergers and acquisitions, demerger and privatisation, QCBS is used, and the remuneration takes the form of a lump-sum retainer together with a success fee, preferably a percentage of the transaction value. The cost weight may exceed the standard, for instance 30%, or LCS may be used.
Auditing is carried out under a well-defined Terms of Reference and established professional standards, so auditors are selected under the Least Cost System, with cost as the selection factor.

§ 7.9

Public competition for design of symbols and logos — Rule 196, GFR

Fig 7.2 · The design competition — what Rule 196 requires

The Emblems and Names (Prevention of Improper Use) Act restricts the use of certain names and emblems, and the Official Languages Act governs the language in which the competition is conducted.

Self-test

Chapter 7 Quiz — special engagements

Seven UPSC-style questions from Chapter 7. Pick an answer to lock it; the explanation appears below.

Score 0 / 0

⚡ Chapter 7 — Quick Recap

Engagement	Method / Key Fact
Nomination reporting	The CFA reports all nominations every month to the Secretary or Head of Department (CVC)
Downstream continuity	Competitive process if the initial award was not competitive, or the downstream work is substantially larger
Individual consultant	Compare qualifications of at least 3 candidates; CEC scores and may interview
Specialised Govt agency	SSS, with full justification
NGOs	QCBS; SSS only for a very small assignment in a remote area
Procurement agents	QCBS, cost weight up to 50%; keep the quality bar high
Inspection agents	QCBS, cost up to 50%; the supplier must not fund the inspectors' travel or stay
Financial advisors	Restructuring, M&A, privatisation → QCBS; retainer plus success fee
Auditors	LCS, with cost as the selection factor
Logo competition	Rule 196; publicity on the Ministry website and the GeM-CPPP; IPR rests with the sponsoring agency

CH 8 · MONITORING

Monitoring the Consultancy / Other Services Contract

Monitoring the contract — Rule 195, GFR

The Ministry or Department should be involved throughout in the conduct of the consultancy, preferably by taking a task force approach, and should continuously monitor the performance of the consultants, so that the output of the consultancy is in line with the objectives of the Ministry.

A Contract Monitoring Committee is constituted after selection, with at least three members at the appropriate level, including the user's representative; the members of the Consultancy Evaluation Committee may be reused.
A counterpart Project Manager is designated as the nodal person for the assignment.
The Committee monitors progress, assesses the deliverables, accepts or rejects parts of the work, and levies liquidated damages or penalty. Its functions extend from the notice to proceed and the inception review, through contract variations and the monitoring of progress and expenditure, to dispute handling, termination, final payment, closure and post-contract evaluation.
All contracts shall contain a provision for recovery of liquidated damages for defaults on the part of the contractor; an exemption may be made only in exceptional circumstances, justified by the procuring entity in writing [Rule 225(xvi)].

Time-based contract

Watch the mobilisation

The mobilisation and demobilisation of the key experts is watched carefully, since the contract amount can be fully spent while the supervised work, such as construction, is barely half done, which leads to claims and disputes.

Lump-sum contract

Check before the stage payment

The quality of the draft report is checked carefully before the stage payments are released. Where extra services are needed the contract is amended promptly, and the increase should generally be not more than 10 to 15%.

§ 8.10–8.11

Contract variations & substitution of key personnel

Fig 8.1 · The thresholds that govern a change to a running contract

A variation exceeding 10% is published on the same e-procurement portal on which the original tender was published. The replacement must be equally or better qualified, the remuneration not more than for the original, and the consultant bears all the costs of substitution.

For IT projects, the change-request mechanism is provided in the RfP, and a Change Control Board of academic and industry experts is constituted, whose technical and financial decisions are final.
IT-enabled attendance systems may be used to verify that the key personnel are present as per the deployment schedule.

§ 8.13

Disputes & arbitration

Before arbitration or litigation, the parties may attempt mutual discussion, mediation and conciliation. Wherever a dispute arises, legal advice is sought before initiating action to refer it to conciliation or arbitration, or to file a suit where the contract has no arbitration clause [Rule 227].
The arbitral award is binding, and is governed by the arbitration clause of the contract.
Awards against the Government are not appealed routinely. A board or committee weighs the legal merit and the realistic chances of success before an appeal is filed, since a casual appeal causes heavy damages and interest.
Where the Ministry has challenged an arbitral award, and the amount has therefore not been paid, 75% of the arbitral award, which may include interest up to the date of the award, shall be paid against a Bank Guarantee. The guarantee is only for that 75%, and not for the interest that may become payable to the Ministry should the court subsequently order a refund [Rule 227A(i)].
The payment may be made into a designated Escrow Account, with the stipulation that the proceeds are used first for the lenders' dues, second for completion of the project, and then for completion of other projects of the same Ministry as mutually decided. Any balance may be used by the contractor with the prior approval of the lead banker and the Ministry [Rule 227A(ii)].

§ 8.14–8.16

Force majeure, termination & closure

Fig 8.2 · The clocks that run at the end of a contract

Normally no extension of the scheduled completion date is granted, except where an event constituting force majeure, as provided in the contract, has occurred; extensions are allowed through formal amendments signed by the parties [Rule 225(xv)].

Risk	Mitigation
A request to substitute key experts during implementation, citing non-availability or ill health.	Allowed only as the contract provides, in exceptional cases such as death or medical incapacity, with an equally or better qualified replacement, the utmost scrutiny, and no undue financial benefit to the contractor.
Cost over-run in time-based contracts, where delay benefits the consultant.	Include an upper limit of total payment, with the competent authority reviewing any extension once it is reached; build contract-management capacity; track progress at the 50% and 80% milestones; and scrutinise the timesheets and reimbursables.

Self-test

Chapter 8 Quiz — monitoring, variations & disputes

Seven UPSC-style questions from Chapter 8. Pick an answer to lock it; the explanation appears below.

Score 0 / 0

⚡ Chapter 8 — Quick Recap

Concept	Key Fact
Monitoring the contract	Rule 195 — task force approach; CMC and a counterpart Project Manager
Contract Monitoring Committee	At least 3 members, including the user's representative; levies liquidated damages
Lump-sum, extra services	Increase generally not more than 10–15%
Variation above 10%	Needs the CA's prior approval; published on the same e-procurement portal
Material variation	Not permitted; where unavoidable, a formal amendment signed by all parties [Rule 225(xiv)]
IT change request	Generally within ±15%; the Change Control Board's decision is final
Substitution of key staff	Ordinarily ≤ 30%; reductions of 5% / 10% / 15% by slab
Challenged arbitral award	75% paid against a Bank Guarantee into an Escrow Account [Rule 227A]
Escrow priority	First the lenders' dues, then completion of the project
Force majeure	Suspends performance; beyond 90 days either party may terminate
Termination notice	30 days
Final claim	Within 60 days of completion; no claim after 3 years of its arising
Bank Guarantees	Monthly review of those expiring after three months [Rule 226(ii)]

CH 9 · OTHER SERVICES

Procurement (Outsourcing) of Other (Non-consultancy) Services

Non-Consulting Service — Rule 197, GFR

Any subject matter of procurement which, as distinguished from consultancy services, involves physical, measurable deliverables or outcomes, where performance standards can be clearly identified and consistently applied, other than goods or works except those incidental or consequential to the service. It includes maintenance, hiring of vehicles, outsourcing of building facilities management, security, photocopier service, janitor and office errand services, drilling, aerial photography, satellite imagery and mapping.

Rule 206 — where the chapter is silent
For any circumstance not covered in Rules 198 to 205 for the procurement of non-consulting services, the procuring entity may refer to Rules 142 to 176, pertaining to the procurement of goods, and not to the procurement of consulting services.

Nature of the engagement	Handled as	Illustration
Sustained, long-term deployment of an outside agency, for one year or more, for work traditionally done in-house	OUTSOURCING	Security, horticulture, housekeeping, catering, messenger services.
Construction or repair of a civil asset	WORKS	On the lines of the procurement of works.
Repair, AMC or installation of a mechanical, electrical or ICT asset	GOODS	On the lines of the procurement of goods.
The intellectual or advisory part dominates; the physical part is incidental	CONSULTANCY	Underwater inspection of a dam, where the analysis is the crux.

§ 9.4

The Activity Schedule, the contract period & the tender enquiry

In place of a Terms of Reference, other services use an Activity Schedule, with a well-defined scope and time-frame.
The tender enquiry contains the details of the work or service to be performed; the facilities and inputs to be provided by the Ministry; the eligibility and qualification criteria to be met; and the statutory and contractual obligations to be complied with by the contractor [Rule 200].
The initial contract period is normally two years, extendable by a further one year where the service has been satisfactory.
Where a cumulative penalty of 5% of the total contract value has been levied, extension beyond the initial two years is not considered.
Where there are multiple L-1 bidders, GeM offers system-determined selection or purchaser selection; the method must be decided before the tender is issued.
Hiring of manpower through contracts is avoided, given the risk of regularisation; identity cards must identify the holder as the contractor's representative.

§ 9.5–9.6

Types of contract & the system of selection

Rule	What it provides
Rule 199	The Ministry prepares a list of likely and potential contractors from formal or informal enquiries to other Ministries and organisations in similar activities, from scrutiny of trade journals and the yellow pages, and from websites.
Rule 201(i)	Estimated value up to ₹50 lakh — a limited tender enquiry is issued to the prima facie eligible and capable contractors, whose number shall be more than three.
Rule 201(ii)	Estimated value above ₹50 lakh — an advertisement is issued on GeM as well as on the GeM-CPPP, giving the complete web address from which the bidding documents can be downloaded.
Rule 202	Late bids, received after the specified date and time, are not considered.
Rule 203	The Ministry evaluates, segregates and ranks the responsive bids, and selects the successful bidder for placement of the contract — normally on the lowest price among the technically responsive offers.
Rule 204	In an exceptional situation, a non-consulting service may be procured from a specifically chosen contractor by the Competent Authority in consultation with the Financial Adviser. The detailed justification, the circumstances, and the special interest or purpose it serves form an integral part of the proposal.
Rule 205	The Ministry should be involved throughout in the conduct of the contract, and should continuously monitor the performance of the contractor.

The contract may be lump-sum, time-based, unit or item-rate — a taxi paid per kilometre — or an indefinite-delivery contract.
The process is a simpler, single-stage one; a pre-qualification stage may be added for highly technical services such as seismic surveys and airborne data acquisition.

§ 9.7

Government e-Marketplace — Rule 149, GFR

Fig 9.1 · The three bands of direct online purchase on GeM

The credentials of suppliers on GeM are certified by the GeM SPV, and the procuring authorities certify the reasonability of the rates, which may be ascertained through the Business Analytics tools, including the Last Purchase Price on GeM.

Ministries work out their requirements on either the "OPEX" or the "CAPEX" model at the time of preparation of the Budget Estimates, and project their Annual Procurement Plan of goods and services on the GeM portal within 30 days of Budget approval.
The invitation for online e-bidding or reverse auction is available to all the existing sellers, and to other sellers registered on the portal who have offered their goods or services under the particular product or service category.

§ 9.7.7

Payment on GeM — the CRAC and the PRC

Fig 9.2 · From delivery to payment

The Provisional Receipt Certificate records only that the consignment has arrived. Payment follows the Consignee Receipt and Acceptance Certificate, which records that it has been accepted.

§ 9.18–9.19

Service Level Agreement & monitoring

Service elements

What is to be delivered

The scope of the services; their availability; the standards of performance; the responsibilities of each party; and the escalation procedure.

Management elements

How it is governed

The tracking and reporting of performance; the dispute-resolution mechanism; and the procedure for revision of the agreement.

The Service Level Agreement creates a common understanding of the services, the priorities and the responsibilities. It is specified in the bidding document and finalised before the services start.
It must be balanced towards both parties, with penalties on both sides.
Monitoring of the contract follows the provisions of the chapter on monitoring, read with Rule 205, and the service provider submits a Programme before the commencement of the services.

Self-test

Chapter 9 Quiz — other services & GeM

Eight UPSC-style questions from Chapter 9. Pick an answer to lock it; the explanation appears below.

Score 0 / 0

⚡ Chapter 9 — Quick Recap

Concept	Key Fact
Definition	Rule 197 — physical, measurable deliverables with clear performance standards
Where the chapter is silent	Rule 206 — refer to Rules 142–176 (Goods), not to consultancy
Civil vs mechanical asset	Civil → Works; mechanical, electrical or ICT → Goods
Scope document	Activity Schedule, not a ToR; tender enquiry under Rule 200
Contract period	2 years initially, extendable by 1 year if the service is satisfactory
No extension where	A cumulative penalty of 5% of the contract value has been levied
Tender mode	Rule 201 — above ₹50 lakh advertised; up to ₹50 lakh limited tender to more than 3
Selection	Rule 203 — rank the responsive bids, normally L-1; nomination under Rule 204 with the FA
GeM direct purchase	Up to ₹50,000 any seller · ₹50,000–₹10,00,000 lowest of ≥ 3 manufacturers · above ₹10,00,000 bidding or reverse auction
Automobiles	Rule 149(i) purchase permitted without any ceiling limit
Annual Procurement Plan	Projected on GeM within 30 days of Budget approval
Receipt & acceptance	PRC within 48 hrs; Deemed PRC after 96 hrs; payment on the CRAC
Installation-intensive goods	80–90% on Delivery CRAC; 10–20% on Installation CRAC
SLA	Balanced to both parties, penalties on both sides, finalised before services start