Colonel Parikshit Mehra from Govt. of Telangana shares views on L1 Bidding System

The shortcomings of the L1 system can be addressed only by ensuring robust pre-qualification, clear tender specifications, and strong supervision, so that lowest cost never comes at the expense of quality and accountability.

Colonel Parikshit Mehra
SM, Secretary - Tunnels & Safety
Govt. of Telangana

Challenge in Public Procurement

Procurement procedures are one of the most complex aspects of infrastructure development, particularly when public funding is involved. Here, establishing accountability is as important as delivering the infrastructure itself. The system of awarding contracts to the lowest bidder, or L1, is often criticized in industry forums. Yet in public procurement, it is difficult to justify awarding work to L2 or L3 when another bidder is willing to execute the same project at a lower cost. Pragmatically, this limitation cannot be overlooked.

Strengthening the Process

To address the shortcomings of the L1 system, the first step is to establish robust pre-qualification criteria. Only capable and serious bidders should qualify for the financial stage, with others eliminated at the technical evaluation stage. Pre-qualification should be made restrictive only when unique or highly specialized projects are being executed.

Secondly, if the price quoted by L1 is significantly lower than the expected or benchmarked cost, the bidder must provide a justification. If the explanation is unsatisfactory, the tender should be re-invited rather than risk poor execution.

Most importantly, contracts must be backed by clear tender specifications, quantified key deliverables, and a strong supervision and quality assurance mechanism. This ensures that bidders know exactly what is expected of them and that payment is tied to measurable outcomes.

With these measures in place, projects can be delivered on time, at reasonable costs, and with assured quality, making the procurement system more reliable without compromising accountability.