Govt bidding adieu to L1 tendering norm

In order to do away with flaws and moral hazard attached to proposal of the 'lowest bidder' (L1) tendering norm, Niti Aayog will prepare a draft proposal to suggest alternatives to the current norm to overcome deficiencies in the process which doesn't give sufficient weightage to quality parameters. In the current system, which is called Least Cost Selection Method, the bidder quoting the lowest price wins the contract. Addressing an event “Goodbye L1”organised by Consulting Engineers Association of India, Niti Aayog vice chairman Rajeev Kumar said everyone knows about the deficiencies in the L1 norm and by following this tendering model, government agencies have become helpless. He referred to a concept paper by the Central Vigilance Commission stressing the need to revisit current norms and why an all-inclusive public procurement strategy is required, in sync with a fast changing global scenario in the infrastructure sector. It was suggested that the conventional L1 method is not suited for major infrastructure projects. Union minister Nitin Gadkari said, “The spirit behind the theme 'Goodbye L1' is good; the strategy may not be right. If L1 doesn't get a contract, people feel that the minister or bureaucrats must have made good money. So, there are risks of getting blamed even if intention is good.” As a matter of fact, the L1 bidding norm not only impacts infrastructure projects but other government works as well. The current tendering system affects research laboratories and defence bodies as they find it difficult to get the right quality product because the tenders go to the lowest bidder because of L1 bidding practice and the country has not been able to create globally competitive infrastructure firms, barring a few, he added.