Law and regulation of egp in india
1 / 30

Law and Regulation of eGP in India - PowerPoint PPT Presentation

  • Updated On :

Law and Regulation of eGP in India. Sandeep Verma Director, Archaeology & Museums Government of Rajasthan Jaipur, Rajasthan 302 014, India. , Verdicts on Government Procurements in India. Tenders are a major source of corruption (CVC 1998)

I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
Download Presentation

PowerPoint Slideshow about 'Law and Regulation of eGP in India' - PamelaLan

An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.

- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
Law and regulation of egp in india l.jpg
Law and Regulation ofeGP in India

Sandeep Verma

Director, Archaeology & Museums

Government of Rajasthan

Jaipur, Rajasthan 302 014, India.,

Verdicts on government procurements in india l.jpg
Verdicts on Government Procurements in India

  • Tenders are a major source of corruption (CVC 1998)

  • Deviations in practice rather than absence of rules (World Bank 2003, Hoda and Bansal 2004)

Irregular practices in government procurement l.jpg
Irregular practices in Government Procurement

  • Access to Knowledge

    • Absence of notice (selective/ restrictive advertisements)

    • Lack of knowledge of tender rules and decision-making processes

    • Lack of clarity in technical specifications

    • Non-transparency in payments

  • Access to Opportunity

    • Selective sale of tender documents

    • Obstruction/ intimidation of bidders

    • selective acceptance of bids

    • Modification/ substitution of quotes and tender papers

    • Delays in processing of tenders

    • Multiple in-situ and ex-post facto interventions

Egp frameworks l.jpg
eGP Frameworks

  • “Trust” in electronic commerce versus “Correctness” in public procurement

  • Public procurement space in India versus that elsewhere

    • General level of trust

    • Enforcement of rights in civil and criminal matters

    • Multiple levels of in-situ and ex-post-facto interventions (within the executive, and from outside- the judiciary, the Lokayukta/ Ombudsman, the CVC, the CAG, the Information Commissioners)

  • Single-shot success versus Sustainability

  • One Man show versus organisational effort

Government procurement and international negotiations l.jpg
Government Procurement and International Negotiations

  • GATT 1994: government procurement of goods excluded from scope of national treatment and MFN clause; but covered by transparency obligations

  • GATS 1994: exclusion of government procurement of services from provisions of unconditional MFN and specific commitments of market access and national treatment; but as a temporary measure only

  • GPA 1981: Tokyo Round- transparency and non-discrimination provisions, India is not a signatory

  • GPA 1996: Uruguay Round/ WTO Agreement: services included, transparency, domestic challenge procedures to be established

  • Doha Round 2001: Transparency in Government Procurement is one of the four Singapore Issues, negotiations are underway

Uncitral model law egp l.jpg
UNCITRAL Model Law & eGP

  • UNCITRAL Model Law on Procurement of Goods, Construction and Services is the basis

  • In its 36th session, the Commission expressed strong support for addressing issues arising out of increasing use of electronic communications and technologies in public procurement

  • Working Group I sets out policy objectives for eGP

    • Functional equivalence of electronic and paper-based records

    • Technology neutrality

    • Mandatory/ optional use of electronic publication

    • Consent of suppliers

    • Use of reverse auctions

Government procurements the legal scenario in india l.jpg
Government Procurements: the legal scenario in India

  • Access to Information

    • Right to Information Act

    • Procurement Rules/ Acts

    • CVC Guidelines

  • Access to Opportunity

    • Procurement Rules/ Acts

    • Competition Act

    • CVC Guidelines

  • Electronic Environment

    • Information Technology Act

Legal foundations of egp in india l.jpg
Legal foundations of eGP in India

  • No Act/ set(s) of rules deals with eGP: one needs to read local procurement acts/ rules together with the IT Act and attempt inferences on electronic procurement mechanisms and electronic publication

  • Negotiations and counter-offers are strictly restricted if not prohibited, price-bid disclosure is similarly prohibited

  • CVC guidelines offer a minimalist framework

    • E-procurement/ reverse auctions are permitted provided they are conducted in a fair and transparent manner

    • Switchover from manual paper-based tendering systems to e-procurement/ e-sale allowed wherever practical and feasible

A legal autopsy of an electronic reverse auction l.jpg
A legal autopsy of anelectronic Reverse Auction

A “reverse auction” is a dynamic procurement system based on negotiatedmultiplecounter-offers, with real-timeprice-disclosure to all bidders while keeping their identities secure


It is nothing like the traditional simultaneous, sealed-bid, first-price auction!

Egp mechanisms l.jpg
eGP Mechanisms

  • Electronic Tendering

    • Electronic Disclosure of tender opportunities

    • Automated/ Assisted Registration & Distribution of documents

    • Electronic Bid Submission

    • Electronic Contract Management

  • Electronic Reverse Auctions

    • Electronic Purchases

    • Electronic Auctions

    • Supply Chain Integration and Automation

  • Electronic Vickrey/ second-price auctions

  • Rate Contracts and Framework Agreements

Egp reverse auctions l.jpg
eGP: Reverse Auctions

  • Position of Negotiated Procurements and Multiple Bidding under

    • Local Procurement Acts and Rules

    • CVC Guidelines

  • Position regarding Price- disclosure requirements (through the Buyer to other bidders) vis-à-vis

    • Local Procurement Acts, Rules and Guidelines

    • RTI Act, IT Act

    • Preferences for SSIs and other socioeconomic entities

    • Consent implied by Participation; voluntary consent

Egp reverse auctions12 l.jpg
eGP: Reverse Auctions

  • Reverse Auctions for what commodities?

    • Clear technical specifications and buyer’s capacity to enforce compliance [Standardised, commercial, “off-the-shelf” products]

    • Only for fungible products? For services?

    • Role of non-price factors

    • Adequate market intelligence

    • Safety concerns

Egp reverse auctions13 l.jpg
eGP: Reverse Auctions

  • Reverse Auctions for what quantities? For what class(es) of bidders?

    • Bulk buying for individual user

    • Agglomerated small buying for multiple users

    • Buying from established and responsible buyers

    • Economies of scale versus socioeconomic preferences

    • Economies of scale versus monopolistic/ oligopolistic sellers

    • Possibility of collusion

    • Real-time bid-price disclosure: price preferences and instant award

Egp reverse auctions14 l.jpg
eGP: Reverse Auctions

  • Reverse Auctions as an interim stage after technical evaluation, or as the full procurement decision?

    • Pre-screening and maintenance of suppliers’ lists

    • Rank Bidding, Transformational Bidding and “True Best Value” Bidding

Egp reverse auctions15 l.jpg
eGP: Reverse Auctions

  • Bid time-frames

    • Hard Closure and Extensions

    • Flexibility in decision-making by bidders

  • “Auction Fever” or the “Winner’s Curse”

    • Impact on long-term relationships between buyers and sellers

    • Impact on R&D for products

    • “fair and reasonable” price bands, possibility of Vickrey auctions

    • Quantity-based auctions

    • Is under-bidding a real problem?

  • “Instant Award” versus “Post-auction analysis”

Electronic government procurement in india l.jpg

Electronic Government Procurement in India

An analysis of eGP projects from an access viewpoint

Access to knowledge of tender opportunities l.jpg
Access to knowledge of tender opportunities

  • Large number of websites, but very little integration and standards-based organisation of information

  • Infrequent updation and reliability of accurate, up-to-date information

  • Unprotected sites: digital verification and authentication of downloads not possible

  • Absence of automatic notification by email

Access to knowledge of bidding rules l.jpg
Access to knowledge of bidding rules

  • Strong technical and financial bid evaluation both in paper-based as well as electronic mechanisms

  • E-reverse auctions: lack of sufficient information on bid parameters like start time and duration, rules on extension of time, bid increments, critical number of minimum bidders, and even delays in announcement of bidding rules

Trust in system integrity and bid challenge procedures l.jpg
Trust in system integrity and bid challenge procedures

  • Low levels of public trust in general: few “good” bidders participate, “markups” generally made by vendors

  • ASP-centered approach effectively disables third-party audit

    • Drop in connectivity

    • Number of modifications by winning bidder

  • Absence of clear bid challenge procedures even on the electronic platform

Access to ict digital security infrastructure l.jpg
Access to ICT & digital security infrastructure

  • 3.6% of the population is internet users in 2005, 50% of them in top 8 metros (NRS estimates are even lower)

  • One in five persons reads a newspaper, while one in thirty uses the internet

  • Cost of access to ICT not lower than access to newspapers

  • Poor line and power quality even in capital cities

  • Compounds problems associated with poor organisation of electronic information, and with electronic reverse auctions

Electronic auctions and law of privacy data protection l.jpg
Electronic auctions and law of privacy/ data protection

  • Legal status of protection of sensitive commercial information and intellectual property

  • Whether mere participation equals consent to waiver of rights on IP

  • While IT acts lists criminal and civil penalties, most Govt-ASP agreements do not delineate liabilities, bidders indemnify the ASP as a pre-requisite to participation

  • RTI Act: allows public disclosure of commercial information

Agglomeration of quantity l.jpg
Agglomeration of quantity

  • No law/ rules/ guidelines exist

  • Left to discretion of purchasing agencies

  • Impacts on competition

    • Limiting number of players

    • Favour large players at the cost of SSIs and SMEs

Technology competition l.jpg
Technology & Competition

  • Almost all eGP projects employ “mono”-methods

  • Access to technology and ICT is restricted by costs, quality and regions: thus affecting economic competition

  • MDB guidelines

    • Electronic participation should not be mandatory but must include paper-based options

    • Electronic publication must be promoted but not solely mandated

    • No additional financial burden on bidders because of use of technology platforms

  • Competition Law in India

    • Ban on limiting supply, markets or provisions of services

    • Prohibition of “tie-in” arrangements

    • Ban on “refusal-to-deal” by restricting classes of persons

    • Prohibition on practices that result in denial of market access

Egp issues l.jpg
eGP Issues

  • Agglomeration of Quantity and its relationship with

    • economies of scale

    • Market structure

    • SSI preferences and capacities

  • GoI/ State Government/ PSU/ CVC/ MDB/ UNCITRAL Guidelines on

    • Optional/ Mandatory eGP

    • User-charges for participation in eGP

    • Mandatory/ Optional publication of Tender Notices and Awards

Egp issues26 l.jpg
eGP Issues

  • Technology as Barrier to Entry

    • Technology neutrality

    • Choice of software platform

    • Cost and availability of technology

    • Regional dispersion of technology and capacity

  • Limitations of Technology

    • Verifiability after certificate revocation and expiry (validity period)

    • Re-verification

    • Digital Storage and retrieval

    • Notararisation

Egp issues27 l.jpg
eGP Issues

  • Issues in Bid Challenge Procedures

    • Connectivity failures

    • Handling mistakes

    • Disclosure of identity

    • Non-disclosure of own relative position

    • Deliberate and malicious attacks

    • System Recovery and Pause of bidding

  • Dispute Resolution Fora

    • Does “Outsourcing of Services” equal “Outsourcing of Grievance Redressal”

    • Liability of Government functionaries vis-à-vis computers and visa-a-vis Service Provider

    • Multiple levels of in-situ and ex-post-facto interventions

    • Civil and criminal adjudication authorities under the IT Act 2000

Egp issues28 l.jpg
eGP Issues

  • eGP as a subset of overall contract reform

    • Electronic Payments

    • ERP/ SCM systems

  • Develop Book-keeping, Accounting and Audit capabilities

  • Use and Maintenance of suppliers’ lists

  • Taxation of eCommerce

References l.jpg

American Management Systems (2001), ‘The Case for Federal eProcurement’ [online]

Bhatnagar, S. (2003a), ‘The Economic and Social Impact of E-government’ [online]

Bhatnagar, S. (2003b), ‘E-government and access to information’, Global Corruption Report 2003, Hodess, Inowlocki and Wolfe (Eds.), Profile Books Ltd, London, 2003, 24-32

Central Vigilance Commission (1998), ‘Improving Vigilance Administration’, Orders No. 8(1)(h)/98(1) dated November 18, 1998 [online]

Chandrasekhar, C.P. (2003), ‘Can Connectivity help the Poor?’, Frontline, Vol. No. 20 Issue No. 2, 2003 [online]

The Hindu Business Line (2004), ‘SAIL, Tata Steel ties strained over Metaljunction portal’ [online]

Hoda, A. and Bansal, S. (2004), ‘Transparency in Public Procurement’, Working Paper No. 129, Indian Council for Research on International Economic Relations [online]

Indian Railways (2006), ‘Instructions for Suppliers/ Contractors/ Vendors for participation in Electronic Tenders’ [online]

Inter-American Development Bank (2005), ‘e-Reverse Auction Guidelines for MDB Financed Procurement’ [online]

Metaljunction (2004), ‘On Behalf of Steel Authority of India Limited’ [online]

Metaljunction (2005), ‘Invitation to Online Forward Auction’ [online]

Seifert, J. W. and Bonham, G. M. (2003), ‘The Transformative Potential of E-Government in Transitional Democracies’ [online]

Stein, A. and Hawking, P. (2002), ‘Reverse Auction E-Procurement: A Supplier’s Viewpoint’ [online]

Turley, S. L. (2002), ‘Wielding the Virtual Gravel-DoD moves forward with reverse auctions’, Military Law Review, Vol. 173, September 2002, pp. 1-67 [online]

UNCITRAL (2004), ‘Recent developments in the area of public procurement- issues arising from the increased use of electronic communications in public procurement’ [online]

Verma, S. (2004), ‘Electronic Government Procurement: A legal perspective on the Indian situation’, Journal of Electronic Government, Vol. 1 No. 3, 2004, pp.328-334

Verma, S. (2006), ‘E-Buying: The Works’, The Economic Times, February 2, 2006 [online]

Wallace, D. Jr., Yukins, C. R., Matechak, J. P. (2005), ‘UNCITRAL Model Law: Reforming Electronic Procurement, Reverse Auctions, and Framework Contracts’, The Procurement Lawyer, Vol. 40 No. 2, 2005 [online]

The World Bank (2001), ‘Electronic Government Procurement: Concepts and Country Experiences’ [online]$FILE/ATTUQ5LL/egpdiscpaperdraft16.pdf

The World Bank (2002), ‘Electronic Government Procurement: A legal perspective on Country Practices’ [online]$FILE/Legal%20Summary%2003-19-02web.pdf

The World Bank (2003), ‘Country Procurement Assessment Report (India)’ [online]


Slide30 l.jpg

  • Thank You eProcurement’ [online]