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Finance Ministry defines ‘Abnormally Low Bid’ in public procurement
వార్తల్లో ఎందుకు?
Why a bid 30% below cost can lose: the 'Abnormally Low Bid' rule in public procurement, GS2/GS3
Bids over 30% below estimated cost need detailed justification or face rejection.
Why it matters: factual, Prelims-type
What you need to know
2 నిమి
The Finance Ministry has defined an ‘Abnormally Low Bid’ for government contracts.
A bid more than 30 per cent below the estimated cost will need a detailed rationale from the bidder, and an unsatisfactory explanation may lead to rejection of the bid.
The aim is to protect quality of execution and prevent contractors from quoting unsustainable prices to win works.
మూలాలు: Topper IAS editorial (PIB / The Hindu / Indian Express)
ముఖ్య వాస్తవాలు
Remember these
- The Finance Ministry has defined an 'Abnormally Low Bid' for government contracts.
- A bid more than 30 per cent below the estimated cost needs a detailed rationale from the bidder.
- An unsatisfactory explanation may lead to rejection of the bid.
- The aim is to protect quality of execution and stop unsustainable price quoting to win works.
- Public procurement rules are guided by the General Financial Rules (GFR).
ప్రిలిమ్స్ · మెయిన్స్
How the exam will ask it
ప్రిలిమ్స్
- The Finance Ministry has defined an 'Abnormally Low Bid' in government contracts as one quoted more than 30 per cent below the estimated cost.
- A bidder quoting an abnormally low price must give a detailed justification, failing which the bid may be rejected.
- The measure seeks to ensure quality of execution and discourage unsustainably low quotes made only to win works.
మెయిన్స్
GS2/GS3 (Governance, Economy): Unrealistically low bids lead to poor quality, delays, cost overruns and abandoned works. The Finance Ministry's definition, with a 30 per cent threshold and a duty to justify the price, gives procuring entities a clear basis to scrutinise or reject such bids. The way forward is transparent estimation, consistent application, safeguards against arbitrary rejection, and performance security with monitoring.
Quick recall
Answer before you reveal
Under the Finance Ministry’s definition for government contracts, a bid must be justified with a detailed rationale as an ‘Abnormally Low Bid’ when it is more than what percentage below the estimated cost?
- 10 per cent
- 20 per cent
- 30 per cent
- 40 per cent
సమాధానం చూడండి
సమాధానం: C — Correct: 30 per cent — bids more than 30 per cent below the estimated cost require a detailed rationale and may be rejected if it is unsatisfactory. • 10 per cent — wrong: 10 per cent is too low a threshold; the rule applies beyond 30 per cent below the estimate. • 20 per cent — wrong: 20 per cent is not the cut-off; the defined threshold is 30 per cent. • 40 per cent — wrong: 40 per cent overshoots the threshold; the rule starts at 30 per cent.
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