Public procurement, the process by which government entities acquire goods, works, and services using public funds, is fundamentally guided by principles aimed at ensuring the responsible and accountable use of public money. Among the most critical of these guiding tenets are Transparency and Professionalism. These principles, laid down in documents such as the General Financial Rules (GFR), 2017, and detailed in manuals like the Manual for Procurement of Goods, Second Edition, 2024, are essential for achieving the core objectives of efficiency, economy, and accountability in the public procurement system.
Fundamental Principles: Transparency and Professionalism
The Manual for Procurement of Goods, 2024, organises the obligations of procuring authorities into five fundamental principles, two of which are the Transparency Principle and the Professionalism Principle. These principles must be adhered to by all authorities delegated with financial powers for public buying, and they are accountable for upholding them.
The Transparency Principle
The Transparency Principle requires procuring authorities to ensure transparency, fairness, equality, competition, and the right to appeal in the procurement process. This involves the simultaneous, symmetric, and unrestricted dissemination of information to all potential bidders, providing them with sufficient details to understand bidding opportunities, processes, timelines for registration, bidding, evaluation, grievance redressal, award, and contract management.
Key aspects of the Transparency Principle include:
- Consistency and Predictability: Procuring officers must act consistently, without subjectivity, and the process should be predictable, without arbitrariness.
- Clarity and Openness: Information and procedures must be clear and open, avoiding secretiveness.
- Equal Opportunities: All bidders must have equal opportunities, ensuring non-discrimination.
- Adherence to Declared Procedures: Procuring authorities are enjoined to act only as declared in the relevant published documents and refrain from actions not previously declared.
A crucial part of implementing the Transparency Principle is the mandatory publication of relevant information on designated platforms. Ministries, Departments, Central Public Sector Enterprises (CPSEs), and Autonomous and Statutory Bodies are required to publish all their tender enquiries, corrigenda, and details of bid awards on the Central Public Procurement Portal (CPPP). The Government e-Marketplace (GeM) is also a mandatory platform for publication and procurement. This e-publishing requirement is mandatory for tenders valued above a certain threshold (e.g., Rupees two lakh for e-procurement). While mandatory, exceptions exist, such as cases requiring confidentiality for national security, which need approval from the Secretary of the Ministry. Mandatory publication of tender inquiries and award details on CPPP and GeM ensures openness and accessibility for potential bidders and the public.
Transparency is also inherent in specific procedures within the procurement cycle:
- Bid Invitation: Offers should be invited following a fair, transparent, and reasonable procedure. Wide publicity is ensured in modes like Open Tender Enquiry (OTE) by publishing notices on designated websites to attract the widest possible competition. Even in Limited Tender Enquiry (LTE), mandatory publication on GeM and CPPP is required, along with departmental websites.
- Bid Evaluation: Bids must be evaluated transparently and strictly according to the tender document’s terms and conditions. While technical and financial bids are evaluated, access to the full technical and financial bids of competitors by other bidders or the public may be restricted depending on the sensitivity of the information to protect techno-commercial and operational trade secrets.
- Award of Contract: Details of bid awards, including the vendor’s name, goods/services procured, rate, and total amount, should be disclosed. This information must be published on CPPP/GeM and the concerned Ministry/Department’s website/notice board. Exceptions for publishing award details can be sought for commercial or security sensitivity, requiring the Secretary’s sanction with Finance concurrence, especially for commercial organisations like CPSEs.
- Record Keeping: Procuring entities must maintain systematic and safe records of all procurement documents. This is essential for accountability and post-audit by internal audit, statutory audit, and vigilance agencies. Decisions at each stage, from need assessment to fulfilment, must be recorded with reasoning.
- Tender Documents: The tender document itself is a fundamental tool for transparency. It must be clear, self-contained, comprehensive, and free of ambiguity to prevent misinterpretation and disputes. Model Tender Documents are available to help ensure this. Tender documents should preferably be available for download freely or at a minimal cost. Amendments to tender documents must be uploaded on e-publishing portals and the procuring entity’s website, and communicated to those who have purchased documents.
- Specifications: The description of procurement subject matter should be objective, functional, generic, and measurable, specifying technical, qualitative, and performance characteristics. Specifications in terms of quality, type, and quantity must be clearly defined. Avoiding specific trademarks, trade names, or brands promotes competition and fairness. Prescribing Indian technical specifications and quality certifications is preferred.
- Supplier Registration: Registration of suppliers should follow a fair, transparent, and reasonable procedure with due publicity. Procedures and criteria should be clearly indicated.
Transparency is also enhanced through mechanisms like Pre-bid Conferences, where potential bidders can seek clarification on tender documents. Minutes of these conferences and any resulting amendments must be published.
The Professionalism Principle
The Professionalism Principle holds procuring authorities responsible and accountable for ensuring professionalism, economy, efficiency, effectiveness, and integrity in the procurement process. This principle underscores the need for competent conduct throughout the procurement cycle.
Key aspects of the Professionalism Principle include:
- Economy, Efficiency, and Effectiveness: Procuring authorities must strive for economy, efficiency, and effectiveness in using public funds. The methodology chosen for procurement should be reasonable and appropriate for the cost and complexity, effectively achieving the procurement’s objective.
- Integrity: Maintaining integrity is paramount. Officials must avoid wasteful, dilatory, and improper practices.
- Adherence to the Code of Integrity for Public Procurement (CIPP): This Code outlines expected ethical conduct. It addresses issues like conflict of interest, defining it as any personal, financial, or business relationship between a bidder and procuring entity personnel involved in the process that could affect decision-making. Proactive disclosure of potential conflicts of interest is required in tender documents. Officials should avoid non-official pecuniary transactions with contractors or suppliers with whom they have official dealings. Breaching the CIPP is a serious misdemeanour that can lead to debarment.
- Professional Standards and Training: The government may prescribe professional standards and specify suitable training and certification requirements for officials involved in procurement.
- Due Diligence: Procuring authorities must exercise due diligence throughout the process. This includes diligent market inquiry even for small value procurements and ensuring sufficient publicity and time for bids in advertised tenders. In Limited Tender Enquiry, bidders are selected with due diligence to ensure they meet eligibility criteria.
- Timely Processing: Efficiency requires timely finalisation of the tender process. A schedule should be published in tender documents, and officials are accountable for acting within this schedule to avoid delays, cost overruns, and lost benefits.
- Risk Mitigation: Professionalism involves identifying potential risks, such as insufficient publicity or restrictive criteria in OTE, and implementing mitigation strategies like ensuring searchable NITs, direct intimation to registered vendors, and allowing adequate time for bid submission.
- Bid Evaluation: The procuring authority must professionally satisfy itself that the selected offer adequately meets the requirement and that the price is reasonable and consistent with the quality required. Comparative statements of bids should be prepared and, for procurements exceeding a certain value, vetted by associated/integrated Finance.
- Contract Management: Professionalism extends to managing the contract, including timely payments, providing statutory certificates for tax deductions, and ensuring timely return of performance securities. Adhering to contract terms and schedules is crucial.
- Debarment Procedures: In cases of supplier misdemeanours, a formal process involving a show-cause notice detailing the articles of misdemeanour and giving the firm a reasonable opportunity to represent its case is followed before debarment is proposed.
- Legal Awareness: While not expected to be legal experts, public procurement professionals should have a working knowledge of basic applicable laws, including the Indian Contract Act, Sale of Goods Act, RTI Act, and laws related to vigilance and anti-corruption. Complex legal issues warrant consultation with legal professionals.
Interrelation and Support from Other Principles
Transparency and Professionalism are reinforced by other principles and aspects of the public procurement framework:
- Efficiency, Economy, and Accountability: These are stated objectives linked directly to the responsibility of procuring authorities, alongside transparency, fairness, and competition. Transparency enables accountability by allowing scrutiny of decisions and processes. Professionalism drives efficiency and economy by ensuring sound practices and effective methodology.
- Fair and Equitable Treatment of Suppliers: This principle is intertwined with transparency and professionalism, ensuring all suppliers are treated equally without discrimination, supported by clear procedures and criteria.
- Promotion of Competition: Transparency, through wide publicity and clear specifications, and professionalism, through fair procedures, are essential for promoting wide competition. Procedures should avoid limiting competition. Cartel formation is recognised as an abuse of transparency and a violation of the CIPP and Competition Act.
- Standards of Financial Propriety: Officers must adhere to high standards of financial propriety, exercising the same care with public money as a prudent person would with their own, avoiding excessive expenditure or personal gain. This aligns with the professionalism principle’s emphasis on integrity and economy.
- Broader Obligations: While primarily focused on transparency and professionalism in the process itself, public procurement also aims to achieve broader government objectives like ‘Make in India’ and support for MSEs. These policies are integrated into the procurement guidelines. Transparency ensures that these preferences are applied according to the rules, and professionalism ensures they are implemented fairly and effectively while balancing other procurement objectives.
- Extended Legal Responsibilities: Public procurement operates within a broad legal framework, including the Constitution (Fundamental Rights to equality and trade), RTI Act, and anti-corruption laws. These legal obligations underscore the need for transparent and ethical conduct, and decisions are subject to judicial review based on principles of fairness and legality.
Conclusion
Transparency and Professionalism are foundational pillars of effective and ethical public procurement. The Transparency Principle ensures that the process is open, accessible, and fair, enabling competition and accountability through clear rules, public dissemination of information, and the use of e-procurement platforms. The Professionalism Principle demands that procurement activities are conducted with competence, integrity, efficiency, and adherence to established procedures and codes of conduct, including the Code of Integrity for Public Procurement. Together with other principles like economy, competition, financial propriety, and accountability, they create a framework designed to ensure that public funds are used efficiently, economically, and effectively while upholding public trust and supporting broader national objectives. The documented procedures, mandatory use of portals, and emphasis on record-keeping and timely processing outlined in the sources all contribute to embedding these principles in the daily practice of public procurement.