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[Polity] Public Procurement Bill 2012: Meaning,Salient Features, explained

Posted By Mrunal On 21/09/2012 @ 7:49 pm In polity | 26 Comments

Topic particularly important for UPSC Mains examination- PublicAdministration Paper I ->5th Topic : Accountability and control.

1. What is Public Procurement?2. What is the problem in Public Procurement system?3. Where does the bill apply?4. Where does the bill not apply?5. Salient Features / Provisions of the bill?6. Punishment

What is Public Procurement?

public procurement means how the public authorities– the Centraland State governments, ministries/departments, public sectorundertakings or state-owned enterprises—spend public money buyinggoods and services.For example, a department purchasing vehicles, office equipment,computers, stationary, air-conditioners, refrigerators, buildings, etc.

Public Procurement: Problem areas?

India’s public procurement systems account for more than Rs. 10lakh crore of business. This is ~30% of India’s GDPLot of Corruption during the tender/bidding process.There are imperceptible pressures from trading partners such as theEU that foreign companies should be allowed to easily participate inIndia’s public procurement process.At present there is no single legislation providing guidelines for publicprocurement and for giving punishments to bribe givers and bribetakers.So Finance ministry introduced Public Procurement Bill, 2012 in LokSabha.It is based on the recommendations of Committee on PublicProcurement, headed by former bureaucrat Vinod Dhall.This Bill seeks to make public procurement transparent andcorruption-free.

Where does the bill apply?

Any central department, ministry, PSU or Company whereGovernment has more than 50% stakes.For purchases about 50 lakh rupees.

Where does the bill not apply?

For emergency purchases done during disaster Management,national security.

Salient Features / Provisions of the bill?

Procuring entity (Ministry/department etc) shall first determine theneed for the procurement and estimate the cost of the procurementbased on certain specified matters. It may publish informationregarding planned procurements.Bill provides for setting up a Central Public Procurement Portal.This website will ensure transparency in the procurement process. Information such as pre-qualification document and details of biddersshall be displayed on the Portal.Ministry/Department shall not limit discriminate against bidder,except for the protection of public order and morality, animal or plant

life, intellectual, national security. (means foreign companies can alsofill up tenders without trouble- that’s what EU and USA wanted.)central government may make procurement mandatory from certainbidders for promotion of domestic industry, socio economic policy, orother considerations in public interest. (means Government can preventforeign companies from bidding, in special cases)Government shall constitute one or more independent procurementredressal committees [under the chairmanship of a retired High CourtJudge]. if any prospective bidder (seller) feels that a particularministry/department etc. did not consider his product/services forany foul reasons (e.g. if he feels that since he did not give bribe so histender was rejected) -so in that case he may file an application withsuch a committee.

Punishment

Bill providse different penalties for offences such as taking bribes inrespect of procurement, interference with the process, makingvexation, frivolous or malicious complaints, and abetment ofoffences.Jail time from 6 months to 5 years, for bureaucrats caught takingbribes or creating obstacles in fair bidding.Government shall debar a bidder (seller) if he has been convicted ofan offence under Prevention of Corruption Act, 1998 or or IPC or if hetries to bribe an officer / otherwise play mischief in the bidding.

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