Disqualification of bidders: Overreach or a safeguard?

Public procurement is a process by which a public authority procures goods, works or services using public funds, in execution of its duties and functions. The public procurement process is key to ensuring fairness, transparency, cost-efficiency and quality in the execution of public-private partnership projects.

Bidding in such public procurement typically involves two stages. The first stage is selecting bidders that meet the technical and financial requirements set forth in the bid documents. The bidders that are shortlisted in this stage are then required to submit their price bids in the second stage, based on which the preferred bidder is chosen.

Even though the process is designed to be standardized, transparent and just, ambiguities in some “standard” qualification and disqualification provisions present challenges. For example, one typical norm found in standardized bid documents provides for disqualification on the following criteria:

(a) “any entity which has been barred by the Central/State Government from participating in any project and the bar subsists as on date of the bid application, would not be eligible to submit the bid application either individually or as a member of a joint venture, or any entity such bidder has been previously blacklisted by any public entity, being an instrumentality of the Government or otherwise.

(b) a bidder in the previous 3 years shall not have failed to perform any contract as evidenced by an imposition of a penalty by arbitral or judicial authority nor should have been expelled from any project by any public entity nor have had any contract terminated by any public entity”.