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Modi govt plans national policy framework for Swiss Challenge system of public procurement

Niti Aayog has recommended a framework for Swiss Challenge method, among several other measures, to review the public procurement process.

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New Delhi: The Narendra Modi government is looking at forming a national policy framework for the Swiss Challenge method, as part of a larger review of the General Financial Rules (GFR) 2017 that guide the public procurement process in the country, ThePrint has learnt.

Under the Swiss Challenge method of procurement, a candidate makes a proposal for a project, which the government puts before the public to seek more proposals. Once these are received, the original candidate is allowed to match the best bid.

According to top government officials, a new Niti Aayog paper has recommended a national framework for this method, among several other measures, to review the public procurement process. The government will study these suggestions further and then take a call on implementation.

In a 2009 ruling, the Supreme Court had approved the Swiss Challenge method for award of contracts.

The paper notes that state governments were encouraged to draft guidelines for procurement using the Swiss Challenge method even as only Maharashtra and Karnataka adopted their own policy guidelines.

However, Karnataka, Andhra Pradesh, Rajasthan, Madhya Pradesh, Bihar, Punjab and Gujarat have used this method for roads and housing projects.

“To bring in uniformity, Niti Aayog has suggested a national policy framework for the Swiss Challenge methodology, which can be brought in after stakeholder consultations,” said a senior government official, who didn’t wish to be named.

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Niti Aayog calls for wider participation

The government think-tank has suggested that there should be wider participation and greater flexibility to promote innovation at the pre-proposal stage of this procurement process.

At the proposal stage, it has said, a single window clearance should be promoted by a separate panel, while at the post-proposal stage, there should be sufficient time for counter-bidders to respond.

ThePrint Friday reported that the government is planning to review the existing bidder selection methods for public procurement and has proposed amendments to GFR.

The Niti Aayog paper has recommended several alternative options — for the least cost selection or L1 method, and rating contractors, and ensuring a consolidated bank guarantee, as against individual projects.

What is the Swiss Challenge method?

In 2015, the Union cabinet had given its approval to redevelop 400 railway stations using the Swiss Challenge method.

At the time, then Union finance minister Arun Jaitley had said Swiss Challenge was a relatively new procurement process, where any interested person with credentials could submit a proposal to the government, which would be made online and other parties could give suggestions to improve and beat that proposal.

Jaitley had said an expert committee would accept the best proposal and the original bidder would get a chance to accept it if it is an improvement on his proposal. In case the original proposal does not match the more attractive counter, the project would be awarded to the latter.

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