Public procurement in India is governed by several key legislations and guidelines that ensure transparency, fairness, and efficiency in the procurement process for government entities. Below is a summary of the key legislations and guidelines in public procurement in India:

1. General Financial Rules (GFR), 2017

Overview: The GFR is the cornerstone of public procurement in India, providing comprehensive guidelines for procurement by central government departments, ministries, and other public sector organizations.

Key Features:

• Defines procurement methods: e.g., open tender, limited tender, single tender, etc.
• Mandates e-procurement for purchases above specified thresholds.
• Promotes fairness, transparency, and competition.
• Includes provisions for contract management and payment terms.

2. Public Procurement (Preference to Make in India) Order, 2017

Overview: Issued under the Make in India initiative to promote local manufacturing and reduce reliance on imports in public procurement.

Key Features:

• Preference to local suppliers for goods and services with a defined minimum percentage of local content.
• Applicable to all ministries, departments, and PSUs.
• Applies to all types of procurement—goods, services, and works.
• Defines thresholds for local content and provides for the creation of a nodal ministry to oversee implementation.

3. Government e-Marketplace (GeM) Rules, 2017

Overview: GeM is an online platform designed for the procurement of common-use goods and services by government departments and PSUs.

Key Features:

• Provides transparency in procurement through an easy-to-use e-platform.
• Allows direct purchase for goods and services below a specific threshold.
• Provides features like e-bidding, reverse e-auction, and demand aggregation to ensure competitive prices.
• Ensures faster procurement, better compliance, and more efficient decision-making.

4. Central Vigilance Commission (CVC) Guidelines

Overview: The CVC issues guidelines to prevent corruption in public procurement and ensure ethical standards.

Key Features:

• Defines best practices for tendering, including open competition and transparent selection processes.
• Mandates the creation of integrity pacts between buyers and suppliers to curb corruption.
• Recommends e-tendering to reduce human intervention and opportunities for manipulation.

5. Central Public Procurement Portal (CPPP) Guidelines

Overview: CPPP is a national platform for online tendering by central government ministries and organizations.

Key Features:

• Provides a centralized system for tender publication and bid submission.
• Ensures transparency and accessibility by making tender documents publicly available.
• Helps in tracking tender status and monitoring contract awards.

6. Manual for Procurement of Goods, 2017

Overview: A manual that provides detailed guidelines for the procurement of goods by the government.

Key Features:

• Explains various procurement processes and procedures.
• Offers templates and sample documents for tenders and contracts.
• Lays down processes for bid evaluation, vendor selection, and post-procurement activities.

7. Manual for Procurement of Works, 2019

Overview: Provides guidance for the procurement of construction and civil works by the government.

Key Features:

• Defines procurement methodologies like item rate contracts, lump-sum contracts, and engineering, procurement, and construction (EPC) contracts.
• Includes risk management and dispute resolution processes.
• Specifies guidelines for contractor selection, bid evaluation, and contract management.

8. Manual for Procurement of Consultancy and Other Services, 2017

Overview: Provides a framework for the procurement of consultancy services by government departments and organizations.

Key Features:

• Specifies quality- and cost-based selection (QCBS) methods for selecting consultants.
• Emphasizes transparency and competition in the selection process.
• Provides templates for contracts and other necessary documentation.

9. Public Procurement Bill, 2012 (Proposed)

Overview: A draft bill intended to provide a comprehensive legal framework for public procurement, though it has not yet been enacted.

Key Features:

• Aims to create a national procurement policy.
• Establishes regulatory authorities to oversee public procurement processes.
• Provides grievance redressal mechanisms for bidders and suppliers.
• Defines rules for the publication of procurement plans and contract awards.

10. Indian Contract Act, 1872

Overview: Governs the formation, performance, and enforceability of contracts, including government contracts.

Key Features:

• Ensures that all procurement contracts follow the legal requirements of a valid contract.
• Provides remedies in case of breach of contract.
• Outlines general principles for procurement agreements between the government and vendors.

11. Foreign Exchange Management Act (FEMA), 1999

Overview: Governs cross-border transactions, including the procurement of goods and services from foreign suppliers.

Key Features:

• Regulates foreign currency payments in procurement.
• Ensures compliance with regulations for international competitive bidding and foreign contracts.

12. Competition Act, 2002

Overview: Ensures fair competition in the market and prevents anti-competitive practices in public procurement.

Key Features:

• Prohibits anti-competitive agreements such as price-fixing and bid-rigging in tenders.
• Ensures that procurement processes promote competition and fair pricing.

13. Right to Information (RTI) Act, 2005

Overview: Promotes transparency and accountability in government procurement.

Key Features:

• Allows citizens to request information about government tenders, contracts, and procurement processes.
• Ensures public access to procurement-related documents.

14. Environment Protection Laws

Overview: Certain procurement projects, especially large infrastructure works, must comply with environmental regulations.

Key Features:

• Adherence to Environment Protection Act, 1986 for sustainable procurement.
• Complies with rules under the Air Act, 1981 and Water Act, 1974 for pollution control in procurement projects.
• Incorporates environmental assessments in large-scale procurement processes.

Conclusion

India’s public procurement system is governed by a combination of laws, guidelines, and platforms aimed at fostering transparency, competition, and fairness. Key frameworks like the General Financial Rules (GFR), 2017, the Public Procurement (Preference to Make in India) Order, 2017, and various e-procurement platforms like GeM and CPPP provide a structured approach to government procurement while also promoting local manufacturing and protecting public interest.

Also read: What are General Finance Rules (GFRs) & where they are Used?