New norms for global projects

The Central Vigilance Commission has drawn up a new set of guidelines for projects funded by international agencies such as the World Bank, IMF and Asian Development Bank.

The new guidelines will put an end to existing practice of government departments and agencies adhering to the guidelines of foreign donors, while ignoring Indian government rules, in concluding contracts for projects funded by them. The new guidelines also draw a distinction between grants-in-aid and loans.

The decision could open up a debate on whether Indian guidelines that insist on the lowest financial tender to be selected, even if quality questions remain, is better than standards followed by the international agencies. “You cannot always insist on L1,” a senior official pointed out.

Tender norms

An official said a key difference in projects funded by foreign agencies was that most of them had a different way of awarding tender, different from CVC guidelines for selecting the lowest financial tender for negotiations.

The earliest record of a formal clarification that allowed government agencies to ignore Indian norms for such contracts is an order issued on October 1, 1999 by the then CVC. It amended the 1998 guidelines on post-tender negotiations by government departments.

More than a decade later, on October 28, 2011 the Commission clarified that the CVC guidelines “would not be applicable in projects funded by the World Bank, ADB etc. if found to be in conflict with the applicable procurement rules of the funding agencies.” The new guidelines, issued on April 6, overturn those norms.