Govt enacts rules for fining, suspending violating contractors
In instances of rule violations, a penalty of 2.5% of the total bid price may be imposed, depending on the severity of the infraction.
Finance ministry has introduced regulations to fine and suspend contractors, suppliers, and bidders involved in state tenders who violate tender processes or fail to commence work after securing contracts.
The regulations, titled the 'Rules Governing the Fine and Suspension of Tenderers, Suppliers, and Contractors Participating in a State Tender for a Specified Period, were officially gazetted and took effect on Wednesday.
The purpose of these rules is to provide a framework for imposing fines and suspensions on those who violate fiscal laws and regulations, maintain the integrity of state procurement processes, and implement policies aimed at preventing malpractice among contractors and suppliers. The rules are designed to deter violations and ensure compliance with established procedures.
Violations will be addressed by the Procurement Appeal Board, which operates under the finance ministry. This board is responsible for hearing cases related to tenders and determining appropriate penalties.
The new rules identify 16 specific situations where action may be taken against contractors, suppliers, and bidders, including:
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Submitting invalid documents or withholding information during the bidding process.
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Preventing others from participating in a bid or attempting to manipulate the process in favour of another party.
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Collusion between two or more bidders to ensure that a particular party wins the contract.
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Submitting multiple bids by one individual on behalf of different entities to create an appearance of competition.
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Coordinated withdrawal of bids or agreements designed to provide undue advantages to a specific bidder.
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Refusing to sign a tender or provide required security when applicable.
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Failing to fulfil contractual obligations without a valid reason, such as a natural disaster.
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Submitting invalid documents when hiring subcontractors.
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Abandoning a contract after its signing or before commencing work.
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Failing to adhere to agreed schedules in structural development projects.
The regulations also address cases of non-compliance with the financial regulations and situations where a contractor, tenderer, or supplier is found to be suspended by another country or by a state aid or loan provider.
Fines, penalties
In instances of rule violations, a penalty of 2.5% of the total bid price may be imposed, depending on the severity of the infraction.
Those who are fined will be eligible to participate in new state tenders upon payment of the penalty.
Suspensions
The regulations also empower the Procurement Appeal Board to suspend contractors, tenderers, or suppliers under certain conditions, with suspension periods determined based on the frequency of violations:
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For a first violation, the suspension period ranges from 3 months to 1 year.
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For a second violation, the suspension can extend from 2 to 3 years.
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For repeated violations, the suspension can last up to 5 years.
In cases of suspension, any security provided by the respondent may be withheld or suspended.
Those facing potential actions will be given five days to respond before any measures are taken, allowing time for further investigation into the matter.
