2 weeks ago
Finance Ministry Boosts Domestic Firms' Role in Consultancy Contracts
The government hires outside experts, called consultants, to help with big projects.
For a long time, only very large companies got these jobs.
The rules were very strict, requiring high earnings and many workers.
Small Indian companies could not compete even when they were smart and good at their work.
The Finance Ministry studied how these jobs were given out over three years.
They found that the rules were unfair and limited competition.
So they decided to change the rules to give domestic firms a fair chance.
Now, more Indian companies can try to win these consulting jobs.
Experts say this will help good companies grow and succeed on their own merit.
The Finance Ministry wants to give homegrown firms a bigger role in consultancy contracts awarded by the Central government.
A review of consultancy tenders floated on GeM over the last three financial years found issues in eligibility and qualification criteria.
Concerns included high turnover requirements, higher weightage to firm experience over key personnel qualifications, and staff strength demands exceeding project needs.
The expenditure department said such criteria may unduly restrict competition in procurement of consultancy firms.
Industry players and experts welcomed the move, saying domestic companies can now compete on merit rather than size or legacy brand.
- Who
- The Finance Ministry's expenditure department, Central government procuring entities, domestic consultancy firms, and industry experts.
- What
- The Finance Ministry is moving to overhaul eligibility criteria in consultancy procurement tenders to give domestic firms a bigger role.
- Where
- India, via consultancy procurement tenders floated by Central government procuring entities on GeM.
- When
- Date not specified; the review covered consultancy tenders floated in the last three financial years.
- Why
- To remove eligibility criteria, such as high turnover and staff strength requirements, that unduly restrict competition and favor the largest firms.
Key facts
- Ministry
- Finance Ministry (expenditure department)
- Platform reviewed
- GeM (Government e-Marketplace)
- Review period
- Last three financial years
- Key findings
- High turnover requirements, overemphasis on firm experience, excessive staff strength criteria
- Official concern
- Eligibility criteria may unduly restrict competition in consultancy procurement
- Industry response
- Welcomed by industry players and experts, including Vector Consulting Group and Nangia Global
Quotes
Kiran Kothekar
Co-Founder & Director, Vector Consulting Group
““After that, it is sheer delivery capability which should help firms stand out and grow on their own merit,” he said, adding that the focus of the evaluation of the firm should be first on the firm's experience in executing the project, and secondly on the capacity to execute the project, which includes the expertise of the people to be deployed and the size of the firm.”
businesstoday.in
““This can be assured by insisting that the team deployed should be of employees of the firm, and not a team assembled by hiring just before the engagement starts,” he said.”
businesstoday.in
Sources
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