Sustainable Public Procurement: Towards a lowâcarbon economy

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30 Sustainable Public Procurement: Towards a low carbon economy by providing for a standard of “best value for money” the GFR ensures flexibility to procurers to implement life cycle analysis costing for of goods in terms of their energy efficiency. However despite the textual flexibility incorporated in the GFR, there are certain inherent problems that may need to be addressed if the energy efficiency criterion has to be incorporated within public procurement. For instance Rule 160(vii) that deals with specifications requires that, they be stated in a clear and unambiguous manner. The specification should also be broadly stated so as to attract a wider number of parties and propounds the use of “standard specifications, which are widely known to the industry” to ensure so. 18 In the context of energy efficiency this may be a problem, since the energy efficiency standards and measurements for only a limited number of goods are well defined. Thus the lack of standards for energy efficiency for specific goods may itself be an impediment to the adoption of such standards, given that the GFR supports the provision of widely used industry standards while formulating specifications for the procurement of goods. The GFR has been drafted as “financial rules” and not legal provisions and therefore is denied the statutory effect of a legal provision. The Controller and Auditor General’s Office (CAG) is responsible for the implementation of the rules. However since the CAG is primarily an ex post regulator – and that also only in the case of fraud, malpractice or impropriety, therefore there is extremely limited regulatory oversight available over the implementation and full application of the rules by public procurement agencies. This also creates certain leakages within the system. The CVC guidelines on the hand can be compared to the GFR Rules in terms of their status and statutory effect. However given that it is the CVC which implements these guidelines provides an important advantage to them. The CVC is one of the strongest statutory bodies that oversee the functioning of government ministries and departments and therefore the fear of punitive sanctions are adequate to create a negative incentive for procurement officers to follow the guidelines issued by periodically. 18 Also See Use of Product with Standard Specification, Circular No. 14/04/07 Central Vigilance Commission, http://www.cvc.nic.in/098VGL25.pdf accessed, 12 June 2008. T E R I Report No. 2007GL01
31 Sustainable Public Procurement: Towards a low carbon economy Central Vigilance Commission guidelines Public procurement being a governmental activity falls into the ambit of issues that is included within the CVC oversight authority. The CVC has brought into force a series of guidelines on procurement of goods, works and services. 19 Some of those pertinent to energy efficiency will be discussed below. Section 8.1(c) of the Act, includes public sector undertakings within the ambit of CVC’s jurisdiction to undertake an inquiry into the actions of the officers therein. The CVC guidelines provide for several steps in enabling transparency within the public procurement process. These include, mandatory public announcement of tenders through print media and the concerned departmental/ministry website, bar of post facto alteration or amendment of qualifying requirements, sufficient time given to bidders in the upfront, clarifications to be issued to all bidders in a uniform manner. It also states that in multilateral funding (like World Bank and ADB in most cases), attendant-bidding conditions that are prescribed in the tender should be followed. It has also been specified that in order to avoid delays, a time for each stage of the procurement process should be specified in the outset, delineate the responsibility of different officials and agencies concerned with the procurement process., conclude contracts within the original validity of tenders, limit the extension of validity of tenders to those in case of exceptional circumstances and lastly to extend the rate contract system to larger number of common user items, that are required in the bulk. Around mid last year, the CVC came across several cases of irregularity regarding the requisition of items of non-standard size. Reacting to this development, it brought a circular stating that, “items with standard specifications only should be stipulated in bid documents.” It further provided for an obligation of providing a reason for procuring of non-standard specification items. 20 In another case the CVC enacted a circular censuring the award of contracts on the basis of nominations. The primary objective was to ensure transparency in the award of contracts in public sector undertakings. 21 This illustrates the nature and scope of oversight that the CVC provides especially in the case of PSUs. There have also been other instances of specific 19 See for detailed list, http://www.cvc.nic.in/proc_works.htm accessed, 12 June 2008. 20 Supra Note 4. 21 http://www.cvc.nic.in/005crd19.pdf accessed on 12 June 2008. T E R I Report No. 2007GL01
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