Karnataka govt moves to curb rampant use of tender exemptions

Bengaluru: The Finance Department has imposed sweeping curbs on government departments and undertakings skipping the tender process by invoking a legal provision whose rampant use had raised questions over transparency.

In a detailed circular, Additional Chief Secretary (Finance) L K Atheeq said tender exemption under Section 4(g) of the Karnataka Transparency in Public Procurements (KTPP) Act should be reserved for “extremely necessary and urgent” circumstances.

Atheeq issued the five-page circular on March 15, a day before election code of conduct kicked in, to regulate the use of Section 4(g).

DH had reported last month that Section 4(g) was invoked 1,056 times between 2021 and December 2023 to procure goods and services worth several crores.

“Goods and services for annual and pre-determined events such as Independence Day, Republic Day, Rajyotsava, Jayantis, Dasara and film festival must be procured through a tender process,” the circular stated.

Atheeq has mandated tender process for works that come under approved action plans and estimates. “Proposals under Section 4(g) should not be submitted for civil works whose rates are inclusive of contractors’ profits and overhead charges...By awarding works to contractors under Section 4(g), the government may lose out on the profit of deriving competitive rates,” the circular stated.

The Finance Department pointed out that many organisations are involved in the preparation of detailed project reports (DPR) for which there are no fixed rates. “There’s no way to find out if the rate quoted by a particular organisation is justified. So, this must be done through the tender process,” he stated.

Further, good and services being procured via tendering for several years “cannot suddenly be brought” under Section 4(g), the circular stated.

“Proposals under Section 4(g) should not be submitted just because good and services are being procured through government undertakings,” Atheeq said. The Finance Department has also barred post-facto approvals for good and services procured without a tender process.

Atheeq has warned disciplinary action against officials found flouting tender norms, including misuse of Sec 4(g).