The Department of Expenditure under the Ministry of Finance has issued new guidelines to central government ministries and departments, asking them to make eligibility conditions for consultancy tenders less restrictive. According to reports from Business Standard, this advisory follows a comprehensive review of consultancy procurement tenders floated through the Government e-Marketplace (GeM) by central government procuring entities over the past three financial years. The department identified that relatively high turnover requirements, greater weight given to consulting firm's experience than key personnel qualifications, and minimum staff requirements far higher than project needs may unduly restrict competition in consultancy services procurement.
The 2025 Manual for Procurement of Consultancy Services reveals that some procuring entities have been setting minimum qualifying financial turnover at five to 10 times the estimated cost of the consultancy work. As reported by Business Standard, the department notes that such requirements appear high and can reduce competition, while higher qualification thresholds can increase the likelihood of selecting firms with sufficient experience and capacity. The manual emphasizes that qualification criteria should be fixed on a reasonable basis, with higher minimum turnover requirements used only when there is adequate justification. For higher-value assignments, minimum annual turnover should not be set blindly as a multiple of the assignment value to prevent competition being restricted to just four or five biggest consultancy firms.
The latest memorandum reiterates guidelines that allow firms with lower turnover to participate in government consultancy contracts, provided they meet the requirements needed for satisfactory execution of the assignment. According to the 2025 procurement manual, the manual also provides relaxation in qualification criteria for start-ups by up to 20 per cent, subject to the start-up meeting quality and technical specifications during the request for proposal (RFP) stage. This relaxation could help widen participation beyond larger firms with higher revenues and established financial capacity, potentially giving domestic consulting firms a better chance to compete with large multinational companies.
The department has sought to prevent a consultancy firm's past experience from receiving disproportionate weight in the evaluation process. As reported by Business Standard, the 2025 procurement manual assigns 5-10 per cent weight to the consultancy firm's relevant experience, compared with 20-50 per cent for the proposed approach and methodology and 30-60 per cent for the qualifications and experience of key staff. The manual notes that the firm's experience can be given a relatively modest weight because it has already been considered during shortlisting. The department's model evaluation framework ensures that firm's experience is considered during the shortlisting stage, while giving greater weight to the proposed methodology and qualifications of key personnel at the technical evaluation stage.
The department has raised concerns about requiring bidders to have a large number of employees on their payroll, stating that if minimum staff strength is prescribed as an eligibility or qualification condition, it should correspond to the manpower actually required to complete the consultancy assignment. According to Business Standard, the department warned that disproportionately high staff strength requirements, without adequate justification, may unnecessarily restrict competition. The manual also makes clear that qualification conditions should be linked to the capability and resources needed for the specific contract, with no qualification criteria that would be advantageous to foreign consultants at the cost of domestically provided consultancy. For smaller assignments, the manual allows shortlists to comprise only national consultants when qualified domestic firms are available at competitive cost or when the nature of the assignment does not justify including a foreign consultant.
