J&K Finance Dept issues guidelines for additional performance security on abnormally low bids
Srinagar: The Jammu and Kashmir Finance Department has issued fresh instructions to all departments and implementing agencies regarding the collection of additional performance security from bidders quoting abnormally low prices against advertised project costs.
As per the circular , the move follows observations during competitive bidding processes where certain bidders quoted rates significantly below the estimated cost. The Ministry of Road Transport & Highways (MoRTH), Government of India, has also taken note of the matter, prompting the Finance Department to review and issue detailed guidelines in line with Government of India instructions.
According to the order, in cases where the bid price is 10% to below 20% lower than the project cost, the additional performance guarantee will be increased by 0.1% for each percentage below 10%, starting at 11%. For bids 20% or more below the project cost, the increment will be 0.2% for each percentage below 20%, starting with an additional 1% of the bid price.
The guidelines also direct that the additional performance guarantee percentage be rounded off to the next lower or higher percentage depending on whether the decimal point is below or above 0.5. This security will be treated as part of the performance guarantee and will be taken only after approval of the next higher authority.The Finance Department has clarified that these guidelines will come into immediate effect. All Administrative Secretaries, Heads of Departments, and executing agencies have been instructed to ensure strict compliance.
