Manual for Procurement of Consultancy services (Second Edition, 2025): Department of Expenditure, Ministry of Finance
Manual for Procurement
of
Consultancy services
(Second Edition, 2025)
Government of India
Ministry of Finance
Department of Expenditure
FOREWORD
(Second Edition, 2025)
As part of initiatives to enhance transparency, fairness, competition, value for money, and good governance in public procurement, the Department of Expenditure, Ministry of Finance, released the Manuals for Procurement of Consultancy and Other Services alongside Manuals for Works and Goods in 2017/2019 (later updated in 2022). The Second Edition of the Manual for Procurement of Goods: was published in 2024. These manuals have shaped procurement practices and are widely trusted by professionals and training institutions.
2. Since their publication, various developments – policy insights, stakeholder discussions, the Covid pandemic, the Methodology for Assessment of Procurement (MAPS-II) Report (2020), Model Tender Documents for Goods, Non-consultancy and Consultancy Services, FTA dialogues, the new DFPR 2024, amended GFR 2017, and the new Mediation Act- have necessitated a comprehensive revision of the manuals.
3. The procurement of Consultancy Services assumes importance in the increasingly complex environment in which Government agencies now operate. This manual emphasizes ease of business for service providers and clarity for procurement professionals. Topics such as applicability to various entities, procurement categorization, strategies for larger procurements, conflict of interest, outsourcing of procurements, auto bid extensions, interest-free advance payments, new forms of performance securities, capping price variations and liquidated damages, and some special types of Consultancies among others, have been updated.
4. I would like to ‘acknowledge the outstanding work done by the team led by Shri Chinmay Pundlikrao Gotmare (Joint Secretary), Shri Sanjay Aggarwal (ex-Advisor, PPD) and the efforts of Shri Anil Kumar (Deputy Secretary, PPD), Shri Sher Bahadur (Under Secretary, PPD), Shri Girish Bhatnagar (Sr. Consultant), and Shri Vikram Rajvanshi (Procurement Specialist, PPD). This was a truly collaborative effort, and I would like to thank Ministries, Departments, other Organizations, and individuals who reviewed the drafts of the Manual and provided their valuable input.
5. I am confident, this: updated manual would help in streamlining the process of procurement of consultancy services. Your feedback and comments are always welcome.
Date: 20.06.2025
(Vumlonment Vualnam)
Secretary (Expenditure)
Preface
1. Compliance: This Manual adheres to the relevant laws, GFR, and clarifications/ OMs issued by the Procurement Policy Division, Department of Expenditure, Ministry of Finance (‘the Ministry’) up to April 2025. In case of inconsistencies between this Manual and prevailing law or GFR, the extant law and GFR shall prevail. However, the provisions of this Manual shall prevail in case of discrepancies with the clarifications/ OMs issued till April 2025 by the Ministry. Procuring entities are advised to stay informed about any further changes in the relevant law, GFR, and clarifications/ OMs from the Ministry.
2. Interpretation:
a) Any mention of writing or written includes matter in digital communications (including email), manuscript, typewritten, lithographed, cyclostyled, photographed, or printed – under or over signature or seal or digitally acceptable authentication, as the case may be.
b) Words in the singular include the plural and vice-versa. Words importing the masculine gender shall be taken to include other genders. Words importing persons include any company or any association/ body of individuals/ companies and viceversa.
c) Any reference to any legal Act, Government Policies or orders shall be deemed to include all amendments to such instruments, from time to time, till date.
d) Sentences containing ‘may’ are to be considered desirable or good practices which procuring entities are encouraged to implement.
e) Sentences containing ‘should’/ ‘shall’ are required to be followed.
f) Sentences containing “allowed” indicate an optional course of action to be decided upon on merits.
3. Manual for Procurement of Goods as a Comprehensive Reference: The ‘Manual for Procurement of Goods, 2024’ is written to be a comprehensive reference. Other Manuals (Works, Consultancy and Non-consultancy Services) are self-sufficient from the point of carrying out a procurement, however common topics relevant for deeper understanding of the fundamentals of procurement are included only in brief in these manuals, giving reference to relevant details in the ‘Manual for Procurement of Goods, 2024’.
4. Manuals and Model Tender Documents: Model Tender Documents (MTD) for Procurement of Goods, and Non-consultancy Services were issued in 2021 and that of Consultancy Services was issued in 2023. These complement the respective procurement manuals since the MTDs contain additional details on many topics that the Manuals can accommodate. Therefore, Procuring Officials are urged to read both Manuals and MTDs in tandem for better understanding.
5. Annexures: Voluminous details from various orders/ websites are relegated to annexures to maintain an uninterrupted flow of text on a topic. Since these orders/ websites undergo frequent revision, it would be easier to update the annexures than the body of the Manual.
6. An attempt has been made in this edition of Manuals to illustrate some topics with relevant examples.
Table of Contents
FOREWORD … iii
Preface … v
Table of Contents… vii
Acronyms… xi
Procurement Glossary … xiii
Chapter 1: Introduction to Procurement of Consultancy Services… 1
1.1 Procurement Rules and Regulations; and this Manual… 1
1.2 Clarification, Amendments and Revision of this Manual… 2
1.3 Applicability of this Manual… 2
1.4 Categorisation of procurements … 4
1.5 Authorities Competent to incur Expenditure on a Procurement … 6
1.6 Basic Aims of Procurement – Five R’s of Procurement … 7
1.7 Refined Concepts of Cost and Value – Value for Money… 7
1.8 Fundamental Principles of Public Procurement… 7
1.9 Public Procurement Infrastructure at the Centre … 8
1.10 Preferential Purchase from certain sources … 8
1.11 When is Procurement of Consultancy Services justified … 30
1.12 Principles for Public Procurement of Consultancy Services… 30
1.13 Legal Aspects Governing Public Procurement of Consultancy Services… 31
1.14 The Law of Agency – applicable to Procurement of Consultancy services… 31
1.15 Public Procurement Cycle in Procurement of Consultancy Services… 31
1.16 Nomenclature Conundrum … 32
Chapter 2: Need assessment and Procurement Planning … 33
2.1 Need Assessment… 33
2.2 Procurement Proposal (Concept Paper) for Consultancy services … 33
2.3 Preparation of Terms of Reference (ToR)… 34
2.4 Estimating Costs, Setting the Budget, and Seeking Approval … 36
2.5 Final Administrative and Budgetary Approvals… 38
2.6 Need assessment, Formulation of Terms of Reference, and Procurement Planning – Risks and Mitigations… 38
2.7 Developing a Procurement Plan… 39
Chapter 3: Participation of Bidders and Governance Issues… 43
3.1 Eligibility Criteria for Participation in Tender Process … 43
3.2 Legal Status of Bidders… 43
3.3 Governance Issues in Procurement of Services… 45
3.4 Integrity Pact (IP)… 49
3.5 Grievances and its Redressal: … 50
3.6 Conduct of Public Servants in Public Procurement – Risks and Mitigations… 52
3.7 Development of New Sources and Registration/ Empanelment/ Pre-qualification of Firms … 54
3.8 Debarment of Suppliers … 56
3.9 Enlistment of Indian Agents … 61
Chapter 4: Bidding Design for Consultancy Services … 63
4.1 Types of Contracts… 63
4.2 Systems of Selection of Consultants… 68
4.3 Modes of Procurement… 73
4.4 Tendering Systems… 75
4.5 Channels of Procurement … 75
Chapter 5: Bid Invitation Process … 79
5.1 Preparation and Uploading/ Floating of Tender Documents… 79
5.2 Preparation of the Request for Expression of Interest (REoI) Document… 80
5.3 Preparation of the Request for Proposals (RfP) Document … 83
5.4 Uploading of Tender Documents: Mandatory e-Publishing (Rule 159 of GFR 2017)…89
5.5 Obtaining Tender Documents and Submitting Bids… 91
5.6 Opening of Bids … 96
5.7 Transparency and Protecting Third-Party Rights of Bidders… 97
5.8 Bidding Invitation Process- Risks and Mitigations … 98
Chapter 6: Forms of Securities, Prices, Payment Terms and Price Variations … 99
6.1 Forms of Security… 99
6.2 Payment Clause … 103
6.3 Terms of Payment… 103
6.4 Advance Payment… 104
6.5 Firm Price, and Variable Price … 105
6.6 Statutory Taxes/ Duties/ Levies… 107
6.7 Recovery of Public Money from Consultant’s Bill … 109
6.8 Payment against Time Barred Claims… 109
Chapter 7: Shortlisting of Consultants, Expression of Interest (EoI) … 111
7.1 Basic Considerations … 111
7.2 Modes of EoI… 111
7.3 Evaluation of REoI … 112
7.4 Shortlisting – Risks and Mitigation … 116
Chapter 8: RfP Evaluation and Award of Contract… 117
8.1 Bid Evaluation Process … 117
8.2 Composition and Role of Consultancy Evaluation Committee (CEC)… 118
8.3 Preliminary and Techno-commercial Evaluation … 123
8.4 Evaluation of the Quality – Technical Proposals … 126
8.5 Evaluation of Cost and Selection of Winning Bidder… 131
8.6 Negotiations to Freeze Description of Service… 136
8.7 Award of Contract … 137
8.8 RfP, Evaluation and Award Stage – Risks and Mitigation… 141
Chapter 9: Special Types of Engagements … 145
9.1 Single Source Selection (SSS)… 145
9.2 Selection of Individual Consultants … 145
9.3 Selection of Specialized Agencies/ Institutions… 146
9.4 Selection of Non-governmental Organizations (NGO)… 147
9.5 Procurement Consultants… 147
9.6 Financial Advisors… 148
9.7 Auditors … 148
9.8 Public competition for Design of symbols/logos … 149
9.9 Procurement of Integrated IT Projects… 150
9.10 Hiring Consultants for Digital India Projects… 152
Chapter 10: Monitoring Consultancy Services Contract … 155
10.1 Contract Management… 155
10.2 Contract Administration … 156
10.3 Controlling Scope of Supply and Quantity … 163
10.4 Time Control… 164
10.5 Cost Control: Billing and Payments … 168
10.6 Concluding the Assignment and Post Contract review… 173
10.7 Disputes and Conflicts… 174
10.8 Terminating Services Prior to End of Contract… 189
109. Monitoring of Consultancy Contracts – Risks and Mitigation… 191
Annexure 1: Financial Powers to Sanction Expenditure for Purchases and Execution of Contracts … 197
Annexure 2: Suggested Structure of Schedule of Procurement Powers (SoPP)… 199
Annexure 3: Format of Procurement Proposal … 202
Annexure 4: Terms of Reference (ToR) Format … 204
Annexure 5: Bid Opening Attendance Sheet cum Report… 205
Annexure 6: CEC Committee Minutes Format for Consultancy Services… 206
Annexure 7: Format for Evaluation of Responsiveness… 209
Annexure 8: Format for Simplified Evaluation of Quality (LCS/ EoI) … 210
Annexure 9: Format for Detailed Technical Evaluation – Summary Sheet… 211
Annexure 10: Evaluation of Consultancy Firm’s Experience… 212
Annexure 11: Evaluation of Methodology & Work Schedule… 213
Annexure 12: Evaluation of the Key Professionals … 214
Annexure 13: Certificate for Procurement of Consultancy Services without Quotation …… 215
Annexure 14: Purchase Committee Certificate for Procurement of Consultancy Services. 216
Annexure 15: Limited Tender Form…… 217
Annexure 16: Example of Formula for Price Variation Clause…… 220
Annexure 17: Model Clauses to be inserted in Tenders etc. w.r.t Order (Public Procurement No.4…… 222
Annexure 18: Integrity Pact Format…… 225
Annex-1 to Integrity Pact – Guidelines for Indian Agents of Foreign Suppliers…… 229
Annex-2 to Integrity Pact – Appointment and Role of IEMs …… 230
Annexure 19: FAQs in Respect of Public Procurement Policy for MSEs Order, 2012 ……. 233
Annexure 20: Letter (Notification) of Award (LoA) of Contract…… 240
Annexure 21: Proposal for Extension of Delivery Period …… 241
Annexure 22: Format for Extension of Delivery Period/ Performance Notice…… 243
Annexure 23: Model Format for Correspondence with Consultant after Expiry of Delivery Date…… 245
Annexure 24: No Claim Certificate … 246
Annexure 25: Guidelines for Evaluation of Concurrent Application of the MSE and MII Preferences … 247
Annex to Annexure 25: Examples of Evaluation of Concurrent Application of the MSE and MII Preferences … 250
Annexure 26: FAQs About PPP-MII Order, 2017 … 258
Annexure 27: Format for Show-cause Notice for Debarment … 261
Annexure 28: Format for Debarment Order… 263
Annexure 29: Format of Declaration by the Appointed Arbitrator… 265
COMMENTS