To streamline and standardise the IT services procurement process of Central and State government agencies, the National Association of Software and Service Companies (Nasscom) plans to have a uniform set of guidelines. This comes even as the IT industry is facing bottlenecks while implementing contracts from government bodies due to procedural issues.
Sangeeta Gupta, Senior VP and Chief Strategy Officer, Nasscom, told BusinessLine that the industry body has been actively working on the procurement norms and how they can be streamlined. “…MeitY had published a Model RFP standardising and defining terms and conditions around how a change request takes place, how a contract takes place, the payment terms, what is counted as delivery, etc. That is being notified. We are now working on how to get this adopted by State and Central institutions,” she said.
MeitY had published its Model Request for Proposal guidelines in 2018 to standardise the process of tendering and procurement for IT companies bidding for government projects. But this has not been adopted uniformly. For example, Infosys was blamed for glitches on the income-tax portal. But experts say the scope of such massive projects are often not well-defined.
Pareekh Jain, CEO of EIIRTrend, told BusinessLine that in private contracts, there is flexibility for renegotiating as requirements change. But for government projects, the requirements are not very clear and the software vendor can’t put everything in the RFP. “After getting the contract, if the cost goes up, any re-negotiation of pricing is difficult. The requirement-based scope and billing of project need to be added in the contract. Software requirement can’t always be defined beforehand like hardware,” Jain said.
“There needs to be milestone-based payments as there is always delay in getting payments on time. The rate card and pricing need to be standardised. There needs to be a global/national benchmark so that organisations and government bodies don’t try to negotiate too much as this hits the margins of IT vendors,” Jain added.
The existing system of tendering not only impacts established IT companies but also creates an entry barrier for new-age companies and start-ups.
“Today, if a government body wants to work with a start-up, it can’t do it easily because there are tender norms requiring the company to be of a certain size, earning a minimum revenue, having minimum experience to prove their capability,” Nasscom’s Gupta said.