The Institute of Chartered Accountants of India is working on a set of proposals aimed at addressing eligibility barriers faced by domestic professional firms in government consultancy tenders, after the chairman and vice chairman of its Committee on Aggregation of CA Firms met the Secretary, Department of Expenditure, and discussed the issue, sources aware of the matter told ETCFO.
During the meeting, the ICAI representatives shared their views on restrictions and qualification requirements that can make it difficult for domestic firms, particularly smaller practices, to participate in government consultancy tenders, sources said.
The Department of Expenditure Secretary asked ICAI to prepare a proper draft setting out the changes the institute believes could help domestic firms gain government consultancy tenders, including restrictions and eligibility conditions that could be reconsidered, sources said.
The proposals discussed in the meeting have not yet been formally submitted to the Department of Expenditure. ICAI is currently working on the draft, which is expected to first go through its internal approval process, sources said.
Among the ideas discussed is that government consultancy contracts of up to Rs 5 crore should be eligible only for small and mid sized consulting firms, with no minimum turnover threshold for such assignments, sources said.
The institute is also considering whether the turnover, manpower and relevant experience of firms working together through a registered network could be considered jointly while determining eligibility for government consultancy tenders.
“ICAI has worked on few parameters and will be presenting it before council in next 15 days, and after internal approval it will be taken ahead with DOE,” a senior ICAI official said on condition of anonymity.
ICAI to prepare detailed draft
The Committee on Aggregation of CA Firms has been examining issues relating to the aggregation and growth of domestic CA firms.
The committee’s chairman and vice chairman recently met the Secretary, Department of Expenditure, and discussed the participation of domestic firms in government consultancy work, sources said.
The ICAI representatives shared their views on tender requirements and other conditions that can create entry barriers for domestic firms, particularly smaller practices, according to sources.
The Department of Expenditure Secretary asked the institute to prepare a detailed draft setting out the changes it would like to propose in the government consultancy tender framework, sources said.
The draft has not yet been formally submitted to the Department of Expenditure. ICAI is expected to place it before its Council for consideration before taking it forward with the government.
Rs 5 crore government consulting window
One of the key ideas being examined by ICAI is that government consultancy contracts of up to Rs 5 crore should be restricted to small and mid sized consulting firms, with no minimum turnover requirement prescribed for such assignments, sources said.
The proposal is aimed at creating a defined opportunity for smaller domestic consulting firms to participate in government consultancy work, while removing turnover based eligibility as a barrier for assignments within the proposed Rs 5 crore limit.
The idea could cover consultancy work for the central government and, where applicable, assignments undertaken in consultation with state governments.
The proposal is still at the discussion and drafting stage within ICAI. Its final wording, scope and eligibility conditions have not yet been settled, sources said.
Registered network firms may combine credentials
Another idea under consideration relates to CA firms working together through a registered network.
ICAI is exploring whether the turnover, manpower and relevant experience of participating firms could be considered jointly while assessing eligibility for government consultancy tenders, sources said.
The proposal could allow firms working together through a registered network to demonstrate their combined capabilities where an individual firm may not independently meet the prescribed eligibility criteria.
The exact framework and the conditions under which credentials could be combined are yet to be worked out.
The proposal is being considered in the broader context of ICAI’s efforts to facilitate aggregation and collaboration among domestic CA firms.
Annual idea exchange also proposed
The institute is also considering an annual idea exchange involving government representatives, regulators, professional firms and clients involved in consultancy assignments, sources said.
The proposed forum could provide an avenue for discussing procurement requirements, eligibility conditions and practical issues faced by government procuring entities and professional firms.
The idea is also at the discussion stage, and details relating to its format, participants and scope are yet to be finalised.
Next step is internal ICAI process
The proposals discussed during the meeting are yet to be formally presented to the Department of Expenditure.
The immediate next step is expected to be preparation of the draft and its consideration within ICAI. According to the senior ICAI official, the proposals are expected to be presented before the Council in the next 15 days.
If the proposals receive internal approval, ICAI would subsequently take them forward with the Department of Expenditure for further discussion.
Any change in government consultancy tender eligibility or procurement conditions would depend on subsequent consideration by the government and the competent authorities.
