The Department of Expenditure has advised central government ministries and departments against setting overly high turnover thresholds, giving excessive weight to a consultancy firm’s past experience or prescribing unrealistic minimum payroll requirements in consultancy tenders, saying such conditions could restrict competition.
The advice follows a study of consultancy tenders floated by central government procuring entities on the Government e-Marketplace over the past three financial years. The study found instances of all three practices.
In an office memorandum issued on July 22, the department’s Procurement Policy Division said some tenders prescribed comparatively high turnover requirements, gave greater weight to the consulting firm’s experience than to the qualifications and experience of proposed key personnel, and required bidders to have minimum staff strength “far exceeding the actual manpower required for execution of the project.”
The department said such eligibility and qualification criteria may “unduly restrict competition” and reiterated provisions of the Manual for Procurement of Consultancy Services, Second Edition, 2025, on evaluation of qualifications and technical criteria.
It also specifically directed procuring entities to ensure that any minimum payroll requirement is proportionate to the manpower actually needed to execute the assignment. Disproportionately high staff requirements without adequate justification could unnecessarily restrict competition, it said.
Consultants said the advisory could open more government assignments to smaller and specialised domestic firms.
Suraj Nangia, founder and head of government and public sector advisory at Nangia Global, called it “a pivotal, pro competition reform” in government consultancy procurement. He said high turnover multiples, rigid staff requirements and excessive emphasis on firm-level credentials had often favoured the largest players, even when such filters were not relevant to the assignment.
