Rajasthan Enhances Procurement Framework: New Amendments Introduced

The Government of Rajasthan on September 19^th, 2024 notified Rajasthan Transparency in Public Procurement (Second Amendment) Rules 2024 further to amend the Rajasthan Transparency in Public Procurement Rules 2023.  

Key Highlights of the Notification

1. Amendment of Rule 42

• The most significant change in Rule 42 involves sub-rule (6). The language has been updated to expand the options for financial guarantees in public procurement:
  • Previous Provision: Required guarantees only from a scheduled bank.
  • New Provision: Allows for Insurance Surety Bonds issued by insurers registered with the Insurance Regulatory and Development Authority of India (IRDA). This change provides more options for bidders to secure their proposals, thereby potentially increasing participation in public procurement processes.

2. Amendment of Rule 75

• Changes to Rule 75 introduce further refinements:
  • Addition of Clause (ee): A new clause has been added to sub-rule (3) to explicitly recognize Insurance Surety Bonds as acceptable forms of security. This addition underscores the government’s commitment to accommodating modern financial instruments in procurement.
  • Modification of Sub-rule (4): The existing reference to clauses in sub-rule (3) has been updated to reflect the inclusion of the new clause (ee), thereby maintaining clarity in legal references.

Implications of the Amendments

These amendments are expected to:

• Enhance Participation: By allowing Insurance Surety Bonds as an alternative to bank guarantees, more bidders may feel encouraged to participate in public tenders, thus increasing competition.
• Promote Transparency: The amendments align with the overarching goal of the Rajasthan Transparency in Public Procurement Act, ensuring that procurement processes remain open and fair.
• Modernize Procurement Practices: Incorporating insurance products into procurement rules reflects a modern approach to risk management and financial security in public projects.

The amendments to the Rajasthan Transparency in Public Procurement Rules signify a progressive step towards enhancing the procurement framework in the state. By accommodating diverse financial instruments, the government is not only broadening the scope for bidders but also fostering a more transparent and competitive

Effective Date: September 19^th 2024.