Negotiation with L1 – What’s the need?
If tenders are floated on L1 basis, then why negotiate again with the L1 bidder after bidding? Doesn’t this defeat the entire purpose of competitive bidding?
Recently, for one of our clients, we quoted for a railway tender and became L1. A negotiation meeting was called where:
• Officers were arrogant and refused to hear our explanation of why prices were higher.
• We transparently showed our costing, but they weren’t even bothered to consider it.
• The only demand: “Give 5% discount because last accepted rates are lower.”
One committee member even behaved as if presenting our cost justification was some kind of crime.
Finally, the tender was discharged after wasting more than 4 months. Now the tender has been recalled, which means another 4–6 months wasted. By then, price escalation will increase costs further, or maybe some other competitor will bid at suicidal rates.
And these railway bureaucrats will be happy by justifying their tender discharge process.
This isn’t procurement efficiency. It’s simply a bureaucratic comfort zone — cancel, delay, repeat. Meanwhile, genuine bidders are punished, projects are delayed, and costs only go up.
If negotiation after L1 is the norm, then let’s not call it competitive bidding. Call it what it really is: an exercise in futility.
Ashwini Vaishnaw Ministry of Railways, Government of India