Integrity Pact in tenders: what bidders sign

The buyer commits to give all bidders the same information and to exclude people with a conflict of interest. Bidders commit not to offer any benefit to the buyer's staff and not to make undisclosed agreements with other bidders on prices, specifications, certifications, subsidiary contracts or whether to bid. They must not pass on information the buyer gives them, must disclose payments to agents and intermediaries, and must declare transgressions in the last three years. Indian bidders name their foreign principals and foreign bidders name their Indian agents.

The pact is implemented through Independent External Monitors (IEMs) nominated by the Central Vigilance Commission from its empanelled list. Two are appointed for most organisations and three for Maharatna and Navratna PSEs. A bidder can write to the IEMs about discrimination in eligibility conditions, evaluation criteria, commercial terms or specifications. The IEMs' advice is non-binding, and the model pact asks for their written report within 8 to 10 weeks of the reference to them.

DoE's office memorandum of 19 July 2011 tells Ministries to include the pact in procurements of a nature and value threshold they decide, with the Minister's approval. As guidance, the threshold should cover 80 to 90% of annual procurement by value. The manuals therefore set no single national value threshold. The tender document says whether a pact applies and lists the IEMs.

The Commission's revised Standard Operating Procedure (Circular 04/06/23 of 14 June 2023) is reproduced in the manuals' annexes. It says entering into the pact is an eligibility criterion. Buyers may adapt the model format to the situation.

A violation can lead to disqualification or debarment from future Government of India procurement. In the model text, a bidder disqualified before award can be made to pay damages equal to the EMD or bid security. If the contract is terminated for a violation, the buyer can recover liquidated damages of the contract value or the Performance Bank Guarantee amount. A false statement on previous transgressions is treated in the same way. The pact runs for the winner until 12 months after the last payment and for other bidders until 6 months after award.

Do not treat it as boilerplate. A bidder who does not sign is disqualified, and in a joint venture or consortium every partner must sign. For sub-contractors the pact is a three-party arrangement and the main contractor is responsible for their adoption. Signatories also agree not to approach the courts while a matter is before the IEMs, and to wait for their decision.