NHAI Tightens Highway Project Tender Provisions

New Delhi, Sep 17 (PTI) State-owned NHAI on Wednesday tightened provisions of request for proposal (RFP) to seek bidders for national highway projects with an aim to improve execution, reduce delays, and bring down cost of highway development.

Stringent conditions in various clauses under the RFP will help ensure that only technically capable and experienced contractors qualify for the implementation of national highway projects, the National Highway Authority of India (NHAI) said in a set of clarifications on RFP provisions.

"One of the important elements of the provision is clarification of the 'similar work' criteria in bid qualification, which has been often misrepresented by contractors to gain eligibility for large-scale highway projects despite having experience only in minor or peripheral works that do not reflect the complexity and scale of full-fledged highway development, the agency said.

NHAI further clarified that 'similar work' shall refer exclusively to completed highway projects that include all major components comparable to those required for the project for which the bid has been invited.

In addition to refining the qualification criteria, the clarifications to RFP also seek to address the unauthorised engagement of EPC (engineering, procurement and construction) contractors in HAM (hybrid annuity model) and BOT (build, operate, transfer) or toll projects, and subcontractors in EPC projects.

"Instances have been observed where concessionaires or selected bidders have engaged contractors without the required prior approval of the Authority or exceeded the permissible subcontracting limits," the NHAI said, adding that such practices not only violate contractual norms but also pose risks to quality assurance, project timelines, and regulatory oversight.

The NHAI asserted that any unauthorised sub-contracting and subcontracting beyond permissible limits will be classified as "Undesirable Practice", thereby attracting penalties on par with fraudulent practices.

This move will help reinforce discipline in contract execution and safeguarding the integrity of the implementation process, it said.

NHAI said another major component of the reform involves prohibiting the submission of "Bid and Performance Securities" that are sourced from third parties.

"It has been reported that some selected bidders have furnished financial securities issued by third parties, which undermines the principle of accountability and raises concerns regarding enforceability and bidder liability," NHAI pointed out.

Now, NHAI said, it has been clarified to disallow such third party-sourced instruments, ensuring that only securities backed by the bidder or its approved entities are accepted.

The step is expected to enhance financial transparency and improve the enforceability of contractual obligations, NHAI added.