The Department of Expenditures has appealed to ministries to relax requirements for tenders for consulting services, including turnover criteria and personnel requirements. This measure is intended to expand competition and allow a greater number of firms to participate in the bidding.
The Department of Expenditures, operating under the Ministry of Finance, advised state procurement bodies to avoid unreasonably high turnover requirements, overemphasizing the past experience of a consulting firm, or setting minimum staffing levels significantly exceeding the necessary staff for completing the assignment.
This recommendation emerged after analyzing consulting tenders placed through the State Electronic Trading Platform (GeM) by central state procurement bodies over the last three fiscal years.
What conclusions did the government draw?
The Department of Expenditures identified three main problems in the selection and qualification criteria used in consulting tenders. These issues included relatively high turnover requirements, the significant weight given to a consulting firm's experience compared to the qualifications and experience of the key personnel proposed for the assignment, and minimum personnel requirements that were much higher than the actual workforce needed to implement the project. The Department noted that such criteria can unreasonably restrict competition when procuring consulting services. It emphasized that qualification conditions must be based on the real capabilities and resources required to complete a specific consulting assignment.
Why is the turnover requirement a problem?
The Department of Expenditures' Guide to Consulting Service Procurement for 2025 states that some procurement bodies set a minimum financial turnover qualification of five to ten times the estimated cost of the consulting work. The management notes that such requirements seem high and capable of reducing competition. While higher qualification thresholds may increase the likelihood of selecting firms with sufficient experience and potential, they can also decrease the number of companies able to participate in the competition. The Department stated that qualification criteria should be set on a reasonable basis, and higher minimum turnover requirements should only be applied if there is adequate justification. For higher-value assignments, the annual minimum turnover should not be blindly set as a multiple of the assignment's cost; instead, an upper limit for the required turnover can be considered so that competition is not limited to the four or five largest consulting firms. The management also points out that excessively high qualification criteria can increase costs without improving the quality of consulting services.
Firms with smaller turnovers can participate
The latest memorandum confirms guiding principles allowing firms with smaller turnovers to participate in public contracts for consulting, provided they meet the requirements necessary for satisfactory completion of the assignment. The management also provides for some relaxation of qualification criteria for startups. According to the document, these criteria can be eased by twenty percent if the startup meets the technical and quality specifications at the Request for Proposal (RFP) stage. This can promote wider participation beyond larger firms with higher income and established financial capacity.
What about the firm's past experience?
The Department also sought to prevent the disproportionately large weight given to a consulting firm's past experience during the evaluation process. The 2025 procurement guide indicates that firm experience is considered during the preliminary selection stage. During the technical evaluation stage, it is recommended to give more weight to the proposed methodology, as well as the qualifications and experience of the key personnel. The department's evaluation model assigns 5-10 percent weight to the corresponding consulting firm's experience, compared to 20-50 percent for the proposed approach and methodology, and 30-60 percent for the qualifications and experience of key personnel. The management argues that the firm's experience can be assigned a relatively modest weight since it has already been taken into account at the preliminary selection stage.
Personnel requirements must match project needs
The Department also expressed concern about the requirement for tender participants to have a large number of employees on staff. It noted that if a minimum staffing level is set as a selection or qualification condition, it must correspond to the workforce actually required to complete the consulting assignment. The Department stated that 'disproportionately high personnel requirements without adequate justification can unreasonably restrict competition.'
Rules should not favor foreign consultants
The procurement guide also clearly stipulates that qualification conditions must be related to the capabilities and resources necessary for the specific contract. It states that there should be no 'qualification criteria that would benefit foreign consultants to the detriment of domestic consulting.' For small assignments, the management also allows shortlists to consist only of national consultants in certain situations, such as when qualified domestic firms are available at a competitive price or when the nature of the assignment does not require the involvement of a foreign consultant.
