ICAI Proposes Rs 5 Crore Government Consultancy Tenders Reservation for Firms with Lower Net Worth:

According to the sources, these days, the Institute of Chartered Accountants of India (ICAI) is reviewing and analysing a set of proposals submitted to address the eligibility barrier faced by professional firms in government consultancy tenders in India. These proposals came to light after the first meeting of the chairman, vice chairman of its Committee of Aggregation of CA firms and Secretary, Department of Expenditure.

The ICAI, giving guidance to about 4.5 lakh chartered accountants (CAs), has requested the Ministry of Finance to reserve government consultancy projects of about Rs 5 crore for micro, small and medium enterprises (MSMEs). The ministry has asked the institute to furnish more details before deciding, as per the sources.

The proposal was made after it was discovered that the large professional service firms, including the Big 4, are enjoying an extra advantage from the government tenders due to the turnover-linked qualification rules. The issue was also highlighted by the ministry itself in the July 22 memo, urging the central departments to introduce amendments to the tender rules in favour of the firms with lower net worth.

The ICAI has officially stated that "we have to consider the number of partners, the capital, the employees and, importantly, the experience of the firm. A firm may not be very large in terms of size, but it may have significant experience in the particular area for which the work is being awarded. The idea is to make smaller consultancy government projects of up to Rs 5 crore accessible to smaller firms. The size of the company should not be the only consideration; we also have to look at the experience that a firm has in doing the kind of work for which the consultancy is being awarded."