Client Query 134:- Hi, Under National or International Competitive Bidding can a procuring agency award contract for High-Tech Equipment/Machines along with their yearly Service Level Agreement (SLA) for maintenance and support services till the entire useful life or End of Life (EoL) of machines/equipment (i.e. 3,5,7 or 10 years). All prospective bidders/OEMs (Original Equipment Manufacturer) having miscellaneous brands will be invited for widest possible competition. Bidding Documents price schedule will contain separate pricing of equipment as well as yearly SLA’s cost (3,5,7 or 10 years). The justification behind the long term SLA under competitive bidding (by providing equal opportunity to all potential bidders/OEMs) is to eliminate the monopolistic approach after the award of contract for the Equipment/Machines to a successful Bidder/OEM for subsequent yearly SLAs.
Eithesham Ahmed, UK
Answer:- Thank you for writing to us. As per your query, the Public Procurement law, rules and regulations ensure level playing field, balance of stakeholder interest, competition, transparency and fairness in the public procurement process. On the other side, long term procurement / service agreement with a supplier or contractor are generally not recommended under Public Procurement regime. Such long duration agreements restrict competition and do not provide level playing field to all the market players. The agreements should not preferable exceed three years in duration.
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