All Odisha Contractors’ Welfare Association (AOCWA) and All Odisha Contractor’s Association (AOCA) Seeks Reconsideration of Works Department Memo on Below-Estimate Bidding

 By Tapaswini Sahoo

Bhubaneswar/Odisha, January 8 : The All Odisha Contractors’ Welfare Association (AOCWA) and All Odisha Contractors Association (AOCA) have jointly expressed serious concern over the recent Works Department Memo No. 173/W dated 03 January 2026, which abolishes the long-standing 14.99% below-estimate threshold in public works tendering. The Associations hvlave urged the Hon’ble Minister, Works Department, Govt of Odisha to reconsider the decision in the larger interest of quality infrastructure, transparency, and sustainability of the contracting ecosystem.

Speaking on this issue Jagadish Patra, President AOCWA reiterated that the 14.99% below-estimate threshold was originally introduced through Works Department Memo No. 12366/W dated 08 November 2013 as an amendment to Clause 36 of the OPWD Code, Volume-I, Appendix-IX. Over the years, this framework was refined through eight subsequent circulars to address loopholes such as the lottery system and to regulate under-quoting through the Additional Performance Security (APS) mechanism.

According to the Associations, the earlier APS structure acted as a crucial safeguard against reckless under-bidding while ensuring quality workmanship. Under this system:

•            Bids up to 4.99% below estimate were treated as a “Safe Zone” with no APS,

•            Bids up to 9.99% below estimate attracted APS equal to 50% of the difference between the estimated cost and the quoted price,

•            Bids beyond 9.99% and up to 14.99% below estimate required APS equivalent to 150% of the difference.

The Associations stated that it had repeatedly represented before the Government seeking a rational modification of the threshold—either aligning it with the Schedule of Rates (SoR) or restricting it to 4.99% below estimate—keeping in view the industry’s average contractor margin of around 7.5%. Such a measure, it argued, would ensure quality output and fair competition without jeopardising project execution.

However, the new memo dated 03 January 2026 has completely dismantled the established APS framework and instead adopts, verbatim, the Ministry of Road Transport and Highways (MoRTH) order dated 30 April 2025. The Association pointed out that MoRTH tenders typically involve projects worth thousands of crores, whereas State PWD works may be as small as ₹50,000. Applying MoRTH norms wholesale to State-level works, the Associations cautioned, is impractical and will encourage abnormally low bids, leading to compromised quality and stalled projects.

Anil Mahalik, President AOCA highlighted the absence of clear instructions regarding tender finalisation when SC/ST bidders attain parity with the L-1 bidder by availing the 10% price preference applicable up to ‘B’ Class contractors—a category comprising nearly 80% of contractors. The lack of clarity, it warned, could result in inconsistent and arbitrary decisions by tender-inviting authorities.

Further concern was raised over the vagueness of Point No. (vi) of the circular, which leaves excessive discretion with Technical Committees. The Associations questioned how, after publishing the Schedule of Rates and preparing detailed estimates, the Government could claim that it is “not possible to fix a normative percentage below the estimated cost” to identify abnormally low bids. Such ambiguity, the Associations asserted, creates scope for discretion and corruption.

In light of these issues, the All Odisha Contractors’ Welfare Association and All Odisha Contractors Association have proposed the following alternative APS structure:

•            Up to 2.00% below the estimated cost: APS equivalent to 100% of the difference between the estimated cost and the quoted price;

•            Up to 4.99% below the estimated cost: APS equivalent to 200% of the difference between the estimated cost and the quoted price.

The Associations have earnestly appealed to the Hon’ble Minister for Works Department, Govt of Odisha for reconsideration of the present circular. It emphasised that a balanced and transparent policy is essential to protect the quality of public works, ensure fair competition, and enable the contractors’ fraternity to survive, grow, and compete effectively at national and global levels.

Jagadish Patra, President AOCWA, Anil Mahalik, President AOCA, Dilip Jena, General Secy, AOCA, BhibutiJena  General Secy, AOCWA alongwith other members of the associations were present during the press conference to raise the issue.