In my experience, however, it is the mindless granting of contracts to firms that may be aggressive in bidding, but may take short-cuts in the execution. This causes unnecessary expenditure in the redoing of work that should have been done well in the first place.

Many years ago, while I was doing Sunil Mittal’s residence, he asked me to step in and do their corporate office in Mehrauli – apparently the L1 had backfired, and they were in a mess! There was no question of another L1. We went in, audited the work, took much of it apart, and redid it to last, at a higher cost than their L4! A waste of time and money for Bharti Airtel Ltd.

In my own office, it has taken us 2 months to determine what our IT solution is going to be. The lowest cost – yes – but at what cost? The L1 specifications we were looking at will be outdated in a year. The 25% higher quote warned us of this and recommended something else. Loved that they bothered to do that!

In a typical L1 scenario, the tender has been drawn up based on outdated specifications and methods, a cut-paste job. Item rates are filled in as target rates based on current market prices. Just remember:

• The lowest price bidder tends to compromise.
• Technical compliance commitments are not met.
• Product reliability is an issue.
• Long term the work done or the product is unsustainable.
• Maintenance is high cost after defect liability period.