Rule 193 of The General Financial Rules 2017 Least Cost System
Original Rule Text
Visual Summary
For standard, routine assignments with established methodologies.
Responsive, technically qualified proposal with the lowest cost.
Unlike QCBS, technical score has no weightage in final evaluation.
Executive Summary
Rule 193 of The General Financial Rules, 2017 outlines the ‘Least Cost System’ (LCS) for selecting consultants. This method is specifically designed for standard or routine assignments, such as audits or engineering designs of non-complex projects, where established methodologies and practices are already in place. The core principle of LCS is to select the technically qualified proposal that offers the lowest evaluated cost, without assigning any specific weightage to the technical score in the final evaluation, distinguishing it from Quality and Cost Based Selection (QCBS).
In-Depth Analysis of the Rule
The Least Cost System (LCS) is a procurement method detailed in Rule 193 of The General Financial Rules, 2017, primarily used for consulting services. It emphasizes cost-efficiency for assignments where the quality aspects are well-defined and standardized, reducing the need for extensive technical differentiation among proposals.
Breakdown of the Rule:
- Applicability: LCS is suitable for standard or routine assignments. This includes tasks like audits and engineering designs for projects that are not complex. The key characteristic is the existence of well-established methodologies, practices, and standards for such assignments.
- Evaluation Process: Unlike the Quality and Cost Based Selection (QCBS) method, LCS does not assign a specific weightage to the technical score during the final evaluation. The primary determinant for selection is the cost.
- Selection Criterion: The consultant whose proposal is responsive, technically qualified, and offers the lowest evaluated cost will be selected. This implies that a minimum technical threshold must be met, but beyond that, cost is the deciding factor.
Practical Example:
Imagine a government department needs to conduct a routine annual financial audit. The scope of work is clearly defined, and standard auditing practices are well-established. In this scenario, the department would use the Least Cost System (LCS) as per Rule 193 of The General Financial Rules, 2017. They would invite proposals, evaluate them to ensure all bidders meet the minimum technical qualifications (e.g., certified auditors, relevant experience), and then select the firm that offers the lowest price among all technically compliant proposals. The technical expertise, while important for qualification, would not be given a separate score to compete on, as the service is considered standardized.
Related Provisions
Rule 193 is part of a broader framework for procurement of services. Other relevant rules include:
- Rule 192 of The General Financial Rules, 2017 Quality and Cost Based Selection: Details the QCBS method, which contrasts with LCS by giving weightage to technical proposals.
- Rule 194 of The General Financial Rules, 2017 Single Source Selection / Consultancy by nomination: Describes exceptional circumstances for direct negotiation/nomination, an alternative to competitive bidding.
- Rule 191 of The General Financial Rules, 2017 Methods of Selection/ Evaluation of Consultancy Proposals: Provides an overview of the various methods for selecting consultants, including LCS and QCBS.
Learning Aids
Mnemonics:
- LCS: Lowest Cost Selection for Standard Services.
Process Flowchart:
Multiple Choice Questions (MCQs)
1. According to Rule 193 of The General Financial Rules, 2017, the Least Cost System (LCS) is most appropriate for which type of assignments?
- A) Highly complex, innovative projects requiring unique technical solutions.
- B) Standard or routine assignments with well-established methodologies.
- C) Projects where technical expertise is the sole criterion for selection.
- D) Assignments involving significant research and development.
Show Answer
Correct Answer: B) Standard or routine assignments with well-established methodologies.
2. In the Least Cost System (LCS) as per Rule 193 of The General Financial Rules, 2017, what is the primary factor for selecting the successful bid?
- A) The highest technical score.
- B) The most innovative approach.
- C) The lowest evaluated cost among technically qualified proposals.
- D) A balanced combination of technical score and cost.
Show Answer
Correct Answer: C) The lowest evaluated cost among technically qualified proposals.
3. How does Rule 193 of The General Financial Rules, 2017, differentiate LCS from QCBS regarding technical scores?
- A) LCS gives higher weightage to technical scores than QCBS.
- B) LCS assigns a fixed, but lower, weightage to technical scores.
- C) LCS does not assign any weightage for technical scores in the final evaluation.
- D) Technical scores are only considered in LCS if costs are identical.
Show Answer
Correct Answer: C) LCS does not assign any weightage for technical scores in the final evaluation.
4. Which of the following is an example of an assignment for which the Least Cost System (LCS) under Rule 193 of The General Financial Rules, 2017, would be appropriate?
- A) Developing a new, cutting-edge software system.
- B) A complex urban planning project requiring innovative solutions.
- C) A routine financial audit of a government department.
- D) A consultancy for strategic policy formulation.
Show Answer
Correct Answer: C) A routine financial audit of a government department.
5. What is a prerequisite for using the Least Cost System (LCS) for assignments, according to Rule 193 of The General Financial Rules, 2017?
- A) The assignment must involve significant research and development.
- B) The assignment must be highly specialized and unique.
- C) Well-established methodologies, practices, and standards must exist for the assignment.
- D) The procuring entity must lack internal expertise for the assignment.
Show Answer
Correct Answer: C) Well-established methodologies, practices, and standards must exist for the assignment.
Frequently Asked Questions (FAQs)
What types of assignments are suitable for the Least Cost System (LCS) under Rule 193 of The General Financial Rules, 2017?
LCS is appropriate for standard or routine assignments, such as audits and engineering designs of non-complex works, where well-established methodologies, practices, and standards already exist.
How does LCS differ from QCBS in terms of technical evaluation, according to Rule 193 of The General Financial Rules, 2017?
Unlike Quality and Cost Based Selection (QCBS), the Least Cost System (LCS) does not assign any weightage for the technical score in the final evaluation. The selection is based purely on the lowest evaluated cost among technically qualified proposals.
What is the main objective of using the Least Cost System (LCS) as per Rule 193 of The General Financial Rules, 2017?
The main objective of LCS is to achieve cost-efficiency for assignments where the quality of service is standardized and clearly defined, ensuring that the government obtains the required service at the most economical price from a technically competent provider.
Key Takeaways
- Rule 193 of The General Financial Rules, 2017 defines the Least Cost System (LCS) for procurement of consulting services.
- LCS is specifically for standard or routine assignments with established methodologies and practices.
- The selection criterion is the lowest evaluated cost among technically qualified proposals.
- Unlike QCBS, technical scores do not carry weightage in the final evaluation under LCS.
Conclusion
Rule 193 of The General Financial Rules, 2017 provides a clear framework for procuring standardized consulting services efficiently. By focusing on the lowest cost among technically compliant bids, the Least Cost System ensures fiscal prudence for routine tasks where quality is not a differentiating factor among qualified providers. This method is crucial for optimizing government expenditure on well-defined assignments.