NHAI tightens RFP rules: Clarifies ‘similar work’, bans third-party securities in highway projects

The National Highways Authority of India has issued clarifications to Request for Proposal provisions aimed at strengthening contractor qualification norms, enforcing compliance, and enhancing transparency in highway project
| Photo Credit:
Govarthan M / The Hindu

In order to improve the quality of project execution, reduce delays, and bring down the overall lifecycle cost of the National Highway projects, National Highways Authority of India issued clarifications to provisions of RFP that are aimed at strengthening contractor qualification norms, enforcing compliance in project execution, and enhancing transparency in financial submissions.

According to the Ministry of Road Transport & Highways, stringent conditions in various clauses under the RFP will help to ensure that only technically capable and experienced contractors qualify for the implementation of National Highway projects. “One of the important elements of the provision is clarification of the “Similar Work” criteria in bid qualification, which has often been misrepresented by contractors to gain eligibility for large-scale highway projects despite having experience only in minor or peripheral works that do not reflect the complexity and scale of full-fledged highway development,” the Ministry said.

‘Similar Work’ clarified

NHAI has now clarified that “Similar Work” shall refer exclusively to completed highway projects that include all major components comparable to those required for the project for which the bid has been invited, the official release said.

Curbing unauthorised subcontracting

In addition to refining the qualification criteria, the clarifications to RFP also seek to address the unauthorised engagement of EPC contractors in HAM & BOT (Toll) projects and subcontractors in EPC projects. Instances have been observed where concessionaires or selected bidders have engaged contractors without the required prior approval of the Authority or exceeded the permissible subcontracting limits, it added.

Such practices not only violate contractual norms but also pose risks to quality assurance, project timelines, and regulatory oversight. Any unauthorised subcontracting and subcontracting beyond permissible limits will be classified as “Undesirable Practice,” thereby attracting penalties on par with fraudulent practices.

Ban on third-party securities

This move will help to reinforce discipline in contract execution and safeguard the integrity of the implementation process, the release stated. “Another major component of the reform involves prohibiting the submission of “Bid and Performance Securities” that are sourced from third parties.

It has been reported that some selected bidders have furnished financial securities issued by third parties, which undermines the principle of accountability and raises concerns regarding enforceability and bidder liability.

Now, it has been clarified to disallow such third-party-sourced instruments, ensuring that only securities backed by the bidder or its approved entities are accepted. The step is expected to enhance financial transparency and improve the enforceability of contractual obligations,” the ministry said. (ANI)

Published on September 18, 2025