← Policy & Regulation: Pricing and Tariff Control (all topics)
Public procurement - bidding-capacity norms
What it is
Tender eligibility rules that cap how much work a contractor may bid for, based on past turnover, completed project size, net worth and existing order book. They exist to stop under-resourced firms winning work they cannot execute
They effectively segment the market by contractor size
Impact on industries
- Protects established contractors from underqualified competition, and protects the authority from execution failure
- Creates a natural ladder - completing larger projects raises future bidding capacity, so growth compounds for those who execute well
- Caps growth mechanically: a contractor cannot bid beyond its capacity however strong its execution, so scaling requires balance sheet before opportunity
- Encourages joint ventures and consortia formed to meet criteria rather than for operational logic, which complicates accountability