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Job Outsourcing and Manpower Outsourcing

Job Outsourcing and Manpower Outsourcing

6.0 Brief Introduction:

A tender was published to outsource the services of Lifting and Shifting of Equipments. The prices were invited in terms of Rate per Manday. After opening price bids, it was noted that the rate quoted by L1 was not complying the minimum wages act including some other relevant statutory acts for payment, hence tender was scrapped. Prior to scrapping of this tender similar tender was published by another division in which the L1 of previous tender was disqualified due to non-compliance of Pre-Qualification Criteria. The order was placed on successful L1 bidder in the second tender.

6.1 Background:

The standard pre-qualification criteria of having past experience of specific value was included in both the tenders which was different in both the tenders based on the tender value, in line with the purchase manual of the organisation. The L1 bidder in first tender was complying the minimum wages act but the rates quoted by him did not comply the other statutory requirements like PF, ESICC, paid leave etc which were likely to be considered in view of longer duration of the contract with consistent experienced manpower requirement. However, these details were discussed after price bid opening with the consultancy of HR Executives. Finally, the tender was scrapped. In the subsequent tender, the L1 of previous tender could not meet the pre-qualification criteria of experience of specified value and got disqualified. The successful L1 bidder meeting all the tender as well as statutory requirement of payment of wages got the order.

During investigation, it was observed that even in the second tender the rates were invited in terms of ‘rate per manday’ as in case of manpower outsourcing for skilled/semi-skilled/unskilled manpower requirement. The scope of work was lifting and shifting of equipments which could have been defined as Job outsourcing. The rate could have been invited activity wise for moving equipments of specific weight category between specified locations. It was noted that the lifting /shifting of equipments was continuous requirement but not predictable in terms of locations within the yard, various stores and site. It was also covering equipment of a large range in terms of weight which were not known in advance. It was not feasible for users to determine list of activities and its frequency. Therefore, requirement was defined in terms of no. of skilled manpower and rates were invited on ‘per manday’ basis. However, there was again possibility of L1 not meeting the minimum wage requirement like previous tender.

6.2 Implementation:

As a systemic improvement the following was suggested and the same was implemented through a memorandum from the Functional Director concerned.

(a) The SOW related to ‘Job Outsourcing’ where the activities cannot be quantified and rates are required to be invited on ‘per manday’ basis, the corresponding tenders should be treated as similar to ‘Manpower Hiring’ and the cases are to be routed through HR department for their input w.r.t. minimum wages.

(b) The category of manpower projected in such SoW should be clearly defined as unskilled, semi-skilled, skilled etc.

(c) The SOW should also clearly mention about minimum wages inclusive of all relevant applicable factors like PF, ESIC, paid leave etc in addition to basic, DA etc. for the respective category of manpower. Any information in this regard may be obtained from HR dept. while defining the SOW.

6.3 Impact and Benefits:

With the implementation of the above mentioned Systemic improvement, the possibility of cancellation of tenders at later stage because of non-compliance to statutory requirement by bidder was reduced.


Corporate Office

  • Mazagon Dock Shipbuilders Limited,
    Dockyard Road, Mazagon,
    Mumbai - 400 010,
    Maharashtra, India.
  • Telephone No.:
    Board: +91 - 2376 2000, 2376 3000,
    2376 4000

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