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Fixation of Reserve Price and its Disclosure during Auction

Published in Finance. Tags: .

Government of West Bengal
Finance Department
Audit Branch

No. 4068-F(Y) 25th May, 2015

MEMORANDUM

Establishments under the State Government have to undertake sale of materials and assets owned by the Government by invitation of bids either through tender process or by auction. In either process of sale, H1 responsive bidder, i.e., the bidder quoting the highest price is selected. However, the highest bid needs to be compared with the reserve price below which the bids are not considered.

At present there is no standard guideline regarding fixation of reserve price and its disclosure. The State Government has examined the issues and decided to prescribe a standard procedure in respect of fixation and disclosure of reserve price.

Therefore, the undersigned is directed to lay down the procedure outlined below regarding reserve price.

  1. The departmental authority will fix and approve the reserve price.
  2. The reserve price approved by the Departmental will be kept confidential in sealed packet under custody of the officer in charge of the tender/auction, till opening of the financial bids.
  3. The financial bids shall be opened and evaluated following the provisions of WBFR, as amended from time to time.
  4. After completion of the bid evaluation for sale, the tender/auction committee will recommend the H1 bid to the officer in charge of the tender/auction without declaring the result,
  5. After receipt of the recommendation of the tender/auction committee, the officer in charge of tender/auction will open the sealed packet containing the reserve price, compare it with the H1 bid and declare the H1 bidder if the bid is equal to or higher than the reserve price.
  6. If the H1 bid falls below the reserve price, the same shall be rejected and bid process initiated afresh.

Sd/- H.K. Dwivedi
Principal Secretary to the
Government of West Bengal

No. 4068-F dated 25.05.2015, Source