Key facts
- Firms failing to pay worker wages or social security contributions can be barred from government tenders.
- Repeat offenders may face a total ban from all government projects.
- The finance ministry amended the General Financial Rules to implement the changes.
- The Department of Expenditure has the final authority on government-wide debarment orders.
- A consolidated national database of debarred firms will be maintained on the GeM portal.
The finance ministry has amended the General Financial Rules, empowering all central agencies to prohibit contractors from bidding on government projects if they fail to pay worker wages or deposit mandatory social security contributions. Repeat offenders could face a complete ban, according to an office memorandum from the Department of Expenditure (DoE).
The directive, based on a recommendation from the labour ministry, aims to standardize debarment procedures across ministries and enhance enforcement against contractors who repeatedly violate labor obligations on government-funded projects. It will supersede all prior procurement manuals.
Under the revised framework, ministries will maintain lists of debarred firms and report these cases to the Government e-Marketplace (GeM), which will host a consolidated national database. GeM will identify firms debarred multiple times and refer them to the Ministry of Labour and Employment for review.