(1) Conflict of interest for a procuring entity or its personnel and bidders is considered to be a situation in which a party has interests that may improperly influence performance of its duties or responsibilities, contractual obligations, or compliance with applicable laws and regulations.
(2) The situations in which a procuring entity or its personnel may be considered to be in conflict of interest include, but are not limited to the following:-
(a) a conflict of interest occurs when the private interests of a procuring entity or its personnel, such as personal, non-official, extra- professional or other relationships or personal financial assets, interfere or appear to interfere with the proper performance of its professional functions or obligations as a procurement official;
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(b) within the procurement environment, a conflict of interest may arise in connection with such private interests as personal investments and assets, political or other social activities and affiliations while in the service of the procuring entity, employment after retirement from service or employment of relatives or the receipt of a gift that may place the procuring entity or its personnel in a position of obligation;
(c) a conflict of interest also includes the use of assets of the procuring entity including human, financial and material assets, or the use of the office of the procuring entity or knowledge gained from official functions for private gain or to prejudice the position of someone the procuring entity or its personnel does not favour;
(d) a conflict of interest may also arise in situations where the procuring entity or any of its personnel is seen to benefit directly or indirectly or allow a third party, including family, friends or someone they favour, to benefit directly or indirectly from the decision or action of the procurement entity.
(3) The situations in which bidders participating in a procurement process or their representatives may be considered to be in conflict of interest include, but are not limited to the following:-
(a) if they or their personnel or representatives or agents have any relationship or financial or business transactions with any official of the procuring entity that are directly or indirectly involved in or related to the procurement process or execution of contract;
(b) if they receive or have received any direct or indirect subsidy from any other bidder;
(c) if they have the same legal representative, as any of the other bidders, for purposes of the bid;
(d) if they have a relationship with each other, directly or through common third party that puts them in a position to have access to information about or influence on the bid of another;
(e) if they participate in more than one bid in the same bidding process;
(f) if they have controlling partners in common;
(g) if a bidder or any of its affiliates participated as a consultant in the preparation of the design or technical specifications of the subject matter of procurement of the bidding process or were involved in such preparation in any way.
(4) In the qualification criteria and bidding forms, all bidders shall provide a signed statement that the bidder neither is associated nor has been associated directly or 8 indirectly with the consultant or any other entity that has prepared the design, specifications and other documents for the subject matter of procurement or is being proposed as Project Manager for the contract.
(5) (a) in case of a holding company having more than one independently manufacturing unit or more than one unit having common business ownership or management, only one unit shall be allowed to submit bid or quote to prevent any conflict of interest. Similar restrictions shall apply to closely related sister or subsidiary companies. Such bidders must proactively declare such sister or subsidiary company or common business or management units in similar lines of business;
(b) in cases of agents quoting in offshore procurements on behalf of their principal manufacturers, one agent shall not represent two manufacturers or quote on their behalf in a particular bid enquiry to prevent any conflict of interest.
(6) Any situation, where any personnel of a procuring entity is found to be in conflict of interest, shall be construed as breach of the code of integrity as specified under clause (1) of section 11 of the Act and rule 12. In such case, disciplinary action shall be initiated as per the relevant service rules applicable to the personnel concerned.
(7) Any situation, where a bidder is found to be in conflict of interest, shall be construed as breach of the code of integrity as specified under clause (v) of sub-section (2) of section 11 of the Act and shall be treated in the manner prescribed under sub-section
(3) of the section 11 of the Act.