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Swiss Challenge Method For Procurement of Innovation

Challenges in the current procurement process

Government procurement processes often suffer from long delays due to the need to demonstrate transparency in awarding contracts. This long process frustrates both the bureaucrats and vendors. The procurement is made even more cumbersome for products which are innovative in nature and therefore finding a minimum of three bidders is not possible. To overcome this challenge, there is a need for creative thinking by the government. The Swiss Challenge method is used globally to overcome this hurdle in adopting innovative solutions.

What is the Swiss Challenge

A Swiss Challenge method is a technique usually used by the public sector to procure innovative products. An interested party initiates a proposal for a government contract or a bid for the project. The government then puts these details, including technical specifications and commercials in the public domain and allows other interested parties to bid. Once the bids are received, the original bidder gets the opportunity to match the best bid. The original bidder may withdraw in case they are not able to meet the best bid.

Challenges in the Swiss Challenge Method

The Swiss Challenge method has been implemented in India for some key public interest projects. However, it has been seen that the litigation often initiated by the unsuccessful bidders is a deterrent for the bureaucrats. Additional complications arise when the bids received by other bidders are different in their approach compared to the original bidders’ proposal. The second challenge is the perceived information asymmetry in the process, where the bidders may feel that the original bidder had greater access to information.

The Supreme Court of India has however said that the Swiss Challenge method may be used for procurement in the public domain with adequate safeguards being built into the processe

Indian railways adopted the Swiss Challenge Method for the development of 23 railway stations in India. The adoption of the Swiss Challenge not only helped the railways implement non-traditional designs but also encourages innovators to propose new solutions for the traditional problems.

Why is the Swiss Challenge Still Needed

Though there are some success stories in India where the Government has procured services through the Swiss Challenge, this method remains mostly untapped. However, with the great innovation Indian companies and individuals are driving globally, the government would be doing a disservice if this novel method is not used for procurement of innovative solutions. By allowing innovators to propose solutions to traditional problems, the government would have greater access to the best and brightest minds. Additionally, a higher number of organizations and entrepreneurs would be encouraged to work with the Government.

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