Ours is a government funded organization. The security service in our organization is to be outsourced through a Security Agency. While inviting the tenders for the same, agencies have quoted unit rate of a security guard according to the minimum wages act including EPF and ESI provision.
è The agencies are established as a Security Agency, providing manpower (security guards) for security service on contract basis.
è The agency is registered under Service Tax. Service Tax would be payable by the agency on turnover of Rs. >10 lacs in a financial year.
è In case of any loss, theft / sabotage caused by/attributable to the personnel deployed, our department reserves the right to claim and recover damages from Contracting Agency.
While inviting the bids, there was a column in the financial bid to quote the service charge/overhead profit of the agency. Some agencies have not quoted overhead profit/service charge in the tender/bid and quoted only the minimum unit wages rate along with PF and ESI (quoted NIL amount in that column). The agency is willing to supply the manpower on minimum wage basis and without any profit.
The Contracting Agency shall provide to their security personnel with uniform with insignia, whistle and all other required items. The incidentals, such as, belt, shoes, socks, caps, torch with cell, cane stick, etc. shall be borne/supplied by the Agency at its cost.
The agency is bound to pay minimum wages to a labour engaged for this purpose through cheque only, without any deduction except PF/ESI and leave, if any. The payment will be released to the Agency after deducting the days of absence without suitable replacement or poor performance.
Whether a service provider can quote his rates (minimum wages only) for providing manpower without any profit? Is it mandatory to quote the rate/percentage of service charge/profit in the bid? If not, under what rule position, a service provider can do so?
If the agency does not quote their rate of profit in the bid, whether any permission would be required from the government to run a non-profit organization ?
My questions are:
1. Whether an agency (registered as a Security Agency to supply manpower) can be run on a no profit basis without having status of NGO ? (Where there is a possibility of loss in that business in the form of deduction on account of poor performance/ theft/sabotage etc.).
2. Whether the bid submitted by an agency (without profit) can be rejected, if it is not a NGO firm?
Please provide legal opinion in this regard.
