Government tenders play a significant role in the public procurement process in India by providing the necessary mechanism for government departments, public sector undertakings, and other authorities to procure goods and services and execute infrastructure projects. Nevertheless, there is no guarantee that all tenders will lead to winning contracts. Some tenders may receive an insufficient number of bids, others may be cancelled due to incomplete project preparation, and individual bids may be rejected during their technical evaluation or due diligence process. For organizations engaged in public procurement, tender failures can lead to wasted money and delays in business activities, among other problems. Cancelled tenders and the process of retendering can affect the time frames and readiness of bidders to apply for future public procurement procedures.
In this regard, it is essential to study the reasons for failure of tenders along with their consequences for organizations involved in public procurement procedures.
This paper presents the statistics regarding the cancellation over the last five years, weaknesses in the documentation of budgeting processes, common errors made during the submission of tenders, and possible ways to improve the tender success rate.
Note: The data coverage is FY2021–22 to FY2025–26 for NIC eProcurement cancellation and retendering trends, selected CAG audit findings from earlier periods, and recent procurement developments available up to 31 October 2026.
Why Do Government Tenders Fail in India?
The failure of government contracts can happen at various stages of the procurement process. The issuing authority of the tender can cancel it, or there could be low bidder participation, such that the tender has to be renewed after its terms are modified. Distinctly from the aforementioned, the company tendering the bid on a project may find its bid turned down due to its failure to meet technical, financial or qualifying standards.
The causes of failure may be basically divided into two major camps: problems during the preparation of the tender and problems during procurement.
Seven Major Reasons Behind Government Tender Failures
1. Low bidder participation
Another contributing factor to the failure of procurement processes is the lack of bidders. In other words, an open tender may receive only one or two bids or none that qualify for eligibility criteria.
The reason for this may include qualification criteria being too restrictive, an unattractive project location, an inappropriate contract size, or cost estimates that do not correspond to current market rates. Restricting participation goes against competition and may cause the authority to cancel or restart the tender .
According to the statistics on the eProcurement system used in FY 2025-26, the average number of submissions per tender was 2.65.
2. Restrictive or unclear eligibility conditions
Tender documents outline key qualifications, including related technical skills and financial resources, along with other conditions for eligibility. Sometimes the conditions can be unclear or too restrictive, thereby deterring companies from participating.
For instance, the conditions of a tender call require bidders to provide evidence of prior experience in similar projects without putting a clear meaning to the term ‘similar projects’. Misunderstandings among bidders and evaluators can lead to various disputes and eventually, disqualification of the bids.
3. Unrealistic project cost estimates
The incorrect estimation of costs can influence the participation of contractors in the project. When being too low, this estimation may not encourage the contractors to produce bids that are profitable. If the cost estimation is overestimated, it may lead to questions and also to administrative alterations.
The increases of the price of raw materials, labor, transportation, and specifications of the project can make the current estimations unusable by the date the bids are called.
4. Documentation and technical compliance errors
Rejections can occur if the necessary documents are not submitted or if the technical requirements are not met by the bidders. One of the main problems that arise includes expired certificates, wrong dates in the GST, or missing experience certificates.
Although small mistakes in filling out documents can have an effect on eligibility in case the requirement is mandatory, companies still should analyze the whole tender schedule and all the relevant amendments prior to the submission of the bids.
5. Incomplete project planning
Certain governmental bodies solicit proposals before completing the necessary preparatory phases of the project. Before inviting tenders, one needs to check such elements as land availability, funding approval, technical surveys, site clearances, and operational project requirements.
If any of these elements are not verified, the organization may be forced to cancel the procurement after contractors spend time and money on preparing their proposals.
6. Administrative delays and changes in requirements
Deviations in approvals, changes in budget, modifications in project scope, or administrative decisions may interfere with procurement. Tenders may be kept in abeyance for several months before being cancelled and reissued.
In some cases, the cancellation notices mention only administrative issues, leaving tenderers unsure about the exact nature of the problem.
7. Legal disputes and inconsistent evaluation
Tender conditions can be challenged when companies believe that qualification requirements are discriminatory, unclear, or inconsistently applied.
Evaluation committees must follow the same prescribed standards for all participating companies. Differences in interpreting technical qualifications, experience requirements, or financial conditions can result in complaints, litigation, and procurement delays.
Five-Year Trends in Cancelled and Retendered Government Tenders
The NIC eProcurement (GePNIC) dashboard provides a platform-level view of tender publications, cancellations, and retendering. The following figures show cancelled tenders and the combined share of cancelled or retendered tenders relative to notices published in each financial year.
Financial year | Cancelled tenders | Cancelled or retendered |
FY2021–22 | 9.5% | 12.9% |
FY2022–23 | 12.0% | 17.1% |
FY2023–24 | 10.8% | 16.3% |
FY2024–25 | 10.1% | 15.2% |
FY2025–26 | 8.9% | 13.1% |
Source: NIC eProcurement dashboard; calculations by BidSaarthi Research, data as of 9 September 2026.
The data shows that the combined cancellation and retendering rate increased from 12.9% in FY2021–22 to 17.1% in FY2022–23. It subsequently declined over the next three financial years, reaching 13.1% in FY2025–26.
Similarly, the cancellation rate decreased from 12.0% in FY2022–23 to 8.9% in FY2025–26. This suggests an improvement in the platform-level trend following the FY2022–23 peak.
However, these figures do not establish the reasons behind individual cancellations or indicate how many bids were rejected during evaluation. The dataset covers NIC's GePNIC platform and its portal instances, not every procurement channel in India, including the Government e-Marketplace (GeM).
A tender cancelled in one financial year may also be retendered in another. Therefore, the combined percentage should be treated as a platform-level indicator rather than a count of unique failed projects.
What Do CAG Audit Reports Reveal About Tender Failures?
The reports generated by the Comptroller and Auditor General of India (CAG) showcase some cases of procurement issues which are not always evident in the cancellation statistics of a nation.
The composite audit done by the CAG of the e-procurement system of Punjab covered the duration from April 2018 to March 2023. It assessed a total of 1,85,920 tenders published in the newspapers and it reveals that about 52,046 tenders which have taken up around 28% of the total number of tenders published have been canceled.
The audit highlighted faults in planning and procedures. Some of the poor points include the request for tenders before the departments confirmed if the projects could be taken up.
For example, in one case, tenders were called off for the building of a regular police station due to the absence of land, while in another case, procurement of equipment and machines was halted due to a lack of personnel to operate them. In yet another case, a tender for putting in place a waterway and other underground pipes went unprocessed because funds were not available.
The review found as many as 28 tenders in nine departments for which no specific reasons for cancellation were recorded. As per the investigation, about ₹15.38 lakh EMD and the expense related to the tender process remain blocked, with refunds of EMD taking around five to nine months.
Also, 20 instances where changes in tender fees or EMD happened via post-bid corrigenda have been detected. In total, 20 bids have received 85 bids; calls for tenders were made before and after the mentioned changes.
These findings demonstrate how poor planning, lack of funds, and inefficient record-keeping as well as procedural flaws, can badly influence procurement processes.
Source: CAG Composite Audit Report (Civil), Punjab, Report No. 4 of 2025, Chapter II.
Rejected Bids: What Do Audit Reports Show?
Cancellation of the tender and rejection of the bid are two different situations. Cancellation means that the authority retracts the tender , whereas rejection means that a certain bid is not accepted by some specific evaluations.
The CAG's countrywide five-year rejection ratio of technical bids and financial bids is not available in the NIC dataset used for the comparison of cancellation. However, examples of the evaluation issues are available from the state-level CAG audits.
The CAG initiated an audit of the Tamil Nadu e-procurement, Report Number 4 of 2023, which examined the implementation of procurement processes that took place from FY2016-17 to 2021-22. The report was presented to the state assembly on June 29, 2024.
The audit brought to light flaws in the technical evaluation process. In one instance in past audits, the bid was accepted in an earlier tender and rejected in a different one since the certification report was not updated in time.
The report also recorded an altered document submitted by a bidder. In another procurement exercise, the Tender Scrutiny Committee rejected bidders who were later approved by the Tender Acceptance Committee without any justification.
The audit also brought to light instances of small-scale industry bidders that were eligible but denied EMD exemptions despite submission of the required documents. One of the affected tenders was canceled and later issued with modifications in the exemption clause.
These instances show that bid rejection can be due to genuine noncompliance but that evaluation being inconsistent and conditions being wrongly applied can also affect companies participating in the bidding process.
Source: CAG Performance Audit on Implementation of eProcurement System in Tamil Nadu, Report No. 4 of 2023.
Recent Examples of Cancelled Government Tenders
Recent procurement developments illustrate how tender -related problems can affect major infrastructure and public-sector projects.
Bengaluru elevated corridor projects: In October 2026, Karnataka scrapped eight tenders or packages for Bengaluru's elevated corridor projects due to defects found in the tender documents. The issues found include vague timelines for payments, inconsistent maintenance clauses, inadequate penalties for delays, and omission of arbitration clauses with no alternate dispute resolution mechanism provided. The project involves 11 elevated corridors of around 75.6 km with an estimated cost of ₹13,262.70 crores. Thereafter, tenders for the six projects were invited.
Ceigall's Ludhiana urban street projects: Ceigall Infra Projects Private Limited, a wholly owned subsidiary of Ceigall India, disclosed in March 2026 that the Punjab Infrastructure Development Board has canceled two urban street construction projects in Ludhiana due to administrative issues. The projects were awarded to Ceigall Infra Projects Private Limited as they submitted the lowest bid to complete the projects, which were worth around ₹207 crore.
Paradip Port Authority tender : In October 2026, a bid for operational support regarding hydrographic surveys was called off. The tender history showed that two proposals went through pre-qualification and technical stages prior to cancellation. Administrative issues were mentioned, without explaining the reason in more detail.
These cases illustrate that cancellation should not be interpreted as being due to poor performance by bidders. When analyzing a procurement case, procurement documents, administrative decisions, as well as the ‘readiness’ of the project should be examined.
Common Mistakes Bidders Should Avoid
Companies can reduce avoidable bid rejections by introducing a structured tender -review process.
Important checks include:
Eligibility: Verify turnover, experience, technical qualifications, and registration requirements.
Documentation: Ensure GST details, certificates, financial statements, and company registrations are valid.
EMD compliance: Check the required amount, payment method, exemptions, and submission deadlines.
Technical specifications: Confirm that all prescribed technical requirements are addressed.
BoQ accuracy: Use the prescribed format and check all quoted prices and calculations.
Corrigenda: Monitor amendments and pre-bid clarifications and follow the latest tender conditions.
Submission deadlines: Allow sufficient time for document verification and portal submission.
A final review before submission can help companies identify missing documents, inconsistencies, and technical errors.
How Can Government Tender Failures Be Reduced?
In order to enhance procurement results, collaboration between the relevant authorities and bidders is necessary. First of all, it is crucial that the governmental bodies make the plans for the project, confirm the availability of resources and land, prepare the estimates, and publish the requirements for the bidders. It is also vital for the conditions of the contract to be thoroughly assessed prior to the announcement of a tender .
At the same time, committees in charge of the evaluation need to adhere to the requirements of the qualification documentation no matter what and have sufficient evidence of any rejected applications. Moreover, it is important for authorities to disclose all necessary information about amendments and make refunds of the EMD in a timely.
Conversely, companies should have all the documents necessary for conformity, assessment of the tender conditions, and the internal system of checking their bids. It is also crucial for companies to study the information about the tenders that have already been announced previously.
Conclusion
To improve procurement outcomes, all parties involved and bidding organizations must cooperate. First, state authorities must formulate all necessary project plans, confirm the availability of resources and land, make estimates, and announce requirements to bidders. It is also important for the conditions of the contract to be assessed in detail before the announcement of the tender .
At the same time, commissions responsible for evaluation must respect requirements stated in qualification documents and produce valid proof for each unsuccessful application. Additionally, authorities must disclose all necessary information regarding any changes made and refund the EMD in due time.
On the other hand, companies must obtain all documents needed for compliance, evaluation of the contract requirements, and internal control of the submitted proposal.
