Guidelines for Members in Practice on responding to Tenders
ICAI Issues Guidelines for Members in Practice on Responding to Tenders for Professional Services
The Institute of Chartered Accountants of India (ICAI), exercising its powers under Section 15(2)(fa) of the Chartered Accountants Act, 1949, has issued new guidelines governing how members in practice may participate in tenders floated by various organisations for professional services. The guidelines take effect immediately.
The primary objective is to promote fair professional remuneration, discourage unrealistically low fee quotations and ensure that fees are commensurate with the scope and requirements of the assignment.
1. Minimum Fee Requirement for Certain Tenders
Members in practice are prohibited from responding to tenders for professional services that are exclusively reserved for Chartered Accountants under any statute if the tender document does not specify a minimum fee.
Where a tender prescribes a minimum fee for such services, members may participate, provided their quoted fee is not lower than the minimum amount specified in the tender document.
2. Prohibition on Unreasonably Low Fee Quotations
Regardless of whether the assignment falls within services exclusively reserved for Chartered Accountants, members must ensure that their quoted professional fees are not unreasonably low.
The fee should be appropriate to the nature and requirements of the assignment, taking into account factors such as:
- Size and value of the assignment.
- Volume and complexity of work involved.
- Manpower and other resources required.
- Overall nature and scope of the professional engagement.
3. Mandatory Maintenance of Cost Sheets
Members responding to tenders must maintain a cost sheet for each bid submitted.
The cost sheet should contain details of the estimated expenditure associated with the assignment, including the number of personnel involved, estimated working hours and other relevant cost considerations.
ICAI reserves the right to call upon members to produce these records in relation to any tender bid submitted by them.
4. Clarifications and Exceptions
The guidelines provide the following important clarifications:
A. Meaning of Minimum Fee
The expression “Minimum Fee” includes any amount described in the tender as an estimated fee, professional fee, average fee or by any other similar designation.
B. Services Not Exclusively Reserved for Chartered Accountants
Members may participate in tenders for services that are not exclusively reserved for Chartered Accountants under any statute, regardless of:
- Whether the tender specifies a minimum fee.
- Whether participation is restricted to Chartered Accountants.
C. Quotations Invited Through Individual Letters
The guidelines do not apply where quotations are invited from practising members or firms through individual letters.
D. Reverse Bidding
Members are not permitted to participate in reverse bidding where the bidding process requires them to quote fees below the minimum fee prescribed in the tender.
5. Relationship with Earlier ICAI Guidelines
These guidelines are to be read together with ICAI Guideline No. 1-CA(7)/03/2016 dated 7 April 2016. Members should consider both the earlier guidelines and the new provisions when evaluating their eligibility to participate in tender processes.
Practical Implications for Chartered Accountants
The new guidelines require members in practice to exercise greater care before submitting professional fee quotations in response to tenders.
Before participating, members should:
- Determine whether the services are exclusively reserved for Chartered Accountants under the applicable statute.
- Verify whether the tender prescribes a minimum or estimated professional fee.
- Ensure that the quoted fee complies with the applicable minimum fee requirement.
- Assess whether the proposed fee is reasonable in view of the scope, complexity, time and manpower involved.
- Prepare and retain a detailed cost sheet supporting the fee quotation.
- Avoid reverse bidding that would reduce the fee below the prescribed minimum.
Conclusion
ICAI’s guidelines reinforce the importance of reasonable professional remuneration and responsible participation in tender processes. Members in practice should review the terms of each tender carefully, assess the cost of delivering the assignment and maintain adequate documentation supporting their fee quotations.
Source: Guidelines on Tenders issued by the Institute of Chartered Accountants of India (ICAI), dated 12 October 2026.
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