The lowest bid almost always becomes the most expensive contract. Here's the arithmetic nobody shows you.
Housekeeping
The lowest bid almost always becomes the most expensive contract. Here's the arithmetic nobody shows you.
A housekeeping tender in Delhi NCR often closes 18-22% below the realistic cost of compliant delivery. The winning bidder is not more efficient. They have simply decided which legal obligation to skip. The arithmetic is unforgiving. Minimum wage for unskilled workers in Delhi, plus PF at 13%, ESIC at 3.25%, bonus, leave encashment and gratuity provisioning, establishes a floor below which compliant delivery is arithmetically impossible. Add supervision, consumables, machinery depreciation and a reasonable margin, and the floor rises further. When a bid lands below that floor, something is being omitted. Usually it is PF and ESIC contributions, which creates principal-employer liability that lands on the client, not the contractor. Sometimes it is headcount, where 40 workers are billed and 31 deployed. Occasionally it is wages themselves, paid below minimum with signed receipts for the full amount. The costs surface eighteen months later as labour department notices, back-contribution demands with interest, and reputational exposure. Several large corporate parks in NCR have discovered this the hard way. Responsible procurement sets a technical floor before opening commercials, verifies challans quarterly, and treats an improbably low bid as a disqualification rather than a discount.
Varsed Group provides integrated facility management, housekeeping and security services to corporates, institutions and societies across Gurgaon, Delhi NCR and pan-India.
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