Similar Works, Turnover and Bid Capacity in Tenders

By Khanal Group · Tenders and bids · Updated 25 October 2026 · Not legal or tax advice

The three tests

Qualification criteria in Indian works tenders are built around three questions:

Experience: have you completed similar works of a minimum size?
Financial strength: is your turnover, and sometimes your net worth or liquid assets, large enough for this job?
Capacity: after the work you already have, can you take this one on?

The model wording for central works is in the Department of Expenditure's Manual for Procurement of Works (Second Edition, 2025), para 3.9. The Manual calls its criteria illustrative: departments such as CPWD, railways and PSUs adapt them, so the numbers in your tender may differ. The tender always governs. This guide explains the Manual's version and the arithmetic behind it.

Similar works: 40%, 50% or 80%

The Manual says the applicant should have completed or substantially completed similar works during the last seven years, ending on the last day of the month before the one in which applications are invited, in any one of these ways:

Option	Number of works	Each costing at least
1	Three similar completed works	40% of the estimated cost
2	Two similar completed works	50% of the estimated cost
3	One similar completed work	80% of the estimated cost

Meeting any one option is enough. Some departmental tenders use other tiers, for example 40%, 60% and 80%, or shorter look-back periods, so read the figures in each NIT.

What counts as similar

The Manual says similarity should be defined in advance by physical size, complexity, methods or technology and scope, and that public authorities should keep the experience criteria broad enough for bidders from different sectors. The tender's definition of "similar work" is the one that matters: "construction of RCC framed building", for instance, may or may not include a factory shed. If the definition is unclear, ask in the pre-bid queries.

Substantially completed works

An ongoing work counts only if at least 90% of its present contract value has been paid, the work or a major part of it is usable for its purpose, and no termination proceedings for the contractor's default are pending. The Engineer-in-Charge or employer issues a two-part certificate (financial value as a percentage of the contract, and functional completion), which must have been issued within sixty days before the tender was invited.

Joint ventures and subcontracts

For work done as a JV member or subcontractor, only your share by value counts.

Bringing past values to current cost

A work completed five years ago looks smaller than it was. The Manual says the value of work executed is brought to current costing level by enhancing it at a simple rate of 7% per annum, calculated from the date of completion to the date of bid opening:

Updated value = actual value × (1 + 0.07 × years from completion to bid opening)

Use the exact period in years and days unless the tender says otherwise, and check whether it uses the date of bid opening or the last date of submission.

Turnover and financial capability

The Manual includes two turnover tests and a liquidity test:

Average annual financial turnover during the last three years ending 31 March of the previous financial year should be at least 30% of the estimated cost.
Annual construction turnover in pre-qualification: a minimum annual value of construction work, at least half of it from engineering construction relevant to the work, achieved in any year over a stated period (normally five to seven years), worked out by applying a multiplier of 2 (not less than 1.5 for very large contracts) to the projected annual expenditure on the contract.
Liquid assets and sources of finance sufficient for the contract's cash flow, and financial soundness shown by audited statements.

Turnover is usually proved by a chartered accountant's certificate or audited accounts. Check whether the tender wants turnover from construction only, and whether it is updated to current prices; the Manual's financial turnover test does not mention updating.

Bidding capacity

The Manual's formula is:

Available bid capacity = A × M × N − B

A = maximum value of engineering works executed in any one year during the last five years, updated to current prices, counting completed works and works in progress.
M = multiplier, usually 1.5.
N = number of years prescribed for completing the work in question.
B = value, at current prices, of existing commitments and ongoing works to be completed in the next N years.

Your available capacity must be at least the estimated cost of the work. Some tenders use a different multiplier, or count A over seven years; use the multiplier and period in your tender.

Worked example

Illustrative figures. ABC Infra Private Limited is bidding for a work with an estimated cost of ₹10,00,00,000 and completion period of 18 months (N = 1.5). Bid opening is on 25 October 2026.

Similar works

Thresholds: 40% = ₹4,00,00,000; 50% = ₹5,00,00,000; 80% = ₹8,00,00,000. The firm's similar works:

Work	Value	Years since completion	Factor (1 + 0.07 × years)	Updated value
Work 1	₹3,50,00,000	3	1.21	₹4,23,50,000
Work 2	₹3,80,00,000	2	1.14	₹4,33,20,000
Work 3	₹4,10,00,000	1	1.07	₹4,38,70,000

None of the works reaches 40% at its original value, but after updating all three exceed ₹4,00,00,000, so option 1 (three works of 40%) is met. Option 2 fails because no work reaches ₹5,00,00,000.

Turnover

Turnover for the last three years: ₹9 crore, ₹11 crore and ₹12 crore. Average = ₹10.67 crore, against a requirement of 30% × ₹10 crore = ₹3 crore. Met.

Bid capacity

A = ₹12 crore (best year, updated), M = 1.5, N = 1.5, B = ₹15 crore of work in hand due in the next 18 months.

A × M × N − B = 12 × 1.5 × 1.5 − 15 = 27 − 15 = ₹12 crore, which is more than the ₹10 crore estimated cost. Met. With ₹18 crore in hand, capacity would be ₹9 crore and the firm would fail this test despite its experience.

The tender eligibility calculator runs all three tests for your own figures.

Common mistakes

Counting a work whose certificate does not show value, completion date or scope in the form the tender asks for.
Updating from the date of the work order instead of the date of completion.
Counting the whole value of a JV or subcontracted work instead of your share.
Leaving out ongoing works from B, or using values not brought to current prices.
Assuming the Manual's numbers apply when the tender sets its own.

Checklist

Tender's definition of similar work and its tiers copied into your notes.
Look-back period worked out from the right month.
Each work: value, completion date, your share, and certificate in the required form.
Updated values at 7% simple per annum (or the tender's rate) to the right date.
Turnover certificate for the exact years the tender names.
Bid capacity worked out with the tender's formula, and a list of works in hand for B.
JV split agreed in writing if you bid as a JV.

K-Tender keeps a library of completed works with their completion certificates, has a finder for the usual 80%, 50% and 40% similar-work tests, and compares your turnover and similar-work values with the tender's thresholds in an eligibility matrix. A shortfall is flagged, and only a reviewer can mark a criterion met.

Common questions

What does three works of 40%, two of 50% or one of 80% mean?

You qualify if you have completed any one of: three similar works each costing at least 40% of the estimated cost, two each costing at least 50%, or one costing at least 80%. The Manual for Procurement of Works (2025) counts works completed in the last seven years ending on the last day of the month before the one in which applications are invited.

How are old work values brought to current cost?

The Works Manual says the value of work executed is enhanced at a simple rate of 7% per annum from the date of completion to the date of bid opening. A ₹3 crore work completed two years before bid opening counts as ₹3 crore × 1.14 = ₹3.42 crore.

Does an ongoing work count as a similar work?

Only if it is substantially completed in the Manual's sense: payment of at least 90% of the current contract value, the work or a major part of it usable, no termination proceedings pending, and a two-part certificate issued within 60 days before the tender was invited.

What is the bidding capacity formula?

The Works Manual gives available bid capacity = A × M × N − B, where A is the maximum value of works executed in any one year in the last five years at current prices, M is a multiplier usually 1.5, N is the completion period in years, and B is the value of existing commitments due in the next N years. Tenders may use a different multiplier.

Can a joint venture combine its partners' experience?

For the criteria the tender says are met collectively, yes. The Works Manual lets the lead partner meet at least 50% and other partners at least 25% of the individual limits for some factors. For past work done as a JV member or subcontractor, only your share by value counts.

Similar works, turnover and bidding capacity in works tenders