Odisha Rules for Hiring Consultants, PMUs, and TSUs
Based on: Finance Department Office Memorandum No. 21602/F (PT1-FIN-COD-MISC-0009-2019) dated 17.08.2024
Your department or directorate is planning to hire an external Project Management Unit (PMU), Technical Support Unit (TSU), or subject consultants for a project. Before you initiate procurement or draft the terms of reference, the proposal must strictly comply with the state framework regulating external manpower. The Finance Department has placed strict caps on tenures, mandatory government employee shadowing, and administrative oversight to curb open-ended consultancy contracts.
The short answer
External consultants, PMUs, and TSUs can only be engaged for a maximum finite period of 5 years with a mandatory sunset clause. They cannot be placed against regular sanctioned posts or handle sovereign government functions. Every engagement requires a mandatory minimum pairing of regular government employees (such as ASOs, SOs, or Under Secretaries) to ensure institutional learning, and individual consultants must be replaced after 5 consecutive years.
What the rule actually says
The framework notified in Finance Department Office Memorandum No. 21602/F dated 17.08.2024 regulates external engagements under Chapter VI of the Odisha General Financial Rules (OGFR), 2023, read with Rule 12 of the Delegation of Financial Powers Rules (DFPR), 1978:
"Every contract for engagement of external consultants, PMUs, TSUs, or similar entities shall invariably contain a sunset clause prescribing a finite duration of engagement, not exceeding five years. Continuation beyond the stipulated period shall not be permitted."
"Engagement of external consultants, PMUs, TSUs, and similar entities shall not result in the creation of any new Government posts. Further, such personnel shall not be engaged against any existing sanctioned regular posts or be assigned functions that are required to be performed by regular Government employees."
How it works in practice
1. Mandatory In-House Staffing Norms
To prevent permanent reliance on vendors and build departmental capacity, regular government personnel must be deployed alongside external consultants from day one:
| Number of External Consultants Engaged | Minimum Number of In-House Personnel Required |
|---|---|
| Up to 5 | 2 |
| More than 5 and up to 10 | 4 |
| More than 10 and up to 15 | 6 |
These in-house officers—typically Assistant Section Officers (ASOs), Section Officers (SOs), Under Secretaries, or equivalent—must be deployed exclusively to the unit and relieved of routine branch work. They report directly to the unit head, and their ACR/PAR is initiated by the designated supervising officer, with the Head of Office acting as the accepting authority.
2. Supervisory and Review Hierarchy
- Department Level: Must function under the direct supervision of an officer not below the rank of Special Secretary, Additional Secretary, or Joint Secretary.
- District / Sub-District Level: Directly supervised by the ADM, District-level Officer, Sub-Collector, SDM, BDO, or Block-Level Officer.
- Review Cycles: The supervisory officer must conduct a monthly review against deliverables. The Departmental Secretary must conduct a formal quarterly review. The Secretary must also execute a compliance verification immediately upon engagement to confirm in-house staff deployment.
3. Approved Departmental Ceilings
Annexure-A of the memorandum sets the maximum external resource strength permitted for specific departments:
| Sl. No. | Name of the Department | Approved Resource Count |
|---|---|---|
| 1 | Commerce & Transport Department | 10 |
| 2 | Health & Family Welfare Department | 77 |
| 3 | Works Department | 5 |
| 4 | Food Supplies & Consumer Welfare Department | 2 |
| 5 | GA & PG Department (Vigilance Organization) | 37 |
| 6 | Planning & Convergence Department | 20 |
| 7 | Skill Development & Technical Education Department | 20 |
| 8 | Sports & Youth Services Department | 5 |
| 9 | Energy Department | 5 |
| 10 | Tourism Department | 14 |
| 11 | Revenue & Disaster Management Department | 5 |
| 12 | Steel & Mines Department | 2 |
Where people get this wrong
- Treating individual consultants as permanent fixtures: An individual consultant cannot be retained continuously beyond 5 consecutive years. Once 5 years are complete, the individual must be replaced and cannot be engaged in the same assignment or department.
- Billing by named individuals: Contracts must link payments to verified deliverables, person-days, or person-hours rather than billing for specific named persons.
- Using PMUs for regular clerical and administrative files: PMU personnel cannot handle regular office files or perform sovereign duties reserved for permanent establishment staff. If the work is recurring and permanent, the Administrative Department must move a formal proposal to the Finance Department for regular post creation.
- Applying these rules to Legal Cells: Legal consultants engaged under the Law Department SOP dated 10.06.2024 are excluded from these guidelines and continue under their own specific rules with case-by-case Finance Department concurrence.
When framing terms of reference or floating RFPs for external support, ensure the 5-year sunset clause, staffing ratios, and supervisory hierarchy are incorporated into the tender documents. Files submitted without compliance verification of in-house shadow staffing will not be cleared by the Finance Department.
Frequently asked questions
What is the maximum period an external PMU or consultant contract can run in Odisha?
Every contract must contain a sunset clause prescribing a finite duration not exceeding 5 years. Continuation beyond 5 years is strictly prohibited.
Can an individual consultant continue working in the same department after 5 years?
No. No individual consultant can be engaged continuously for more than 5 consecutive years. Upon completion of 5 years, the consultant must be replaced and cannot be retained in the same assignment or department.
How many regular government employees must be deployed with an external PMU?
Departments must deploy at least 2 in-house staff for up to 5 consultants, 4 staff for 6 to 10 consultants, and 6 staff for 11 to 15 consultants.
Are legal consultants covered under these PMU guidelines?
No. Legal consultants engaged under the Law Department SOP dated 10.06.2024 are excluded from these guidelines and continue to be governed by their specific SOP.