The Swiss challenge model means a method of public procurement in which an unsolicited proposal is received by a public authority for a project that predominantly involves uniqueness and specificity of design, technology and intellectual property rights. The government then examines the proposal and if the proposal belongs to the declared policy of priorities, then it may invite competing counter proposals from third parties. In the event of a better proposal being received, the original proponent is given the opportunity to modify the original proposal. Finally, the proponent with the best plan is awarded the contract.
In a 2009 ruling, the Supreme Court had approved the Swiss Challenge method for award of contracts. Further, respective state governments were encouraged to draft guidelines for procurement using the Swiss Challenge method. For example, Maharashtra and Karnataka have adopted their own policy guidelines.
Advantages of Swiss Challenge Model

• Promotes competition: It allows the project to be put for competitive bidding and counter- bidding so as to realize the optimum cost.
• Enhances efficiency: It provides time and cost saving on pre project activities and feasibility studies for the public authority vis-à-vis other Public Private Partnership (PPP) models.
• Professionalism: With proper identification of timelines, risks and their allocation, it becomes easier for the public authority as the project preparation is done in a more professional manner and in turn reducing red-tapism.
• Creativity: Since this model allows the prospective bidders to analyse the design submitted by their competitors and come out with better design, it promotes creative designing and project execution.
• Equitability: Useful for the governments that have limited technical and financial capacity to develop projects.

Problems associated with Swiss Challenge Model

• Issue of Transparency: The biggest concerns are the lack of sufficient transparency and inadequate competition, while dealing with unsolicited proposals and thus it becomes difficult to fix accountability.
• Crony capitalism: This method could breed crony capitalism by allowing companies to employ dubious means to bag projects.
• Bidding asymmetry: There is asymmetry in bidding time given to bidders to prepare counter proposals in relation to time taken by originator for preparation.
• Issue of legal validity: There are no adequate regulatory and legal frameworks. Further, there is a problem of proper legal validity of using this method when a counter proposal contains different specifications than the original proposal.
• Difficult to measure the monetary value: It is very difficult to measure monetary value of an unsolicited proposal when a contract or project is not given to the original proponent.

However, these issues can be addressed by instituting a national policy framework for the Swiss Challenge method. There should be wider participation and greater flexibility to promote innovation at the pre-proposal stage and sufficient time for counter-bidders to respond at the post-proposal stage.