e-procurement project fizzles out

Bhanu P Lohumi

Tribune News Service

Shimla, April 23

e-procurement, a part of “Mission Mode” project of the Government of India on e-governance introduced in June 2011 by the state government to ensure transparency, has failed to achieve the desired results.

Only 26 out of 90 organisations partially implemented it and even in the e-tendering module, crucial activities such as negotiation and award of the contract were being done manually.

The performance audit of the conception and implementation of the project done by the Comptroller General of India (CAG) to assess the effectiveness during March 2017 to June 2017 revealed that 26 organisations had published 18,678 tenders valuing Rs 11,052.80 crore during 2011-17, out of which 13,315 tenders valuing Rs 8,546.92 crore were opened.

“A total expenditure of Rs 20,441.38 crore was incurred on the procurement of goods, services and works in government departments and against this 7,957 tenders valuing Rs 6,183.86 crore were processed through the e-procurement project in eight departments which constitutes 30 per cent of the total procurement,” CAG pointed out.

As many as 64 out of 90 organisations had not implemented e-procurement even after the lapse of six years, while the Himachal Pradesh State Industrial Development Corporation (HPSIDC) opted out of the e-procurement portal (provided free of cost) after using it for four years and switched to a software developed by a private firm in April 2015, incurring avoidable expenditure of Rs 21.90 lakh. One-time payment of Rs 11.50 lakh and recurring expenditure of Rs 10.40 lakh at a rate of Rs 40,000 per month for 26 months from May 2015 to June 2017 was incurred.

Business rules were not mapped in the application software and the time cycle in the processing of tenders through e-procurement could not be reduced due to non-revision of tendering rules and time taken in processing of tenders during ranged between 122 and 554 days.

The threshold limit of Rs 10 lakh fixed by the state government for e-tendering was not adhered to in 78 cases by four out of seven sampled organisations and the tenders above Rs 10 lakh were floated manually. Even the Department of Information Technology (DIT), which is the nodal department floated six tenders manually, above the threshold limit of Rs 10 lakh during 2011-17.

CAG also pointed out splitting up of work leading to circumvention of e-tendering to avoid the prescribed threshold limit of Rs 10 lakh for the same. Special repair and maintenance of toilet of Udyog Bhawan, Shimla, was approved (December 2015) for Rs 16.27 lakh and the tenders were invited by reducing the estimated cost to Rs 9.06 lakh. The work items were further split up into 10 parts keeping the amount below Rs 1 lakh. It was further noticed that two to three bidders had participated in all 10 work tenders and the works were awarded to the single contractor.

The audit noticed that in six out of seven selected organisations, negotiations were held with the lowest bidders in 115 cases out of 240 test-checked tenders without any reasons recorded by these organisations in contravention of the guidelines of the Central Vigilance Commission, which provided that there should not be any negotiation.