Description in English
System Improvement
1. During a complaint investigation, it was found that a works tender was processed in which certain conditions were indicated and the tenderers were asked to submit certain documents along with their offers. One of these documents was “Notarized Affidavit” stating that all their documents submitted along with bids are true and factual and the same should be mandatorily self-attested. In response, 02 offers were received but the tender was discharged as all requisite documents were not submitted by both tenderers.
In meanwhile, Para-6.1 of General Condition of Contract (GCC) was modified in July’20. As per this modification, the tenderers were asked to submit a simple “Certificate” instead of “Notarized Affidavit”. Accordingly,the tender was re-invited incorporating this modification in the tender documents. In response, again 02 offers were received in which L-1 tenderer could not comply the eligibility criteria and L-2 offer was found suitable. As per estimated value and rate received in L-1 offer, this was a direct acceptance case of JAG officer. However, as the L-1 offer was not suitable, the Tender Accepting Authority (TAA) referred the tender to Sr. Scale TC for its finalization. The TC also found L-1 offer not fulfilling eligibility criteria and L-2 offer fulfilling the same, and recommended for its acceptance. The TAA accepted the same and work was awarded to L-2 firm.
The TAA, while referring the case to TC, had mentioned that L-1 firm had not submitted some documents including Notarized Affidavit/Self-attestation. But as per revised GCC Para-6.1, Notarized Affidavit was no longer required. This indicates that the TAA missed this vital point while examining the offers. The TC also deliberated the offers in similar line as done by the TAA. Incidentally, as the L-1 firm had not submitted other documents also, its offer had not fulfilled the eligibility criteria and therefore, the mistake committed did not affect the final outcome. This was a very casual way of deliberation of the offers by the TC and TAA. During Preventive Checks and Complaints Investigation, many a time some casual deliberation of offers by TC/TAA have been observed in which even tenders were wrongly finalized.
In view of above, as a System Improvement,it is brought to notice of all officials dealing with tender cases that every aspect in the tender is very important and the same needs to be examined / deliberated with utmost attention at all stages of tender finalization. By this, it is expected that not only tenders would be decided correctly, it would help the tender dealing officials from committing any unintended mistake.
2. A preventive check was done in area of procurement of loco materials, its accountal and utilization for loco production. Battery is an important and costly loco item and the same is procured in terms of loco set. During the check, it was found that 01 loco set battery, being procured, contains 78 cells, 50 litre electrolyte and other accessories. Further, the accessories consist of 03 different type of cable connectors, M10 insulated socket spanner with handle, vent caps & its locking tools, plastic filling bottle, hydrometer, thermometer, digital multimeter, goggle, rubber gloves, apron PVC, etc. – total 21 items. Except cable connectors, all other accessories are being procured 01 no. each with each loco set of battery. These materials are being procured and posted in the Bin Card.
On checking the issue of the battery and its accessories, it was found that only 20 litre out of procured quantity of 50 litre of electrolyte was being collected by the concerned shop for topping up of the battery. Thus, only 40% electrolyte was required and balance 60% was becoming excess. Further, among 03 cable connectors, 01 connector is 11m length and the same is not required though it is being procured as part of accessories. This connector is being cut into pieces for its disposal and being sent to GSD as scrap. Among the other accessories, majority of them are not required 01 no. each with each loco set battery rather 01 no. each per 10 loco set of battery is sufficient enough as indicated by concerned SSE. As such, accessories are also being procured in excess resulting into wasteful expenditure.
The cost of excess materials such as connector, electrolyte and other accessories has been assessed and amount comes to Rs.7000/- per loco set of material. Considering the annual production of 400 locomotives,cost of excess accessories being procured comes to Rs.28 lakh approx. This is quite a substantive amount and is totally avoidable. For avoiding such wasteful expenditure, the following System Improvement has been suggested:
“Loco battery is one of the important loco items being procured as per specification. It contains electric cells, electrolyte and certain specified accessories. But full electrolyte and accessories are not being used rendering in excess. As such, requirement of electrolyte and accessories needs to be reviewed critically so that only required quantity is procured. A similar exercise may be done for other materials also which are being procured in sets but comprising many sub-components, and all of them may not be used for loco production. This will not only result in avoiding the wasteful expenditure but financial savings so achieved could be put to other areas for gainful purpose.”
3. On investigation of a complaint against procurement of a loco item through developmental tender with the aim of developing additional sources, it was noted that a proposal for processing of this tender was initiated in June’19. After FC and approval of the competent authority in Nov’19, the tender was opened on 28.02.20. One of the eligibility criteria was that firmshaving proven credential of this item for rolling stock application would be considered for developmental order. Total 10 offers were received and 09 offers were considered technically unsuitable as these firms had not enclosed proven credential of this item with their offers. The 10thoffer was from approved source, and as such sources were not permitted as per eligibility criteria. Therefore, the tender was discharged on 29.05.20 due to non-availability of any suitable offer.
The proposal dated 14.07.20 was initiated for review of the eligibility criteria.The modified criteria were approved on 05.01.21 asking unapproved firms to furnish, inter alia, credential for similar items to substantiate their capacity to develop intended item and also indicate timeline for development of the Prototype. Then only the tenderer would be considered for developmental order. Thetender was again opened on 14.07.21 in which 12 offers were received and only 09 offers were found technically suitable. While finalizing the tender, the TC took a lenient view mentioning that timeline aspect would not be considered. The TC considered 03 out of total09 suitable offers for developmental orders considering the rate aspect and firms’capability assessment in progress since Sep’21. However, as rate of 03 more firms were nearer to acceptable rate, these firms should also have been considered as purpose of developmental tender was to enlarge the vendor base.
In the developmental tender, asking new firms to submit proven credential for the item they are going to develop first time was totally incongruous. In the modified eligibility criteria, asking firms for credential of similar item without indicating name of such items is also improper. Even in the works contract, name of the similar works are indicated against the technical criteria to assess the firm’s technical capability. Further, no terminal timeline was indicated in the modified criteria but firms were asked to furnish the same. While finalizing the tender, the TC took a lenient view and did not consider the timeline aspect. This is also irregular. Further, there is no justification for considering only 03 firms for developmental orders when rate of 03 more firms were nearer to that of the firms who were considered for developmental orders. This indicates that due cares were not followed while formulating the eligibility criteria. As a result, railways has lost precious time of more than 18 months. It is further noted that 15 more developmental tenders were discharged due to faulty eligibility criteria.
Considering the various lacunae/irregularitiesas mentioned above, as a system improvement, it is suggested that eligibility criteria need to be decided with due care be it for a developmental tender or any other tenders. Further, the tender should also be finalized carefully considering the eligibility criteria as given in the tender.
