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Showing posts with label Tender. Show all posts
Showing posts with label Tender. Show all posts

11 Common Serious Mistakes in Tender

11 Common Serious Mistakes in Tender

e-Tendering in Government
In earlier article Dr. Lalit Kumar explained how to open, evaluate, and award a tender. 
Further, he has written this article, we thanks him for giving such good write-up for publication.
The procurement of goods and services is generally noticed as an area of financial irregularities and embezzlement. Keeping in view, the Government launched Government e-Marketplace (GeM) for ensuring transparency and making officers directly accountable. The e-Procurement portal is also launched to ensure the proper procedure of the tendering. In this article, we will go through the common mistakes usually committed during the procurement. The award of tender is a lengthy process and requires sincerity at each level:

(i) Availability of sanctions:

The tender process comprises two rounds, technical round and financial round. For both rounds, the technical and financial sanction of competent authority is required. Whatever terms and conditions are provided in the tender document, required to be approved by the Competent Authority. It is required to get approvals otherwise it will be a mistake and audit objection can be raised.

(ii) Adequate Publicity:

The procuring authorities required to ensure the competition among the bidders and for this purpose, adequate and wide publicity is required. Advertisement is posted on website and tender documents are uploaded on e-procurement portal. It is required to ensure the adequate publicity otherwise it will be treated as serious mistake audit objection can easily be raised.

(iii) Enough Time for each step of Tender:

The tender is lengthy process and accordingly, the enough time should be provided for receiving the bids, opening tender after receiving of bids, addressing the bidders and inviting time to be present during the award of tender etc. In case, there is not enough time for any particular step, all process will seam biased and audit objection can easily be raised for the mistake.

(iv) Establishment of Panel in Limited Tender:

Generally, limited tender is preferred to avoid the delay in procurement of goods and services. In such circumstances, a panel is established for enrolment of vendors, contractors, and service providers. The terms and conditions for enrolment should be transparent and clearly explained on the website. The eligibility criteria should not be biased and the panel should be updated at regular intervals keeping in view the enrolment of new vendors. In case, panel is not established and updated at regular interval, it will be treated as serious mistake because it will restrict the competition in procurement.

(v) No Deviation in Criteria during Evaluating Bids:

The tender document contains the criteria on which basis the bids are evaluated. The criteria are conveyed to all bidders through the tender document and during the evaluation of technical and financial bids, the criteria should be adopted strictly as provided in the tender document. There should be no deviation in the criteria so that the bidders feel comfortable with the award of tender to the successful bidder. In case, there is deviation in criteria then the whole process is held biased and the unsatisfied bidders can move to the Central Vigilance Commission (CVC). The CVC considers it a serious mistake in Tender.

(vi) Verification of Certificates:

The committee should verify the certificates of the bidders during the technical evaluation of bids. Most of the time, it is found that the certificates submitted by the bidders are bogus and in such circumstances, the procurement is required to be revised from new start-up level. Therefore, the certificates including experience certificate of bidders should be verified seriously. Due to this mistake, most of the tender are cancelled by the court and CVC.

(vii) Opening Tender in presence of Bidders:

The bidders move to the court for justice only if they are not satisfied from the process of awarding tender. Therefore, the provision of ensuring presence of bidders or their authorised representatives is must during the evaluation of tenders. The tenders should be opened in the presence of bidders or their authorised representatives. The CVC guidelines strictly suggest to ensure it. This mistake can be harmful to the whole tender process.

(viii) Numbering and Attestation of pages in Tender:

The price bids submitted by the bidders should be numbered properly and during opening of the tender, the corrections / omissions / additions etc. should be numbered and attested by the committee members. Tender opening register should be maintained. The common mistakes comprise non-numbering of the corrections and after completion of process, the corrections seem suspicious.

(ix) No Change in Bids after opening Tender:

The bidders should not be allowed to change any document, certificate, or condition in the submitted envelopes which may lead to financial implications.
The mistake of allowing change can be a suffering to the whole process of tender.

(x) Justification if Tender is not award to Lowest-1:

The tender is required to be awarded only to the lowest-1 bidder that is the bidder quoted lowest bid for providing goods and services. Only in exceptional cases, it can be awarded to another bidder. In case, it is done, the exceptional conditions should be explained properly. Such circumstances may be ‘procurement of proprietary items’, ‘items with limited sources of supply’, and ‘where there is suspicion of formulation of cartel.

(xi) Details of Negotiations (if any):

The justification of awarding tender and in case of negotiation at the time of award of tender should be noted down with recording the facts. There should be no delay in recording such facts. The mistake of not recording facts can become harmful for the procuring authorities at later stage.
Copyright © 2019 Dr. Lalit Kumar. All rights reserved. 

Tender and Central Vigilance Commission

Tender and Central Vigilance Commission

The managerial administration deal the issues relating to proper procurement of goods and services. The public sector organizations have strong governance mechanism to deal with issues of corruption. Before the year 2000, every file of public sector organizations was considered as confidential secret document and at that time, it was very difficult to detect the financial irregularities. 
The committee on prevention of corruption recommended to set up Central Vigilance Commission (CVC) in 1964 and in 2003, the bill passed in Paliament and ‘the Central Vigilance Commission Act’ is enacted. The CVC inquires and investigates the cases of corruption. As per financial rules of Government, the procurement of goods is required to be justified on three parameters directly related to prudent use of public money i.e. (i) Economy, (ii) Efficiency, (iii) Effectiveness. These three parameters are known as 3 Es for the authorities to be look into, before taking decision to use the public money.

Why use Tender in procurement?

The first and most important cause of using tender system for procurement is ‘ensuring transparency and efficiency in procurement’. A tender provides equal and fair treatment to vendors and service providers. It promotes the competition and the chances of getting goods at lowest prices increased. The tender process is very difficult to be cracked by the corrupt people. The tender in itself is designed particularly to ensure no room for corruption. There are a lot of guidelines issued by the Central Vigilance Commission to carry out procurement related activities properly.  

Precautions before proceeding to award Tender:

The tender process is required to be followed strictly in order and a single mistake can lead to financial irregularities. There are a lot of tenders in which the competent authorities face the litigation from the suppliers’ side and sometimes auditors point out the irregularities. Before proceeding to award a tender, the procurement authorities should reflect the following upon file with a justification pointing out true and fair position of the authorities:
(i)  Specifications in terms of quality and quantity should be justified.
(ii) Procurement of excess quantity of goods should always be avoided.
(iii) The tender procedure should be notified to the committee constituted to supervise and implement the tender system. The procedure should be fair and transparent, in other words, full-proof in awarding tender to a good vendor.
(iv) Procurement of goods should only be done as per the actual requirements of the office.
(v) Provision should be made to keep proper records of procurement stages so that the procurement cannot be challenged as faulty.
In next article, it is studied how the procurement is done in Government. 

Copyright © 2019 Dr. Lalit Kumar. All rights reserved.

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